MCX in talks with 63 Moons to renew service contract
In a bid to dispel the cloud of uncertainty, the country’s largest commodity exchange, MCX, has entered into talks with 63 Moons to extend the technical support contract for the clearing and settlement software for six months from October, with the current contract ending this month.
The exchange has solicited a proposal from 63 Moons, founded by Jignesh Shah, for an extension of the existing help desk and is awaiting a response from the company. The sources said that after negotiation with the company, the proposal will be submitted to the board of directors for final approval.
While the exchange can handle day-to-day business with the in-house team, the role of a service provider only comes into play if market regulator SEBI makes regulatory changes and new features need to be introduced, it said. he adds.
In the absence of continuity of services by 63 moons, the existing system will be operated by an internal IT team and, if necessary, the team will be supplemented with the required expertise, MCX said in its annual report published on Saturday. .
MCX is licensed to use the software beyond the expiration of the Support and Managed Services Agreement, and there are no code changes and no enhancements contemplated under this option. he added.
On the other hand, if the extension proposal proves to be commercially viable, the service contract with 63 Moons will be extended for another six months, the exchange said.
The existing trading, clearing and settlement platform was developed and supported by 63 Moons. Since the software license with 63 Moons was expiring on September 30, MCX issued a tender (request for proposals) for October 2020 for the development of the Commodity Derivatives Platform (CDP) of the Exchange.
It should be noted that, according to the existing agreements signed between MCX and 63 Moons, a supplier for the development of CDP could not be engaged until two years after the expiration of the contract.
In response to the tender, 63 Moons elected not to submit any bids and MCX selected Tata Consultancy Services as the vendor for the development of the CDP and issued a letter of intent in February 2021. Although the CDP was expected to to go live by July 2022, the timelines for the project have since been revised to go live after September due to the complexity of developing and integrating the platform, the exchange said.
“We are working to manage the situation and have also kept Sebi informed of developments related to the migration to the new technology platform,” he said.
However, in the event that none of the options are found to be viable, the exchange’s trading risk quotient could increase until the new platform is fully implemented, he added.
September 04, 2022