The Securities and Exchange Board of India (SEBI), which oversees the capital markets, said on Friday, December 27, that the Indian Commodity Exchange Ltd. (ICEX) had its recognition revoked, officially indicating its departure from the stock exchange industry. Following the withdrawal of ICEX’s recognition more than two years ago, the regulator let the exchange leave the exchange area.
After the commodity exchange met the regulatory standards, action was taken. “The SEBI hereby notifies that the recognition granted to the Indian Commodity Exchange Ltd stands withdrawn with effect from the date of publication of this notification in the official gazette,” said SEBI in its circular.
SEBI allows ICEX to exit the exchange business
The regulator examined ICEX’s valuation report, compliance filings, and undertakings in its withdrawal order. The regulator also ordered ICEX to change its name and stop using the term “stock exchange,” comply with its tax duties under the Income Tax Act of 1961 and keep a database of all transactions on its platform from prior years.
The stock exchanges convinced SEBI that they had no unreported third-party liabilities and disclosed all known liabilities. SEBI says that the commodity exchange also assumed full liability for any potential future financial demands.
Thus, SEBI allowed “the exit of the ICEX as a stock exchange and thus the consequent withdrawal of recognition granted to ICEX” In 2009, the Forward Contracts (Regulation) Act of 1952 (FCRA) awarded permanent status to ICEX, a commodity exchange situated in Surat, Gujarat.
According to the Securities Contracts (Regulation) Act, 1956 (SCRA), ICEX became a recognized stock exchange in 2015 after the Forward Markets Commission (FMC) merged with SEBI. SEBI delisted ICEX in May 2022 as a result of inspection results, infrastructure flaws, and noncompliance with the minimum net worth criteria.
After filing an appeal with the Securities Appellate Tribunal (SAT), ICEX was granted temporary recognition as long as it raised money and met wiBI rules within a year. Due to SEBI’s five per cent equity cap for stock exchange investors, ICEX looked at several ways to raise money but was unsuccessful.
It asked the regulator to allow investors to own up to 51% of the company for five years. ICEX proposed to willingly give up its recognition if it was rejected. Treating ICEX’s letter as a voluntary surrender, SEBI denied ICEX’s request to loosen shareholding regulations. In May 2023, ICEX shareholders approved the surrender of recognition by a resolution, and SEBI thereafter started the departure procedure.
