Compliance

Opening Client Account

Additional Client Registration Documents for allowing existing Clients in Commodity Options Trading

Yes, it is advisable to take specific consent from clients because it is “Options on Commodity Futures”.

Please note the below.

  • It is “Options on Commodity Futures” that has been permitted by SEBI vide Circular dated 13th June 2017 wherein the underlying of an Option contract will be the “Commodity Futures” traded on the Exchange as may be permitted by SEBI;
  • Commodity Futures (wherever such word is used) is not the same as “Options on Commodity Futures”; - Under the Securities Contracts (Regulation) Act (SCRA), “Derivative” includes “Commodity Derivatives” - Commodity Derivatives includes Commodity Futures, but it does not include “Options on Commodity Futures”.

Options in Securities is a contract defined under the SCRA. Please note the below.

  • Under SCRA, “Commodity Futures” is one of the “securities”.
  • “Options on Commodity Futures” is falling under “option in securities”.

Note: For all such registered clients of a Member who are interested in trading in OPTIONS, the Member shall stand guided by the above. In case of fresh client registrations (for OPTIONS), the Member should suitably make changes in the KYC / Registration documents to include the instrument – Options.

Yes, the Member may receive the consent through registered email ID of the respective client, by way of scanned copy of the duly signed letter / undertaking by client attached in such email.

However, the original copy of letter / undertaking has to be obtained by Member from all such clients, within 7 working days from the receipt of email.

Yes, the client consent / undertaking can be taken using a two-factor authentication (2FA) solution authorised by Member for all registered clients with a username & password.

Yes, they are required to preserve the consent of client and the evidences of such consent.

Yes, the members who have a website are required to publish additional Risk Disclosure Document related to options trading on their website. This is besides the requirement of Member specifically communicating and making clients aware of the same, in electronic or physical mode, as per the preference of the client.

Contract Notes and Brokerage

Please refer Circular No. MCX/INSP/082/2016 dated March 23, 2016 and MCX/INSP/325/2016  dated September 29, 2016 

The contract notes should be issued as per the format prescribed in the Circular No. MCX/INSP/082/2016 dated March 23, 2016 and the same format is also made available in Circular No. MCX/INSP/325/2016  dated September 29, 2016 (Part B -Annexure 5).

Contract notes are required to be issued to the clients within 24 hours of the commodity derivatives transactions made by the client.  You may please refer no. MCX/INSP/325/2016  dated September 29, 2016.

Contract note are required to be serially numbered beginning from one, which shall be reset only at the beginning of the next financial year. You may please refer Circular No. MCX/INSP/325/2016  dated September 29, 2016

Yes. The digitally signed ECNs may be sent only to those clients who have opted to receive the contract notes in an electronic form, either in the client registration document or by a separate letter/ format specified by the exchange in MCX/INSP/325/2016  dated September 29, 2016 (Part B - Appendix A of Annexure 3 ).

Yes,Member shall send physical contract note within stipulated time in case of bounced back of ECN mail further you may please refer Circular No. MCX/INSP/325/2016  dated September 29, 2016.

Yes, the specified format for contract note requires brokerage amount to be shown separately. You may please refer to Circular no. MCX/INSP/082/2016 dated March 23, 2016 and  MCX/INSP/325/2016 dated September 29, 2016.

The maximum brokerage rate shall be 1 % in case of non-delivery transactions and 2 % (plus expenses) in case of transactions resulting in to delivery. You may please refer to the Circular No. MCX/INSP/325/2016 dated September 29, 2016.

You may please refer the following Circular no.MCX/INSP/325/2016 dated September 29, 2016

You may refer circular MCX/INSP/325/2016 dated September 29, 2016

Member shall pay applicable Commodity Transaction Tax (CTT) /Stamp Duty/ Service Tax/ Sales Tax/Value Added Tax (VAT) and other applicable statutory dues to respective authorities within the timelines prescribed by the Exchange and / or any relevant authority from time to time. 

