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MCX India losing lustre on concerns of gap in tech transition from 63 Moons to TCS

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MCX India losing lustre on concerns of gap in tech transition from 63 Moons to TCS

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The UBS report also suggested that the transition will also cut off the kind of software support price that MCX faces. So, it would be positive for their balance sheet. UBS has continued its 'buy' rating for the MCX stock with a Rs 1,900 target price.


Multi Commodity Exchange of India (MCX) stock has dipped 5 percent on a week-on-week basis and 10 percent on a month-on-month basis.
There are concerns among traders and investors about the 63 Moons Technologies platform service contract expiry. 63 Moons said on September 26 that the firm would not provide its exchange technology support and services to MCX beyond Friday, September 30.
As per a 63 Moons statement, MCX can not use the software and will have no access to the source code to rectify potential bugs. "...If the trading or settlement system halts for any reason, no workaround is possible by any third person... as no access to source code is available to MCX," the statement said.
According to a recent UBS report, the source code for the existing products has stabilised over the years and will not require a change, so the content platform will just about continue.
MCX expects the same. The commodity bourse is transitioning to a new trading platform from Tata Consultancy Services (TCS) as the new fee demand from 63 Moons could not be met. But this transition is likely to take three-four months, and till then, MCX has its fingers crossed for glitch-free trading.
UBS said that a change in the current code is required only when the situation is very different. The need for source code arises if a commodity falls into the negative territory.
The last couple of times, the code change has happened only once during the implementation of peak margin regulations. That was in 2021. And before that, it was when the crude oil prices had hit a negative that was in 2020.
UBS also said that MCX had notified all of its stakeholders and regulator about this transition. According to MCX, there have been some technical glitches, which are being worked on. Apart from that, some historic and real-time testing will be carried out.
The UBS report also suggested that the transition will also cut off the kind of software support price that MCX faces. So, it would be positive for their balance sheet. UBS has continued its 'buy' rating for the MCX stock with a Rs 1,900 target price.
On Thursday, September 29, the stock was trading at Rs 1,189.30, up over 2 percent from the previous close at BSE around 3.30 pm.
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