Introduction and Background

a) ICEX is a recognized Commodity Exchange regulated by the Securities and Exchange Board of India (SEBI). b) It resumed trading operations on August 28, 2017, with the launch of Diamond Derivatives contracts, a first of its kind globally.

Product Offerings and Innovations

a) Subsequently launched SteelLong contracts on August 28, 2018. b) Introduced Paddy Basmati derivative contracts on July 11, 2019. c) Launched ICEX MF transactions, a mutual fund platform, on December 27, 2019.

Regulatory Compliance and Partnerships

a) Outsourced services related to clearing, settlement, and risk management to Metropolitan Clearing Corporation of India Limited (MCCIL) as per SEBI requirements.

Impact of Covid-19 Pandemic

a) The pandemic-induced lockdown led to the closure of the underlying physical market, adversely impacting price discovery and liquidity. b) The volume and revenue of ICEX were severely impacted due to its focus on delivery-based contracts.

Financial and Regulatory Issues

a) Failed to maintain minimum Net worth and other infrastructural compliances as per SEBI regulations. b) The board decided to temporarily suspend trading operations and mutual fund transactions as of April 1, 2022, and April 14, 2022, respectively.

Regulatory Actions and Appeals

a) SEBI withdrew its permanent recognition of ICEX effective from May 18, 2022. b) ICEX filed an appeal and was granted a one-year period for revival by the Securities Appellate Tribunal (SAT).

Requests to SEBI and Board Decisions

a) ICEX requested SEBI to allow new investors up to a 51% stake, which was declined by SEBI. b) The board approved the voluntary surrender of recognition on February 14, 2023, but decided to request SEBI once more for investor participation.

Final Outcomes

a) SEBI declined the second request but agreed to consider the voluntary surrender upon submission of shareholder approval. b) An Extraordinary General Meeting (EOGM) was held on May 24, 2023, where the voluntary surrender of recognition was approved and submitted to SEBI. This summary encapsulates the significant developments and challenges faced by ICEX, as well as its regulatory interactions.

Future of ICEX Business

On exit from Commodity business and compliance of SEBI guidelines, the Management will consider taking up other businesses most appropriate with the limited funds available with the Exchange.