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This decision, notified on December 24, follows SEBI’s earlier approval for ICEX’s voluntary surrender of recognition after over two years of non-compliance issues.
“The Securities and Exchange Board of India (SEBI) hereby notifies that the recognition granted to the Indian Commodity Exchange Ltd stands withdrawn with effect from the date of publication of this notification in the official gazette,” SEBI stated.
The regulator conducted a detailed review of ICEX’s valuation reports, compliance submissions, and undertakings before permitting its exit. ICEX assured SEBI that all known liabilities were declared, with no undisclosed third-party claims, and committed to taking full responsibility for any future financial obligations.
SEBI directed the exchange to fulfil its tax obligations under the Income Tax Act, 1961, refrain from using “stock exchange” in its name, and maintain a historical database of all transactions on its platform.
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ICEX, based in Surat, Gujarat, was granted permanent recognition under the Forward Contracts (Regulation) Act, 1952, in 2009. Following the merger of the Forward Markets Commission (FMC) with SEBI in 2015, it became a recognised stock exchange under the Securities Contracts (Regulation) Act, 1956.
In May 2022, SEBI derecognised ICEX due to non-compliance with the minimum net-worth requirement, infrastructural deficiencies, and inspection findings. ICEX appealed the decision to the Securities Appellate Tribunal (SAT), which temporarily allowed it to retain its recognition, provided it raised funds and met SEBI regulations within a year.
However, ICEX faced challenges in securing funding due to SEBI’s shareholding cap of 5% for investors in stock exchanges. The exchange requested SEBI to relax this cap to 51% for five years or accept its voluntary surrender. SEBI declined the request and treated ICEX’s proposal as voluntary.
In May 2023, ICEX shareholders passed a resolution approving the surrender of recognition, which led SEBI to begin the formal exit process.
(With PTI Inputs)
(Edited by : Shoma Bhattacharjee)
