New Delhi: 63 moons technologies, a global leader in providing next-generation technology, user-friendly financial platforms and solutions, and digital markets, on Monday said the company would not provide its exchange technology support and services to Multi Commodity Exchange (MCX) beyond this Friday.
In its filing, 63 moons urged the stock exchange to bring to the attention of stakeholders of the company that the term of the Software Support and Maintenance Agreement between 63 moons and MCX, as amended on September 27, 2014, would end on September 30, 2022. "Consequently, MCX would cease to be a client of the 63 moons for the Exchange Technology Maintenance Agreement," clarified the Mumbai-based tech firm.
As the agreement between the two is not renewed, 63 moons stated, MCX's right to use the Exchange Technology software (with no access to the source code to rectify issues or bugs that may arise) shall be subject to any regulatory restriction the regulator may impose on MCX. MCX shall not be entitled to receive any support on the Exchange Technology software after September 30, 2022, if the trading or settlement system halts for any reason, it said, adding, "No workaround by any person is possible in issues arising in exchange platform as no access to source code is available to MCX."
About a circular by MCX on September 22, 2022, 63 moons pointed out that MCX initiated discussions with it for acquiring the IP license of Exchange Technology for self-use even before the expiry of the service agreement and also held discussions for a new service agreement after the expiry of existing technology service agreement.
63 moons responded to their requests with clear commercial proposals, which after discussions ended with no final response of acceptance or rejection from MCX to date.
Notably, MCX floated a public Request for Proposal (RFP) which opened on October 17, 2020, and closed on December 6, 2020. The discussion with 63 moons for a new agreement started on October 21, 2020, and the last communication from MCX seeking inputs/clarification for negotiation was received on January 6, 2021, which was responded to on January 11, 2021.
As 63 moons was already in discussion with MCX on a new service agreement, as per the filing, it will be imprudent to quote again by way of RFP response as both are for the same set of technology platforms. The commercials and the technology features are already known to MCX and hence there is nothing new to quote in RFP.
However, 63 moons wrote to the Board of MCX on December 9, 2020, with a request to take an informed decision given the fact that 63 moons technology has been giving them the best performance since its inception in 2003 and are willing to enter a new agreement or give IP rights for existing usage.
Some media reports noted MCX's decision of finalising the vendor on February 4, 2021, even when the discussion with 63 moons was not closed. Even after receipt of bids in the RFP, MCX had the option to exit from the process, if it had continued the negotiations and finalized with 63 moons.
Hence, it is an incorrect statement and misrepresentation that 63 moons did not participate in RFP as discussion on the commercials was going on and nothing new was there to quote in RFP.
Further, it is also a misrepresentation in the said circular that "...the Exchange is also taking the services of subject matter experts for providing workaround solutions in the event of any technical incident." It is a clear misrepresentation as no workaround is possible without access to the source code. "With no access to source code, MCX cannot provide any workaround in the Technology platform provided by us and if they attempt, it will be a clear criminal infringement of IP rights," said 63 moons.
Last month on August 1, according to 63 moons, MCX again approached 63 moons for support services after September 30 as the new system was not fully developed and deployed, for which a proposal was requested by MCX. The commercial proposal was duly submitted by 63 moons to the Board of MCX. The validity of the last proposal has already expired as of the date and 63 moons did not hear anything from MCX on the renewal of the service agreement.
63 moons said it is a commercial arrangement between the two organisations which MCX has decided not to take any further.
Meanwhile, according to sources, MCX is seeking to take support from the National Stock Exchange to run its trading technology and clearing and settlement in case of any emergency. Nearly two years back, MCX issued a contract to TCS to provide the trading technology but failed to get desired results from TCS to date.