MCXCCL- India’s First Clearing Corporation to Function from Sept 3

India’s Multi Commodity Exchange Clearing Corporation Ltd. (MCXCCL), a wholly owned subsidiary of Multi Commodity Exchange of India Ltd (MCX) will commence operations from September 3, 2018., said MCX in a stock filing on Thursday (30).

In an inaugural ceremony on Thursday (30) at exchange premises in Mumbai SK Mohanty, Wholetime Member, Securities and Exchange Board of India (SEBI), the chief guest for the event, unveiled the plaque symbolizing the launch of MCXCCL, the first clearing corporation in the commodity derivatives market in India.

“MCXCCL will provide secure counter-party risk management and post-trade services that would help mitigate risks. It will be the central counter-party for all trades executed on MCX. The clearing corporation will also be responsible for the collection of margins from the members, effect pay-in and pay-out of funds and commodities,” MCX said.

At the time of commencement, MCXCCL will have a Settlement Guarantee Fund (SGF) of over £1.77 billion. Its members can choose among 13 clearing banks empaneled by MCXCCL for fund settlement.

Speaking at the occasion, Saurabh Chandra, Chairman, MCX said, "The centralised and independent clearing institutions are the cornerstones of market integrity and efficiency. These market infrastructure institutions are expected to play a pivotal role in the ongoing reforms in the Indian commodity derivatives market.

“The institutionalisation of clearing with sound risk management practices and operational efficiencies would further facilitate market growth and add immense value to commodity eco-system. This would also enable greater institutional participation and help in the development of new products. The establishment of MCXCCL is a significant milestone in the history of commodity markets," he added.

MCXCCL is a wholly owned subsidiary of MCX. It is the first clearing corporation in the commodity derivatives market in India. It will provide secure counterparty risk management and post-trade services to the market participants that would help mitigate risks and step-up operational standard for clearing and settlement functions in the Industry.

MCXCCL shall facilitate deliveries in various commodities across multiple locations in India. It will provide Electronic Commodity Accounting and Receipts Tracking System through the web-based portal 'Commodity Receipts Information Systems' (COMRIS). In terms of innovation, it will guarantee funds pay-out to its clearing members till marking of delivery and financial compensation (to make good losses of a non-defaulting party) in case of default (in goods or funds pay-in) after making delivery, MCX said.