On December 27, 2024, the Securities and Exchange Board of India (SEBI) officially announced the withdrawal of recognition granted to the Indian Commodity Exchange Ltd (ICEX), marking the exchange’s formal exit from the bourse business. This decision follows SEBI’s earlier action in May 2022, when ICEX was derecognized due to its failure to meet minimum net worth requirements, infrastructural deficiencies, and issues highlighted during inspections.
ICEX, based in Surat, Gujarat, was granted permanent recognition in 2009 under the Forward Contracts (Regulation) Act (FCRA). After the merger of the Forward Markets Commission with SEBI in 2015, ICEX became a recognized stock exchange under the Securities Contracts (Regulation) Act (SCRA). However, due to non-compliance, ICEX appealed to the Securities Appellate Tribunal (SAT), which temporarily allowed ICEX to retain recognition while it worked to raise funds and meet SEBI’s regulatory requirements.
Despite attempts to raise capital, ICEX encountered difficulties due to SEBI’s shareholding cap of 5% for investors in stock exchanges. In response, ICEX requested an increase in the cap to 51% for five years, but SEBI declined the request. ICEX’s shareholders subsequently passed a resolution in May 2023, approving the voluntary surrender of recognition. This set in motion SEBI’s formal exit process.
As part of the exit procedure, ICEX met several regulatory conditions, including submitting a valuation report, ensuring compliance with tax obligations under the Income Tax Act, and maintaining a database of past transactions. SEBI also required ICEX to change its name and refrain from using the term “stock exchange.” The exchange confirmed that it had no undisclosed third-party liabilities and would take responsibility for any future financial claims.
This move reflects ongoing regulatory scrutiny and consolidation within India’s commodity exchange sector.
