SEBI Decides Not To Entertain Anonymous Whistleblower Allegations Against MCX Without Supporting Evidence

The Securities & Exchange Board of India (SEBI) has stated that it has decided against entertaining anonymous whistleblower allegations made against Multi Commodity Exchange of India Ltd (MCX) recently, without any supporting evidence.

It was alleged a few months ago that the commodities exchange tries to siphon off money by marking-up contracts to develop software, as well as allegedly favors a few traders by pushing delivery of sub-standard cotton stocks.

It was alleged that MCX has been struggling to handle gold delivery due to insufficient insurance cover. It was also alleged that 90% of MCX’s business comes from top 15 brokers who drive turnover through algorithm trading.

However, all these allegations were made without any supporting evidence or disclosing the whistleblower’s real identity; though as per the Whistle Blower Protection Act, a whistleblower must make a complaint, indicate his identity as well as furnish supporting documents substantiate his allegations.

The SEBI has stated that it has not been possible to reach the whistleblower and that it can entertain complaints only if backed by supporting documents.