Books of Accounts

Following are the references regarding maintenance of books of accounts:

Please refer circular no. MCX/INSP/325/2016 dated September 29,2016

Please refer Exchange circular no.MCX/INSP/264/2016 dated September 02, 2016, ,MCX/INSP/325/2016      dated September 29,2016,Exchange circular MCX/INSP/295/2016 dated September 26 and SEBI Circular

 SEBI / HO/ CDMRD /DMP/CIR/P/2016/74 dated August 30, 2016 

Annual Compliance Report

Members are required to submit Annual Compliance Report in soft form through MCX eXchange as well as in hard form to the Exchange. The link for submission in soft form and format for submission of hard form is available at our website www.mcxindia.com under the link Membership> Inspection and Compliance> Annual Compliance Report.

 Please refer MCX Circular no. MCX/INSP/143/2017 dated May 10, 2017.

ACR for a financial year is to be submitted by June 30 of the next financial year

Designated Director, Managing Director, Managing Partner, Proprietor, Karta, Authorized Signatory and Compliance Officer can sign the Annual Compliance Report (ACR) 

  • If the member has complied to the requirement, the compliance status is to be mentioned as “Yes”.
  • If the member has not complied / partially complied to the requirement, the compliance status is to be mentioned as “No”.
    (reason for the same can be provided in the remarks)
  • If the said point is not applicable to the member, the compliance status is to be mentioned as “N.A”.
    (reason for the same is to be provided in the remarks as the same is a mandatory requirement).

Members may note that for the non-compliances reported in ACR, a penalty of Rs.1,000/- will be levied under each head for one or more non-compliances reported. Further, the Exchange may also take appropriate disciplinary action including levy of higher penalty, embargo, etc. if ACR is not submitted or incorrect reporting is made therein.

Further, Members may also note that for any incorrect reporting in the ACR a penalty of Rs.2,500/- per instance will be levied.

Yes, In case of non-submission or delayed submission, a penalty of Rs.100/- per day shall be levied from July 01, 2017 till the date of submission. 

Anti Money Laundering

You may please refer to the Exchange circular MCX/INSP/295/2016 dated September 26, 2016 ,  MCX/INSP/325/2016 dated September 29, 2016 and SEBI Circular No.CIR /ISD/AML/3/2010 dated Dec 31, 2010, CIR/MIRSD/2/2013 dated Jan 24, 2013 , CIR/MIRSD/1/2014 dated Mar 12, 2014 and SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/92 September 23, 2016.  
Members/intermediaries are required to designate a senior management officer located at head/corporate office as Principal Officer. The name, designation and addresses of the Principal Officer are required to be intimated to the office of the Director - Financial Intelligence Unit (FIU) - India. You may please refer Circular No. MCX/COMP/302/2013 dated September 5, 2013 and Circular No. MCX/COMP/488/2009 dated November 27, 2009, for details.

In terms of the PML Rules, intermediaries are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND)

 You may please refer SEBI Circular no. CIR /ISD/AML/3/2010 dated Dec 31, 2010 and Exchange Circular No. MCX/INSP/295/2016 dated September 26, 2016,MCX/INSP/325/2016 dated September 29, 2016

In terms of the PML Rules, intermediaries are required to report information relating to cash and suspicious transactions to the Director, Financial Intelligence Unit-India (FIU-IND)

 You may please refer SEBI Circular no. CIR /ISD/AML/3/2010 dated Dec 31, 2010 and Exchange Circular No. MCX/INSP/295/2016 dated September 26, 2016 , MCX/INSP/325/2016 dated September 29, 2016

Yes, Suspicious transaction Reports are required to be reported to FIU-IND Please refer SEBI Circular no. CIR /ISD/AML/3/2010 dated Dec 31, 2010 and Exchange Circular No. MCX/INSP/295/2016 dated September 26, 2016 and MCX/INSP/325/2016 dated September 29, 2016

  • Customer acceptance
  • Customer identification
  • Monitoring of Transactions
  • Tracking and Reporting suspicious transactions

