Mumbai: The board of Multi-Commodity Exchange (MCX) has actually chosen to go through a third-party audit of its trading systems following a letter from a whistleblower to capital markets regulator Securities and Exchange Board of India (Sebi), stated 2 people with direct understanding of the matter.
” As a great governance practice, the MCX Board encouraged the management that it ought to perform a recognition (or an audit) by a 3rd party of its trading and infotech system,” stated the very first person, on the condition of privacy.
The 2nd person, who likewise didn’t wish to be called, stated this is not directed by Sebi but simply a sensible procedure.
An MCX representative decreased to comment.
The claims by the whistleblower (the exact same one who had actually flagged a comparable issue at NSE) versus product exchanges relate to the so-called “dark fiber” issue. It was initially reported by Moneylife on 14 March.
Dark fiber describes a devoted interaction line through which messages take a trip faster than routine lines because of the lack of other traffic. There is absolutely nothing prohibited about using such much faster connection facilities.
According to the whistleblower letter, the dark fiber innovation of suppliers is being used by choose brokers for faster access to MCX trading systems. The brokerages did this while accessing the distance hosting services of the exchange.
Unlike equity exchanges, in product exchanges brokers are not enabled, under Sebi standards, to place their servers in the exchange facilities. The exchanges offer distance hosting rather, the capability to place servers in close distance of the exchange.
The whistleblower, in his previous letters, had actually levelled accusations versus NSE, stating that its systems were susceptible to control which it enabled preferential access to particular brokers.
These accusations were later on confirmed by Sebi and a Sebi-commissioned forensic audit of NSE’s systems by Deloitte India.