MCX Stock Exchange
|This article needs additional citations for verification. (July 2013)|
Thomas Mathew T (Chairman) Ashima Goyal (Vice Chairman)Saurabh Sarkar (MD & CEO)
|Products||Currency futures contracts (USD-INR, EUR-INR, GBP-INR, JPY-INR)|
MCX Stock Exchange Limited (MCX-SX) is India’s youngest and one of the three stock exchanges recognized by country’s securities market regulator - Securities and Exchange Board of India (SEBI). It offers an electronic, transparent and hi-tech platform for trading in Capital Market, Futures & Options, Currency Derivatives, Interest Rate Futures (IRF) and Debt Market segments.
The exchange was founded with commitment to financial literacy, social inclusion and market development guided by the philosophy of ‘Information, Innovation, Education and Research’ as the four cornerstones. Since inception, we have worked aggressively in spreading awareness, providing good competition to established exchanges and bringing market innovation to the market to cater to the financial needs of the hedgers, traders and investors. Investors at the MCX-SX include top domestic banks and financial institutions.
MCX-SX has a large pan-India presence across cities and towns with 950 registered members and they constitute the diversified market participants. The Exchange has carved out its own space through superior customer service, product innovation, cutting edge technology and aggressive investor awareness campaigns. It was selected as the ‘Stock Exchange of the Year - Asia’ in the European Asia Awards 2014.
MCX-SX’s current shareholders include India’s top public sector banks, private sector banks, top investors and domestic financial institutions. The Exchange is professionally managed with high level of corporate governance and operates in extant regulatory environment and subject to yearly audit / inspection by SEBI and that ensures utmost transparency in its operations. Being one of the youngest and the most aggressive stock exchange in India, in a short span of six years of operations, it has established a reputation for innovation, customer service and market development. In its pursuit to provide more products and services to the investor and traders and develop the financial ecosystem of the country, the Exchange has plans to focus on various innovative products.
Some of the innovations that distinguishes MCX-SX from the other market players consist of its unique corporate services, differentiated debt and IRF platforms, sectoral and thematic tradable indices, weekly cash settled derivatives contracts and limited membership to mutual fund distribution.
About MCXSX CCL – The Exchange’s arm for Clearing and Settlement of trades
In line with global best practices and regulatory requirements, clearing and settlement of trades done on MCX-SX are conducted through a separate clearing corporation arm − MCX-SX Clearing Corporation Ltd. (MCXSX CCL), which is a subsidiary of the Exchange. MCXSX CCL acts as a central counterparty to all trades on MCX-SX and to provide clearing and banking services, it has empanelled a number of banks that include Axis Bank, Bank of India, Central Bank of India, HDFC Bank, Canara Bank, IDBI bank, ICICI bank, Kotak Mahindra Bank, IndusInd Bank, Yes Bank, State Bank of India and Union Bank. It has efficiently completed more than 2282 on-time, zero-default settlements as on 31st Dec 2014
State of the Art Exchange Technology: MCX-SX has the best in class automated screen based trading system, which is hosted on a fully fault tolerant Stratus ftServer. Stratus ftServer delivers an up-time of 99.999% providing continuous availability. Other components of MCX-SX framework are hosted on high-end Intel Nocona processor based servers with various redundancy features. For redundancy in Network, trading members/stock brokers can have multiple mediums of connectivity such as Lease line (POP), VSAT and Internet. The databases for the Trading System as well as the Clearing and Settlement System are clustered using redundant storage area network. The robust technology infrastructure enables the Exchange to operate efficiently, and also facilitate fast order routing, immediate trade execution, trade reporting, market data dissemination, risk management and market surveillance.
MCX-SX maintains a disaster recovery site (DRS) in North India. Replication of data is done on a real-time basis from trading system at the primary site in Mumbai to the trading system at the DR site. Data synchronization between Primary Site and DR site is done as a part of daily routine operations. Periodic mock tests are done to ensure proper functioning of DR systems.
SX40 is the flagship Index of MCX-SX. A free float based index of 40 large cap - liquid stocks representing diversified sectors of the economy. SX40 is designed to measure the economic performance with better representation of various industries. The Index is devised to offer cost-effective support for investment and structured products such as index futures and option, index portfolio, exchange traded funds, Index funds, etc. SX40 is designed to be a performance benchmark and to provide for efficient investment and risk management instrument. It would also help in structuring passive investment vehicles
MCX-SX currently Rupee(EURINR), Pound Sterling-Indian Rupee (GBPINR) and Japanese Yen-Indian Rupee (JPYINR). The currency futures contracts on MCX-SX enable Indian Importers, Exporters, Corporates, Banks and other participants to effectively hedge their risks arising out of volatile currency prices. These contracts also offer a better fexibility than the currency contracts traded on over-the-counter (OTC) market as the structure and pricing of an exchange-traded contract is more transparent.
