In an order dated October 26, the appellate tribunal declared the September 28 penalty legally unsustainable because an external expert signed it months after his tenure had officially ended. Consequently, the commodity exchange must immediately refund or reverse the debited funds and provide an additional ₹1 lakh in costs to the brokerage. The underlying dispute originated from an alleged breach where a client's open position in natural gas options reached 27% against a 2% limit, which occurred without any alert being generated by the exchange.
Key points
The Multi Commodity Exchange must immediately refund or reverse the ₹1.49 crore previousl…: The Multi Commodity Exchange must immediately refund or reverse the ₹1.49 crore previously debited from Ventura Securities.
Regulatory enforcement actions become legally unsustainable if finalized by individuals w…: Regulatory enforcement actions become legally unsustainable if finalized by individuals who no longer hold valid committee appointments.
The brokerage contested the sanction on grounds that the exchange failed to provide an al…: The brokerage contested the sanction on grounds that the exchange failed to provide an alert regarding the position limit breach.
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In an order dated October 26, SAT held that MCX's September 28 order was legally unsustainable because S.V. Krishnamohan had ceased to be an independent external expert on the exchange's committee on March 20, 2026, much before signing the penalty order. The tribunal directed MCX to refund or reverse the amount debited from Ventura's account forthwith and pay the brokerage ₹1 lakh in costs.
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Ventura had challenged the penalty imposed for an alleged breach of client-level open position limits in natural gas options. It argued that its client's position had reached 27% against a cited threshold of 2% and that MCX had not issued an alert regarding the breach.
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