Collaterals

Initial Security Deposit

The members of the Exchange are required to pay interest free security deposit as prescribed by the Exchange at the time of admission, which will be used as margin deposit against exposure of the members. The same shall be given minimum 50% in the form of Cash and balance in the form of Fixed Deposit Receipts / Bank Guarantee

Additional Deposit

To increase the exposure limits for trading, the members may remit additional security deposit in the following forms:

time Initial Security Deposit

The members of the Exchange are required to pay interest free security deposit as prescribed by the Exchange at the time of admission, which will be used as margin for giving exposure to the members. The same shall be given minimum 50% in the form of Cash.

This is payable only by way of demand draft drawn in favour of ‘Multi Commodity Exchange of India Limited’ payable at Mumbai.

time Additional Security Deposit

Members may deposit cash margin towards their additional margin requirements by funding their settlement account with the requested amount and effecting the transfer of the same to the Exchange settlement account.

time Intimation letter formats:

Format for Increase of Additional Cash Deposit.

In case, member may wish to release the additional cash deposit, the intimation may sent through format as specified

Format for Release of Additional Cash Deposit

Online Cash release format

Members can submit Bank Guarantee approved by the Exchange for the purpose of initial & additional deposit.

time Guideline for Bank Guarantee

  • Bank Guarantee should be in the favor of MCX from Approved Banks in the specified format
  • BG has to be on Non-Judicial stamp paper of minimum Rs.300/- or the value prevailing in the State where executed, whichever is higher.
  • All the blanks in the format are required to be duly filled/ cancelled, wherever necessary, by the issuing bank along with their stamp and signature against each blank, if filled separately.
  • Each page of the bank guarantee should bear the bank guarantee number and signed by two authorized signatories of the bank.
  • Expiry date and Claim period should be mentioned in BG.
  • If an issuing bank does not provide for a specific claim period beyond the expiry date, the maturity period of such BG shall be reduced by 30 days before the expiry date of BG, which shall be deemed as a claim period.
  • Endorsement of any correction / Hand written instructions on the BG is required.
  • BG for intial security deposit should be issued for a minimum period of 12 months and for additional security deposit minimum period of 3 months is essential, with a specific claim period of minimum 30 days.
  • The clearing member should also ensure that the bank guarantee is free from any discrepancy before the same is submitted to the Exchange.
  • Prescribed formats for submitting BG:

In case the bank guarantee does not strictly conform to the above-mentioned conditions, the same shall not be accepted by the Exchange and benefit towards additional margins shall be made available only upon the bank guarantee being strictly in conformity with the prescribed requirements.

List of approved Banks for submission of Bank Guarantee

In case of Axis Bank, HDFC Bank, ICICI Bank, Indusind Bank, The Ratnakar Bank Ltd, Kotak Mahindra Bank Ltd & Yes Bank, exchange has also entered into the Master Agreement and accordingly the formats are available below.

Members can submit Fixed Deposit Receipt approved by the Exchange for the purpose of initial & additional deposit.

time Guideline for Fixed Deposit Receipt

  • FDR should be in the name of “Multi Commodity Exchange of India Ltd. A/c – Member Name” or “MCX A/c Member Name” from approved banks in the specified format
  • FDR should be accompanied by the Lien letter from the bank as well as the member. The lien letter shall be strictly in the format prescribed by the Exchange.
  • Endorsement by the member – On the reverse of FDR stamp affixed and signed.
  • Endorsement by the Banks - Any correction / Hand written instructions on the FDR.
  • The minimum value of FDR that may be accepted shall be Rs. 50,000 and multiples there of.
  • The FDR should be issued for minimum period of 3 months in case of additional margin deposit and for a minimum period of 36 months in case of initial security deposit
  • Exchange prescribed formats for Submitting FDR:

List of approved Banks for submission of FDR.

Know your current collaterals .

Online release of FDR.

Authorisation Format for Hand Delivery of FDR.