SEBI Circular no. CIR /ISD/AML/3/2010 dated Dec 31, 2010 and Exchange Circular No. MCX/INSP/295/2016 dated September 26, 2016 , MCX/INSP/325/2016 dated September 29, 2016

All cash transaction of the value of RS.10 lakhs or its equivalent in foreign currency or all series of transactions integrally connected to each other which have been valued below Rs. 10 lakhs or its equivalent in foreign currency, where such series of transactions have place within a month.
You may please refer to the Circular No. MCX/COMP/102/2014 dated March 26, 2014, MCX/MEM/293/2014 dated September 16, 2014

It is advisable that the ‘Principal Officer’ is of a sufficiently senior position and is able to discharge the functions with independence and authority.

 Names, designation and addresses (including email addresses) of ‘Principal Officer’ including any changes therein shall also be intimated to the Office of the Director- Financial Intelligence Unit (FIU) - India. You may please refer SEBI Circular no. SEBI Circular no. CIR /ISD/AML/3/2010 dated Dec 31, 2010  and Exchange Circular No.MCX/MEM/324/2016 dated September 29, 2016, MCX/INSP/295/2016 dated September 26, 2016 and MCX/INSP/325/2016 dated September 29, 2016

You may please refer to the SEBI Circular no. SEBI Circular no. CIR /ISD/AML/3/2010 dated Dec 31, 2010,  MCX/INSP/295/2016 dated September 26, 2016 and MCX/INSP/325/2016 dated September 29, 2016

You may please refer to the SEBI Circular no. CIR/MIRSD/1/2014 dated March 12, 2014 and MCX /INSP/ 325/2016 dated September 29, 2016

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Yes, you may refer MCX Circular No. MCX/INSP/295/2016 dated September 26, 2016, MCX Circular no. MCX/INSP/325/2016 dated September 29, 2016, MCX/MEM/324/2016 dated September 29, 2016,  SEBI Circular no. SEBI/HO/MIRSD/ MIRSD2/ CIR /P /2016 /92 dated September 23, 2016, SEBI Circular no. Cir/MIRSD/ 9 /2010 dated Nov 4, 2010 and SEBI Circular no. CIR/MIRSD/3/2014 dated Aug 28, 2014 

Office Management

Yes, you may refer MCX Circular No. MCX/INSP/295/2016 dated September 26, 2016, MCX Circular no. MCX/INSP/325/2016 dated September 29, 2016 , SEBI Circular no. SEBI/HO/MIRSD/ MIRSD2/ CIR /P /2016 /92 dated September 23, 2016, SEBI Circular no. Cir/MIRSD/ 9 /2010 dated Nov 4, 2010 and SEBI Circular no. CIR/MIRSD/3/2014 dated Aug 28, 2014 

Registration certificate issued by the Exchange is required to be displayed at the member's head office and branches/Authorized Person’s offices.

Yes, you may please refer Circular No.MCX/CTCL/103/2016 dated April 1, 2016 , MCX/CTCL/315/2016 dated September 29, 2016, MCX / CTCL/345/2016 dated October 7,2016 MCX/CTCL/096/2017 dated March 30,2017 and  MCX/INSP/325/2016 dated September 29, 2016 

No. You may please refer Circular no. MCX/T&S/402/2012 dated November 30, 2012

Yes, you may please refer Circular No.MCX/CTCL/103/2016 dated April 1, 2016 , MCX/CTCL/315/2016 dated September 29, 2016, MCX / CTCL/345/2016 dated October 7,2016 MCX/CTCL/096/2017 dated March 30,2017 and  MCX/INSP/325/2016 dated September 29, 2016.

Registration certificate issued by the Exchange/ SEBI is required to be displayed at the member's head office and branches/Authorized Person’s offices.

Fund Management

Full Pay-out of Funds has been made to all clients within 24 hours of receiving relevant payout from the Exchange for the clients from whom no authorization has been obtained with respect to maintaining  running account

 Please refer Circular no. MCX/INSP/325/2016 dated September 29, 2016.

