SEBI orderes forensic audit of Indian Commodity Exchange

KOLKATA/MUMBAI: Market regulator SEBI has ordered a forensic audit of Indian Commodity Exchange (ICEX), based on a complaint of alleged misuse of its Liquidity Enhancement Scheme (LES), a person aware of the development told ET .

The ICEX board has been directed to appoint an auditor for conducting the forensic audit . It is expected to meet shortly to take a decision on the same and finalise the terms of reference .

SEBI and ICEX officials were not immediately available for comment .


LES is a tool, approved by Sebi, subject to certain conditions , for providing liquidity in contracts which haven’t gained traction . In the early years of a new contract launch , brokers can be incentivised to give two- way quotes . The exchange can set aside as much as 25% of its audited net worth on the last day of the previous fiscal year as an incentive for LES.

ICEX offers derivatives contracts in diamond and steel , spices and plantation products like rubber.

Its key shareholders include Bajaj Holdings & Investment Ltd , Central Warehousing Corporation , Gujarat Agro Industries Corporation and IDFC First Bank, to name a few .

Among exchanges offering only a commodity derivatives segment (CDS) , it ranks third after MCX and NCDEX . Its market share of CDS in February was around 0.5% against MCX ‘s 96% share and NCDEX’s 3.2% .