On Tuesday, the Securities and Exchange Board of India (SEBI) officially approved the exit of the Indian Commodity Exchange (ICEX) as a recognized stock exchange. ICEX, based in Surat, Gujarat, was originally granted recognition under the Forward Contracts (Regulation) Act, 1952, and later transitioned to the Securities Contracts (Regulation) Act, of 1956, following the merger of the Forward Markets Commission (FMC) with SEBI.
However, ICEX faced challenges in meeting net worth requirements and other regulatory conditions, leading SEBI to withdraw its recognition in May 2022. Despite an appeal and an order from the Securities Appellate Tribunal (SAT) allowing ICEX to continue operations with certain conditions, including raising funds and meeting SEBI’s compliance requirements, the exchange was unable to meet these conditions. Consequently, ICEX’s management opted for a voluntary surrender of its recognition.
In May 2023, a resolution passed by ICEX’s shareholders formally initiated the exit process. As per SEBI’s guidelines, ICEX complied with several mandatory requirements, including transferring its Investor Protection Fund to SEBI’s Investor Protection and Education Fund and addressing any outstanding dues. The exchange also contributed to the SEBI fund for future liabilities and committed to resolving pending investor complaints and arbitration cases.
In July 2024, an independent asset valuation was completed, confirming that all known liabilities had been addressed. ICEX has since settled its statutory dues and ensured no future liabilities remain undisclosed. As part of the exit process, ICEX was required to change its name, and if it continues to operate as a corporate entity, it must refrain from using the term ‘exchange’ or any variant in its name to avoid any association with its past recognition as a stock exchange.
With all conditions now satisfied, SEBI has granted ICEX its final exit from the commodities derivatives market. The decision will take effect upon publication in the official gazette, officially marking ICEX’s exit from the space.