Members can submit warehouse receipt(s) of commodities approved by the Exchange towards additional deposit.

time Guidelines for pledge of commodities

  • The member should submit an intention for pledge to the C&S & the Delivery Department.
  • The member should provide a copy of the pledge deed in the prescribed format. The pledge deed Non-Judicial stamp paper of minimum Rs.300/-. The deed should be complete in all respects and shall be duly signed by the authorized signatory in the presence of minimum 2 witnesses.
  • The pledge deed shall be accompanied by the annexure of commodities to be pledged.
  • Proof of the pledge of commodities should be provided to the C&S and the Delivery Department.
  • Only on confirmation of the actual receipt of the goods, the member shall be provided with the eligible additional margin benefits.
  • Commodities shall be valued at the closing price / settlement price of the previous day for the near month contract of the commodity.
  • Once the near month contract enters the tender period, rates of the immediate far month contract shall be considered for the purpose of valuation.
  • The valuation arrived at, shall be subject to the commodity wise haircut to arrive at the eligible value of the collateral. The eligible value shall be subject to the commodity level limit as specified above with a ceiling limit of Rs.50 Crores across all commodities.
  • The valuation of the commodities is done on a daily basis.

In case, member may wish to release the additional deposit in the form of commodities the intimation may sent through format as specified

Members can submit securities approved by the Exchange in demat form with the approved custodian(s) for the purpose of additional deposit.

Members are required to open a separate demat account with the Exchange approved custodian(s) for depositing securities.

  • In case of Individual Member
    Member may open an account in their name if securities offered are held in their names.
  • In case of Partnership Firm
    Member may open an account in their partners' names if shares are held in the names of the partners as the case may be
  • In case of Corporate Body
    Member may open an account in the corporate name or in the name of their designated directors as the case may be depending upon the beneficiary of shares

Members may get in touch with the officials of the approved custodian(s) to ascertain the modalities with regard to deposit of securities.

time Guidelines for pledge of securities

  • These securities shall be pledged in favour of Multi Commodity Exchange of India Limited (the Exchange).
  • The securities shall be subject to a minimum margin / hair cut as specified by the Exchange from time to time.
  • The Exchange may issue / revise the list of approved securities from time to time.
  • The securities will be accepted from a member with the following upper limits or such amount as may be decided from time to time:
    • Shares of single ISIN from Annexure I Link upper limit of Rs. 5 Crores (Net of hair-cut)
    • Share of single ISIN from Annexure II -Link upper limit of Rs 2 Crores (Net of hair-cut)
    • Shares of all the ISINs (collectively) upper limit of Rs. 25 Crores (Net of hair-cut)
  • The value of the securities deposited will be reckoned at the last closing price / rate every day.
  • Valuation will be done on the basis
  • The applicable haircut will be the Value at Risk (VaR) of the respective security calculated on the basis of NSE prices.

In case, member may wish to release the additional deposit in the form of securities. The intimation may sent through format as specified

Principles of Valuation

  • All the above mentioned forms of deposit, except cash, are subject to their respective upper caps.
  • Maximum deposit in the form of BG/FDR is 3 times the cash deposit.
  • Where the member maintains a minimum cash deposit of Rs. 50.00 Lacs and provides an undertaking for the same, the member shall be exempt from the 1:3 ratio. In such a scenario, there shall be no upper cap for the maximum value of BG/FDR.
  • Warehouse receipts are governed by the interim commodity level limits & the total limit criteria (50 crores across all commodities).
  • Securities are governed by the interim scrip level limits & the total limit criteria (25 crores across all scrips).
  • In addition to the individual limits, limits under warehouse receipts and securities shall be restricted to the sum total of cash deposit, bank guarantee and fixed deposit receipt.

Collateral Valuation Matrix View

Collateral Category Permitted Components Remarks/limit
Cash Cash Full Limit
Cash Equivalent
  • Bank Guarantee
  • Fixed Deposits
Permissible limit restricted to 3 times of cash margin deposit
Non Cash Collateral
  • Eligible Securities
  • Warehouse Receipts
  • Governed by the upper cap as at
    • individual security/commodity level
    • overall security/commodity level
  • Also restricted up to sum total of Cash and Eligible cash equivalent.

Know your current collaterals

 

The members are requested to forward all their clearing & settlement related correspondence on the following address:

Multi Commodity Exchange of India Limited

Clearing & Settlement Department

CTS no. 255,

Exchange Square,

Suren Road, Andheri (East),

Mumbai – 400093,

Maharashtra, India

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+91 22 6649 4100
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