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