Statement of Accounts for funds (with error reporting clause) has been sent every month to all clients and Proof of Dispatch is maintained.

 You may please refer to Exchange Circular MCX/INSP/325/2016 dated September 29, 2016

You may please refer Exchange Circular no. MCX/INSP/295/2016 dated September 26, 2016, MCX/INSP/325/2016 dated September 29, 2016 and SEBI Circular MRD/SE/Cir- 33/2003/27/08 dated Aug 27, 2003 and SEBI Circular no. SEBI/HO/MIRSD/MIRSD2/CIR/P/2016/92 dated September 23, 2016  

No, Please refer circular no. MCX/INSP/325/2016 dated September 29, 2016 

Yes, please refer Circular No. MCX/C&S/274/2016 September 07, 2016, MCX/C&S/293/2016 dated September 26, 2016 and MCX/INSP/325/2016 dated September 29, 2016

The settlement of funds/securities shall be done within 24 hours of the pay-out, Unless client specifically  authorize the stock broker to maintain a running account.

 In case of Running Account authorization settlement of clients’ credit balances are required to be settled as per

Circular No. MCX/INSP/325/2016  dated September 29, 2016.

Yes, refer circular Sebi Circular no. CIR/MIRSD/03/2011 dated Jun 9, 2011, SEBI/HO/MIRSD/ MIRSD2 / CIR / P/2016/92 dated September 23, 2016 and MCX Exchange circular no.MCX/INSP/325/2016  dated September 29, 2016.

You may please refer the Circular No. MCX/COMP/082/2014 dated March 15, 2014 and MCX/COMP/033/2015 dated February 6, 2015 .

You may refer to Circular No. MCX/C&S/109/2014 dated March 29, 2014, MCX/C&S/117/2014 dated April 01, 2014, MCX/C&S/172/2014 dated May 02, 2014 and MCX/C&S/383/2014 dated December 01, 2014.

You may refer to Circular No. SEBI Circular no. SEBI/HO/CDMRD/DRMP/CIR/P/2016/80 dated September 07, 2016 and Exchange circular MCX/C&S/274/2016      dated September 07, 2016, MCX/C&S/293/2016 dated September 26, 2016 and MCX/INSP/325/2016 dated September 29, 2016 

Miscellaneous

Yes, you may please refer to Circular No. MCX/207/2006 dated May 19, 2006.
The link for references available at our website www.mcxindia.com under the link Membership> Existing Members> Annual Returns

No, you may please refer MCX/INSP/325/2016 dated September 29, 2016

Exchange circular  no. MCX/INSP/298/2016 dated September 27, 2016, MCX/INSP/325/ 2016 dated September 29, 2016 and SEBI Circular no. SEBI/HO/ CDMRD/DMP/P/CIR/2016/100 September 27, 2016

 
Yes, refer to the following link available at our website www.mcxindia.com under Membership>Compliances>Status Report.

No, however member can act through or on behalf of another member for trading on the Exchange with the prior approval of the Exchange in writing or deal with one member of another exchange for proprietary trading after intimating the name of such member to MCX. 

Yes, you may please refer to Circular No. MCX/COMP/085/2010 dated March 18 2010, MCX/COMP/374/2009 dated September 16, 2009 and MCX/058/2004 dated July 09, 2004
You may please refer Circular No. MCX/INSP/325/ 2016 dated September 29, 2016

It is mandatory for Members to have an Indemnity Insurance Policy so as to protect themselves from risks and hazards relating to their Business operations at the Exchange.

 Members are advised to obtain the Insurance policy from any insurance company directly and the Exchange will not be collecting any premium from Members.

 You may please refer Exchange Circular no.MCX/FIN-ACCT/306/2016 dated September 29, 2016 and MCX/INSP/325/ 2016 dated September 29, 2016

All the members are required to obtain MCX Certified Commodity Professional (MCCP) certification and to ensure that atleast one person in their office has passed the said examination and live certificate is available with the member at all times.

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