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  • In the European Union, the minimum purity for gold bullion, which is treated as investment gold with regards to taxation, is 99.5% for gold bullion bars and 90% for bullion coins.Highest traded Item is gold

Mcx Mcx Presentation Transcript

  • George Paul Glorin Sebastian Jithin KV Joseph Cherian Xime
  •  MCX Stock Exchange Limited (MCX-SX), India‟s new stock exchange, commenced operations in the Currency Derivatives (CD) segment on October 7, 2008 under the regulatory framework of Securities & Exchange Board of India (SEBI) and Reserve Bank of India (RBI).  The Exchange is recognised by SEBI under Section 4 of Securities Contracts (Regulation) Act, 1956.  In line with global best practices and regulatory requirements, clearing and settlement is conducted through a separate clearing corporation, MCX-SX Clearing Corporation Ltd. (MCX-SX CCL).  MCX-SX received permissions to deal in Interest Rate Derivatives, Equity, Futures & Options on Equity and Wholesale Debt Segment, vide SEBI‟s letter dated July 10, 2012.
  •  Headquartered in Mumbai  Having started operations in November 2003, today, MCX holds a market share of over 80%* (87.3% during the nine months ended December 31, 2011 and 82.4% inFY2011) of the Indian commodity futures market  Has more than 2,153 registered members operating through over 2,96,896 including computer-to-computer link (CTCL) trading terminals spread over 1,572 cities and towns across India
  •  The Exchange was the fifth largest commodity exchange, among all the commodity exchanges considered in the Futures Industry Association survey, in terms of the number of contracts traded for the six months ended June 30, 2011   MCX offers more than 40 commodities across various segments such as bullion , ferrous and non-ferrous metals, energy, and a number of agri-commodities on its platform
  •  It was the first exchange in India to offer futures trading in steel, crude oil, and almond.  MCX HAS introduced several other indices, including MCXAgri (agriculturalcommodities index), MCXEnergy (energy commodities index) and MCXMetal (metalcommodities index).  It also has three rain indices, namely RAINDEXMUM (Mumbai), RAINDEXIDR(Indore), and RAINDEXJAI (Jaipur) which track the progress of monsoon rains in their respective geographic locations .  In December 2009, it launched EFP transactions for the first time in India, which enables parties with futures positions to swap their positions in the physical markets and vice versa
  •  MCX offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities (mentha oil, cardamom, potatoes, palm oil and others)
  •  A futures contract is a standardised contract between two parties to buy or sell a specified asset of standardized quantity and quality for a price agreed upon today (the futures price or strike price) with delivery and payment occurring at a specified future date, the delivery date.  The contracts are negotiated at a futures exchange, which acts as an intermediary between the two parties
  •  Bullion refers to precious metals in bulk form which are regularly traded on commodity markets  The value of bullion is typically determined by the value of its precious metals content, which is defined by its purity and mass  The specifications of bullion are often regulated by market bodies or legislation  Gold, Gold HNI, Gold M, i-gold, Silver, Silver HNI, Silver M,, Silver Micro
  •  Aluminium, Copper, Lead, Nickel, Steel Long (Bhavnagar), Steel Long (Govindgarh), Steel Flat, Tin, Zinc
  •  ENERGY ◦ Brent Crude Oil, Crude Oil, Furnace Oil, Natural Gas, M. E. Sour Crude Oil, ATF, Electricity(Now delisted), Carbon Credit  PETROCHEMICALS ◦ HDPE, Polypropylene(PP), PVC
  •  FIBER ◦ Cotton L Staple, Cotton M Staple, Cotton S Staple, Cotton Yarn, Kapas, Jute  SPICES ◦ Cardamom, Jeera, Pepper, Red Chilli, Turmeric, Cumin Seed, Coriander  PULSES ◦ Chana, Masur, Yellow Peas, Tur, Urad  PLANTATIONS ◦ Arecanut, Cashew Kernel, Coffee (Robusta), Rubber  OIL & OIL SEEDS ◦ Castor Oil, Castor Seeds, Coconut Cake, Coconut Oil etc  CEREALS ◦ Maize, Barley, Rice, Sharbati Rice, Basmati Rice, Wheat  OTHERS ◦ Guargum, Guar Seed, Gurchaku, Mentha Oil, Potato (Agra), Potato (Tarkeshwar)
  •  Commodity Rank Silver 1 Natural Gas 2 Crude Oil 3 Gold 3
  •  Currency Futures  Currency Options  The Exchange received permissions to deal in Interest Rate Derivatives, Equity, Futures & Options on Equity and Wholesale Debt Segment, vide SEBI‟s letter dated July 10, 2012
  •  Mock Trading in equity conducted on 19th Nov 2012  commence operations in equity trading as soon as it reaches the critical mass of registering 350 members  The Exchange had received a record number of over 700 applications for new membership during its inaugural membership drive that commenced on September 5, 2012.
  •  MCX-SX currently offers a world-class electronic trading platform in currency futures contracts  MCX-SX has been a market leader in this segment, witnessing a steady and significant growth in average daily turnover and open interest ever since its inception  The average daily turnover (ADT) of MCX-SX currency futures stood at Rs 12,927.83 crore at the end of June 2012, a significant rise from an ADT of Rs 324.78 crore in the first month of operations.
