 "MCX to levy concentration margin from December")
MCX Friday announced the imposition of concentration margin which will be effective from 1 December this year. Sebi had mandated commodity exchanges to impose concentration margin with an increase in open interest positions. This was done to ensure some big players don't corner positions to manipulate prices.
The MCX has decided to introduce concentration margin as an additional risk management measure. The concentration margin will be levied at clearing member level based on contracts in which the open interest value exceeds the threshold value of Rs 250 crores and it shall be applicable at a contract level.
The clearing member's open interest in the contract shall be compared with the market wide open interest in a given contract and based on that margins will be levied. The exchange said that if a clearing member's share in market's wide open interest is up to 20 per cent, then no concentration margin, but if that exceeds for incremental positions from 20 to 25 per cent, 1 per cent additional margin and 25 per cent and above margin will be 2 per cent. This will be over and above all margins.
