Is MCX misleading the public about its new platform?

Are the current negotiations with NSE a ruse to do a reverse merger of NSE into a publicly traded MCX?

Are the current negotiations with NSE a ruse to do a reverse merger of NSE into a publicly traded MCX?
Are the current negotiations with NSE a ruse to do a reverse merger of NSE into a publicly traded MCX?

Why give time series data of transactions to the same entity?

What has been playing out at the Multi Commodities Exchange (MCX) for the past few years is nothing short of diabolical. MCX, along the lines of its competitor in the commodities space, the National Stock Exchange (NSE) has been giving time series data of its transactions to the same entity (yes, comprising of the extended family of Ajay Shah, Susan Thomas, Sunitha Thomas et. al., some of whom are fugitives now). This is the equivalent of giving a student the question paper a day ahead of the examination. To understand the underlying currents, we need to take a trip down memory lane.

NSE and C-Company – How P Chidambaram milked the Stock Market

I have written a lot of articles on how the then finance minister, P Chidambaram, got a few of his Babus together to milk the retail investors using the NSE[1]. This went on for several years until a whistle-blower wrote to the Securities and Exchange Board of India (SEBI) and others about how a few were gaming the system at the exchange. You have all read how the people who ran NSE, such as Ravi Narain and Chitra Ramkrishna have been in and out of jail, while the real sutradhars still roam free[2]. Whatever the NSE has been found guilty of in the sharing of time-series data with a private company, applies to MCX too. In other words, the schemers were trying to do an NSE on MCX also!

MCX – A story of mismanagement

Right from the time this company was wrested from Jignesh Shah, MCX has lost its way. All one hears about MCX is that there are many board meetings with members collecting their attendance fees – for doing what? Let us come to the current situation…

When MCX was wrested from Jignesh Shah’s group (then FTIL, now 63 moons), the underlying software that ran the exchange continued to use FTIL’s technology[3]. Using practically the same technology, the business has now risen to Rs.60-70,000 crore every trading day. Imagine my surprise when I got an email from CFMA (Chennai Financial Markets & Accountability) with two attachments, one addressed to MCX and the other to MCXCCL, for those who do not know, is the clearing corporation for MCX. Every exchange has a corresponding clearing corporation to handle its risk management and settlements.

Reading the two attachments, I drafted the below email and sent it to the concerned authorities in MCX and SEBI, asking if this was true (see the email below). At the time of writing, no one answered any of these questions. Here is the letter:

Cfma 014 Dt. 19.11.22 to MCX Board by PGurus on Scribd

Cfma 016 Dt. 23.11.22 to MCXCCL Board by PGurus on Scribd

We at PGurus have received an email from CFMA (Chennai Financial Markets & Accountability) with two attachments, one addressed to MCX and the other to MCXCCL. Some grave concerns have been expressed in these attachments on the proposed plan of MCX to change its technology over to a new vendor. We have a few questions to ask, based on the information in the attachments as well as in the public domain.

  1. What was the need for changing to a new technology platform? Was there any shortfall in the current one?
  2. Was approval obtained from the SEBI to do the same, since this affects each and every customer?
  3. How were the new technology vendor (TCS) chosen? Did they have a proven product in the market?
  4. Was there a Request for Participation (RFP) that was sent to the prospective vendors, including the current vendor?
  5. According to market data, about Rs.60,000 to 70,000 crore gets traded every trading day on MCX. This mandates that any transition be done gradually and carefully. What steps have been taken to ensure that the transition is smooth? A period of four to six months is typical for both systems to operate in parallel before switching over to the new system. Has this been done?
  6. Who is identified as the responsible person for any financial issues in transition?
  7. What is the arrangement with NSE done and are the MCX shareholders aware of it?

We hope to hear from you as early as possible. The attachment we received from CFMA is also sent herewith.

NSE desperately wants to go public

I have been writing for a while that the NSE wants to desperately go public, and it has been prevented from doing so, due to all the overhanging scandals. As one reads the letters CFMA sent to MCX and MCXCCL, one gets the distinct impression that MCX is being coaxed/ manipulated into using NSE technology at the back end, thereby making it easy for NSE to trade publicly under the MCX symbol in a few months. Reverse merger! Before the usual bayers start screaming that I am dreaming up controversies, look at what has played out thus far:

  1. What was the need to switch the software when it was perfectly handling transactions worth Rs.60,000-70,000 crore per trading day?
  2. When the RFP was sent out, why were bilateral talks going on with the current vendor (63 moons)?
  3. On what basis was the new vendor TCS (Tata Consulting Services) selected[4]? Did they have a proven product in the market?
  4. Changing underlying software in a commodity exchange is like changing the foundation of a multi-storied building; it must be done extremely carefully. For instance, Deutsche Boerse’s T7 trading technology went live for Xetra trading on the Frankfurt Stock Exchange in July 2017, after a rigorous simulation of more than 4 months. Similarly, when the oldest exchange of India (BSE) replaced its existing technology with Deutsche Boerse’s T7 trading technology, it did so in a phased manner and conducted parallel tests over a period of more than 6 months[5]. A quick look at the site shows how carefully software upgrades for Deutsche Boerse’s T7 trading platform are eased in.
  5. The new platform is clearly getting delayed as there has been a constantly moving goalpost of going live. There is no finite plan out from the exchange for its changeover date and market participants are in anxiety with respect to MCX’s plan to go live. Is MCX taking the entire ecosystem for granted by not clearly communicating its plan?
  6. Exchange is a public utility service provider and must be careful with technology platforms as any (mis)adventure there, can lead to severe financial mishaps and chaos for several thousand customers. One fails to understand the rush and compulsion for a change in technology. Is the regulator being kept in the dark?

Six questions – that’s all I want them to answer. I am attaching the two letters I received from CFMA along with this post. In the next part, I will discuss the NSE angle in detail with a potential scope of insider trading.



[1] C-Company2018-now,

[2] Chitra Ramkrishna –

[3] MCX: Out of the Jignesh Shah shadow – Sep 2, 2015, Forbes India

[4] TCS wins MCX deal to transform its core systems for undisclosed sumOct 1, 2021, Business Standard

[5] T7 trading architecture – XETRA

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An inventor and out-of-the-box thinker, Sree Iyer has 37 patents in the areas of Hardware, Software, Encryption and Systems.

His first book NDTV Frauds has been published and is an Amazon Bestseller.It ranked second among all eBooks that were self-published in 2017.

His second book, The Gist of GSTN which too is available on Amazon as an e-Book and as a paperback.

His third book, The Rise and Fall of AAP is also available in print version or as an e-Book on Amazon.

His fourth book, C-Company just released to rave reviews and can be bought as a print version or as an e-Book on Amazon.
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