New Delhi, April 25: A broker member of MCX, country’s largest exchange for commodity derivatives, moved the Delhi high court against the manner in which the April crude oil contract was settled by the bourse.
Prrsaar Commodities (P) Ltd moved the court in the interest of its investors against MCX challenging the negative Settlement price for crude oil for the Trades expired on April 20, The Hindustan Times reported.
MCX, which initially announced a provisional settlement price of Re 1 for its contract that ended on April 20, later calculated a price of minus Rs 2,884 per barrel, exposing brokers to a potential loss of Rs 435 crore.
Mukesh Goyal, Advocate counsel for Prrsaar Commodities, has informed that a petition in the matter is likely to be listed on April 29.
Goyal has further said that settlement of trades in negative trajectory is unjust enrichment of one segment at the cost of another.
Crude oil contracts on MCX reflect prices on the New York Mercantile Exchange (Nymex) and since Indian commodity markets closed for trading at 5pm on Monday, local traders were unable to exit their positions, while US prices plunged to minus $37.63 later in the night.
He also said that MCX is unjustified in fixing the settlement price at a rate after the close of trading session.
Even the Software of MCX itself does permit negative bidding, he added.
The lawyer further said that SEBI, the market regulator, failed to intervene.