  •  The latest move by MCX-SX is bound to increase the competition in the currency options segment, which is currently dominated by the National Stock Exchange (NSE).  In July „12, NSE registered a total turnover of R1.32 lakh crore in currency options.  The United Stock Exchange (USE) also offers trading in currency options but the volume is negligible.
  • ADVANTAGES OF MCX
  • • MCX has been at the forefront to spread awareness and benefits of the commodity futures market by conducting series of seminars and tie ups across India. • India‟s largest and the world‟s 8th largest commodity exchange. • With more than 80% market share the exchange provides high liquidity and its strong risk management systems assure participants of secure transactions on an online trading platform.
  •  With a strong technology-backed trading platform and infrastructure MCX is able to provide high liquidity and low impact cost of transactions  Rapid growth in operations has been supported by best practices in risk management  Strong competitive position in the market  Product portfolio geared towards commodities linked to global price movements
  •  85% of MCX‟s turnover is through metal and energy commodities  These commodities have higher volumes but they also have higher turnover which generates higher transaction fees compared to agricultural commodities.  FTIL‟s expertise in exchange technology solutions bodes well for MCX MCX‟s electronic platform is supported by its infrastructure and advanced technology, allowing faster trade execution, anonymity, price transparency, prompt and reliable order routing, trade reporting, market data dissemination and market surveillance.
  •  MCX‟s share in the overall commodities market has skyrocketed from 29% in FY04 to 82.3% as of FY10 primarily due to its focus on metals and energy commodities benchmarked to international prices.  MCX‟s sources of operating income are a) transaction fees, b) membership admission fees, c) annual subscription fees and d) terminal charges.
  •  Globally, MCX is the largest silver exchange; 2ndlargest gold, copper and natural gas exchange  3rd largest crude oil exchange in terms of the number of contracts traded in each of these commodities
  • MCX has also pioneered several innovations in the Indian commodities market:  MCX was the first national commodity futures exchange in India to offer futures trading in steel, crude oil and several other commodities, including carbon credits.  In December 2009, MCX launched the exchange of futures for physicals facility for the first time in India.  In May 2010 and June 2010, the exchange launched zinc mini futures and lead mini futures contracts, which offer trading in these metals in smaller lot sizes.  In January 2011, the exchange launched iron ore future contracts.
  •  In February 2011, it launched silver micro and aluminium mini contracts, which offer trading in these metals in smaller lot sizes.  MCX is also the first exchange in India to initiate evening sessions to synchronise with the trading hours of global exchanges in London, New York and other major international markets to meet the needs of the physical markets that operate in such time zones.
  •  The membership fees that MCX-SX is planning to offer, could trigger a price war causing the BSE and the NSE to revise their membership fee structure  The exchange‟s introductory membership fee is Rs 25 lakh of net outlay for entry-level membership (includes admission fees and deposit). This offer is valid only till October 18, following which the total outlay for the MCX-SX membership would be Rs 50 lakh.
  •  competitive membership fees come at a time when the Indian equity markets are facing tough times and exchanges are struggling to grow revenues.  BSE fees are almost at par with the MCX-SX‟s membership fee, while the NSE‟s membership fees are slightly higher  “MCX-SX has a tendency of going aggressive. Their membership fees and membership categories will help drive financial inclusion,” said Jagannadham Thunuguntla, Strategist & Head of Research, SMC Global Securities.
  •  Ahead of launching trading in multiple assets, MCX-SX has signed up 700 members across the country. The BSE and the NSE had launched operations with 318 members in 1875 and nearly 200 members in 1994, respectively.  the high membership clause was a major entry barrier to becoming a stock broker in India. Currently, NSE has 1,500 broker members, while BSE accounts for about 1,000.
  •  NSE responded by cutting its deposit and net worth criteria by up to 50 per cent for a class of brokers under the new „Alpha‟ category, compared to earlier charges of Rs 75 lakh-Rs 1.5 crore.  BSE‟s charges are much lower compared to the other exchanges.  MCX- SX offers three categories of membership —  Composite professionally qualified and rural entrepreneur.  The second category is for members who have experience in the capital markets. MBAs, lawyers, engineers, chartered accountants, doctors would also be eligible under this category
  •  The „Rural Entrepreneur Membership‟ category is for people living in sub-districts and taluks, where there is no capital market penetration.  Membership is being offered in the categories of Trading Member, Self-Clearing Member, Trading-cum- Clearing Member and Professional Clearing Member.
  •  “We have implemented an integrated India model, which will foster balanced participation from foreign institutional investors, domestic financial institutions and new members from Tier-II and Tier-III centres.  Our aim is to drive financial inclusion by optimising the cost structure of membership and innovating two unique categories for MCX-SX membership,” said Joseph Massey, MD & CEO of the MCX-SX. Mr Jignesh Shah (left), Vice- Chairman, along with Mr Joseph Massey, MD & CEO
  •  THANK YOU