New MCX circular

Discuss New MCX circular at the Commodities within the; Plz some one explain detail: Dear All, Market Abuse – Cross Deals / Wash Trades ...

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Old 14th October 2016, 12:03 PM
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Default New MCX circular

Plz some one explain detail:

Dear All,

Market Abuse – Cross Deals / Wash Trades / Self-Trades / Structured Deals

​It's been observed that certain trades are carried out by clients which are in nature of “Cross Deals” and / or “Structured Deals” as defined in the Bye Laws of the Exchange, especially when the same client appears on both the sides of the trades. In order to ascertain the genuineness of such trades, Exchange shall compare the value of such trades with the value of total trades executed in the concerned contract by the client and total value of trades executed in the contract on the Exchange.

For liquid contracts, if the proportion of traded value of this nature is more than a threshold, as considered by the Exchange from time to time, especially for the trades executed on account of buy and sell orders placed within 60 seconds, such trades shall be considered as abnormal trades and a form of market abuse. A penalty of 0.10% of the value of such trades, subject to a minimum of Rs 10,000/- shall be levied by the Exchange.

Further, Members may note that cross deals in large numbers in illiquid contracts and executed in proportions higher than a threshold, shall be construed as fictitious transactions and dealt with in accordance MCX circular no. MCX/COMP/113/2010 dated April 05, 2010 and accordingly, a penalty of Rs 1 lakh to Rs 5 lakhs shall be applicable for such transactions.

Contracts shall be considered as liquid / illiquid after taking into account the number of trades, traded value and such other criteria as may be considered relevant by the Exchange from time to time.

Exchange shall have the rights to seek explanation for any other observed trading pattern. Further, Exchange reserves the right to consider any other criteria or trading pattern and other circumstantial evidence to identify other forms of market abuses and impose penalty and / or take additional disciplinary actions in accordance with the Rules, Bye- Laws and Business Rules of the Exchange.

Kindly adhere to exchange rule and Bye-Laws and ensure compliance.

For more details, Please find the below circular from MCX.

Circular no: MCX/T&S/325/2014​


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Old 14th October 2016, 03:44 PM
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Default Re: New MCX circular

In short, some restriction for HFT (High frequency traders) .


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