Specifications of the MCX-SX USDINR contract are as stipulated by RBI and Securities SEBI, and are as follows:
|Unit of trading||1 (1 unit denotes 1000 USD)|
|Underlying||The exchange rate in Indian Rupees for a US Dollar|
|Tick size||Tick size Rs.0.25 paise or INR 0.0025|
|Trading hours||Monday to Friday 9.00 a.m. to 5.00p.m.|
|Contract trading cycle||12 month trading cycle.|
|Last trading day||Two working days prior to the last business day of the expiry month at 12.15p.m.|
|Final settlement day||Last working day (excluding Saturdays) of the expiry month.
The last working day will be the same as that for Interbank Settlements in Mumbai.
Risk management at MCX-SX:
MCX-SX has a very robust risk management system in place. The salient features are as follows: Policies / Procedures / Standards: The Information security management systems of the Exchange are in accordance with the internationally recognized standards (ISO/ IEC 27001:2005). It follows the “Defense-in-depth” mechanism
Real Time Risk Management: A real-time monitoring of mark to market losses is carried out. The Exchange also has a system for generating alerts on MTM losses or margins exceeding applicable limits.
Business Continuity Plan: The Business Continuity plan of the Exchange covers important factors of the business impact analysis, business continuity strategy and implementation of BC and disaster recovery plan.
Clearing and Settlement: The MCX-SX Clearing Corporation Limited (MCX-SXCCL), acts as the central counterparty providing novation and clearing & settlement services for various asset classes that are traded in the MCX Stock Exchange Limited (MCX-SX). The MCX-SXCCL is a subsidiary of the MCX-SX and a Clearing Corporation recognized by the SEBI under the Regulation 4 of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012. The MCX-SXCCL is also a Qualified Central Counter Party (QCCP) subject to the SEBI’s regulatory framework which is consistent with CPSS-IOSCO Principles for Financial Market Infrastructures. The MCX-SXCCL has adopted various best practices in the industry to make sure transactions are managed efficiently and completed seamlessly, which includes transparency in its functions, capital adequacy norms for membership, dedicated settlement guarantee fund, globally accepted systems for margining, online monitoring of Margins & Mark to Market Losses, online monitoring of member positions based on prudential position limit norms, system driven pre-trade risk controls on higher margin utilization, automatic trading restriction on breach of prudential limits, multilateral netting for obligation computation and regular stress testing / back testing of margins
Important Developments at MCX-SX:
Oct 2008 Launched Currency Futures trading in USD-INR contracts
Feb17, 2009 MCX Stock Exchange Clearing Corp Ltd. (MCX-SX CCL), the clearing and settlement arm of the exchange commenced operations
July 2009 Launched NISM certification programs in currency derivatives
Jan 2010 Launched trading in three new currency pairs – EURINR, JPYINR and GBPINR
Jul 10, 2012 SEBI has granted permission to deal in Currency Options, Equity and Equity Futures & Options, Interest Rate
Aug 2012 Launched trading in Currency Options
Dec 20, 2012 Receipt of ‘commencement certificate’ from SEBI
Dec 21, 2012 Govt of India granted “recognized stock exchange” status to MCX-SX
Feb 9, 2013 Hon’ble Union Finance Minister Shri. P Chidambaram inaugurated Equity and Equity Derivatives segment
Feb 11, 2013 live trading begins in Equity and Equity Derivatives segment
Jan 9, 2014 Received SEBI approval to launch Interest Rate Futures (IRF) segment
Jan 20, 2014 Started live trading in IRF
Aug 5, 2014: COMPAT uphelds CCI order on “Zero Pricing” in favour of MCX-SX
Aug 25, 2014: Exchange shifts to a newer premiere business district at BKC, Mumbai
Sep 01, 2014: MCX-SX shifted its data Centre to a new location at Tata Communications as a part of its turnaround strategy
Sep 16, 2014: Renewal of recognition to the Exchange by SEBI
Sep 17, 2014: SEBI cleared new name of the Exchange ‘Metropolitan Stock Exchange of India Ltd (mSXI)’
- Banks: Union Bank Of India, Punjab National Bank, Bank of Baroda, Bank of India, Andhra Bank, Allahabad Bank, Oriental Bank of Commerce, Indian Bank, Indian Overseas Bank, Corporation Bank, Syndicate Bank, HDFC Bank Ltd, Vijaya Bank, United Bank of India, Axis Bank Ltd, State Bank of India, Punjab and Sind Bank and UCO Bank
- Corporates: Edelweiss Commodities Services Ltd, Trust Investment Advisors Pvt Ltd, IL & FS Financial Services Ltd, Multi Commodity Exchange Of India Ltd.
- Indian Financial Institution: IFCI Ltd.
- Individuals / Firms : Dr. Rakesh Jhunjhunwala, Mrs. Viral A. Parikh, Nemish S. Shah as Karta of Nemish S. Shah H.U.F., Mr. Kalpraj Dharamshi, Mr. Dhanesh Sumatilal Shah, Mr. Uday Shah, Ms. Madhuri Kela, Ms. Renuka Shah, Ms. Madhu Vadera Jayakumar, Derive Investments