multi commodity exchange
DESCRIPTION
Multi Commodity ExchangeTRANSCRIPT
MULTI COMMODITY EXCHANGE
INTRODUCTION Established in 2003 Offers futures trading in Bullion, ferrous
& non-ferrours metals, energy & agricultural commodities
India's No. 1 commodity exchange with 83% market share
Daily turnover of MCX was about US$ 6 to 8 billion
Strategic alliances
PROBLEMS
INTRODUCTION OF CTT
Introduction of commodities transaction tax (CTT) and cut STT on equity futures by 41%
0.01% CTT on commodities futures and equity futures
Currency futures and interest rate futures attract no transaction taxes
NSEL SCAM EFFECTS Stock Price crashed by 60%-70% Goodwill got affected India’s image as a emerging place to trading,
securities, exchange, etc got hammered Investors confidence was at an all-time low Lower turnover
SOLUTIONS
INVOLVEMENT OF FOMC Grant Thornton appointed by FMC to conduct a
forensic audit
Grant Thornton is likely to examine the trades done by the IBMA on MCX
FMC has also written to the Finance Ministry to direct banks to insist on borrowers who have exposure to commodities, hedging their price risks
PROMOTER STAKE SALE
PROMOTER STAKE SALE FMC has directed the Jignesh Shah-led FTIL to
reduce its stake in MCX from 26% to less than 2%
FMC allowed Blackstone GPV Capital Partners to increase its stake in MCX
Tata Capital, Kotak Mahindra Bank and BSE are the frontrunners to buy FTIL stake in MCX
R-ADAG, Warburg Pincus, US-based exchange CME, Deutsche Borse and Dubai-based commodity exchange DGCX submitted non-binding offers
HIRING PROFESSIONAL MANAGEMENT Hiring consultants for risk management Long terms assurance from government Resolving dispute by using arbitration
process
APPROACH GOVT AUTHORITIES TO ABOLISH CTT
STT is a bad tax and must be abolished Also scrapping the CTT Increase in trading costs and hence affects
liquidity in the markets
FOCUS ON EQUITY PLATFORM Focus on STT reduction (0.017% to
0.01%) Easy pay-in & pay out of funds Advertisement on social networking
sites Tie up with local brokers Promotion of SX’40 Index on business
channels
BIBLIOGRAPHY Business standard Live mint Wikipedia www.mcxindia.com www.mcx-sx.com
THANK YOU