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The Securities Appellate Tribunal (SAT) has revoked an order issued by market regulator SEBI which derecognized ICEX as an exchange.
We at Jobaaj had reported about the order passed by SEBI on 10th May 2022, which announced the cessation of ICEX as a recognized exchange in India.
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ICEX has always had issues maintaining its net worth above the required amount. The exchange had shut down in 2014 but restarted operations in 2017 after it merged with another exchange.
All exchanges are required to maintain a net worth of Rs 100 crores at all times, but that of ICEX had fallen to Rs 86.45 crores in January 2022. Moreover, several executives, including the MD & CEO, from the company had resigned and the exchange had announced that it did not have the funds or manpower to meet the relevant requirements.
However, the exchange had assured the regulator that it would raise funds and restart trading in one year but did not submit an action plan. The regulator felt it was unlikely that the exchange would be able to restart operations in a year, so SEBI withdrew the recognition from ICEX.
The SAT, which hears appeals against SEBI, has revoked SEBI's order stating that the regulator did not give the exchange a chance to revive itself. Moreover, the SAT also said that since the exchange was never accused of dealing in illegal actions and defrauding its customers, it was giving the exchange a year's time to bring in the requisite funds and meet SEBI's requirements.
However, the exchange has been asked to keep its trading operations closed until net worth requirements are met, but also added that if capital is gathered before the deadline, the exchange is free to apply with SEBI to resume its trading operations.
Article by Aman Agarwal.
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