The MCX Clearing Corporation Ltd or MCX CCL, is the wholly owned subsidiary of the Multi Commodity Exchange of India Ltd or MCX. MCX India recently declared to the Bombay Stock Exchange or BSE that its wholly owned subsidiary MCX- CCL has received an approval from the market regulator, SEBI to act as a clearing corporation.
It was in the last year in the month of October that Multi Commodity Exchange of India Ltd, MCX, had asked the market regulator seeking an approval to allow them to transfer the functions of clearing and settlement of trades to their separate wing of clearing corporation. Finally, the MCX declared in a regulatory filing that their subsidiary MCX CCL has received in-principle approval to act as a clearing corporation for a time span of 1 year, the legal news India points out.
MCX operates as a commodity futures exchange. The Multi Commodity Exchange of India Ltd (MCX) is a holding company which is involved in the functions of the facilitating trading, and clearing and settlement of commodity derivatives.
Now that, the capital and commodity market regulator SEBI has allowed options trading on the commodity exchanges, it has increased in the trade volumes exponentially. In the earlier scenario, only the futures contract trading was allowed and not the options trading.
The exact figures of the increase in the stocks are as follows – The stock increased by the percentage of 1.84% or by Rs. 20.35 to Rs. 1,124.80 a piece on the BSE recently. Also, the stock had hit an intraday high of Rs. 1,133 and an intraday low of Rs. 1,094, but pared gains before closing. The stock also attracted a traded volume of 3,53,124 shares and traded value of Rs 3,938.75 lakh on the National Stock Exchange.
MCX Clearing Corporation wishes to attain a net worth of 300 crore by Sep’2019. Following the merger of erstwhile regulator FMC or Forward Markets Commission with SEBI in the year 2015, the three commodity exchanges namely MCX, NCDEX and NMCE were given the time period of three years to de-mutualize and set up a separate clearing house to de-risk their operations. Until now, there were separate department in these exchanges where the clearing operations were performed. The investment in setting up MCX as clearing corporation will not cost much as they already have the technology and the needed infrastructure. The only thing MCX has to do now is to build assets under their new MCX – CCL to attain a net worth of Rs. 300 Cr. Also, it will have to form a board of directors and hire a managing director to lead the business separately.
The clearing house MCX CCL will be involved in the functions of monitoring and performing the activities concerning the delivery, funds settlement, trade margin and managing the settlement guarantee fund. It will also collect margin from the members, effect pay in and pay out and monitor the delivery and settlement process.
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