MCX’s trading outage to face penalty
MCX's recent 4-hour outage due to a capacity overload has raised concerns over system resilience at India's key commodity exchange. The potential regulatory penalty from SEBI underscores the importance of robust infrastructure, timely issue identification, and prompt recovery measures in maintaining market stability.
The disruption was a result of a "capacity breach", with the exchange unable to handle the number of clients trading on that day.
As per MCX, its systems had predefined parameters that limit the number of so-called 'unique client codes (UCC)', "which led to constraints beyond the threshold." Its trading systems remain stable.
The UCC is a unique identification number assigned to every trader. In MCX’s case, the system had a fixed limit on how many UCC entries it could process. When trading volumes or client data exceeded that threshold, the system hit a technical constraint, resulting in the trading disruption.
SEBI is likely to penalise MCX for the outage as it is concerned about the delay in identifying the cause for the trading halt and could direct MCX to improve its system capacity. It requires shifting trading to a disaster recovery site when trading halts on the main exchange. However, this option did not help the MCX.
