Institutional clearing member, Financial Management

Assignment Help:

Institutional Clearing Member (ICM)

A Financial Institution has to subscribe to at least 100 equity shares of Rs.10,000 each to become an Institutional Clearing Member of COFEI. Besides they have to contribute a minimum of Rs.10,00,000 towards guarantee fund and pay Rs.1,00,000 towards admission fees. COFEI will have two Institutional Clearing Members. An institutional clearing member shall have the right to clear transactions in coffee contracts of ordinary members, trading members, trading-cum-clearing members if such transactions in coffee contracts are executed by a trading member or a trading-cum-clearing member in the trading ring. An ICM can levy clearing fee on different categories of Members up to the ceiling fixed by COFEI on clearing transactions by a Trading-cum-Clearing Member.

A non-member can also trade at the exchange through a Trading/Trading-cum-Clearing Member.

The following tools are adopted by COFEI to contain the risk.

  • By imposing margins on the traders;
  • Daily marking-to-market of all trades;
  • By imposing limits on the net positions of Clearing Members linked to their capital and guarantee fund;
  • By setting daily price limits for trading; and
  • By maintaining sufficient capital including guarantee fund.

 


Related Discussions:- Institutional clearing member

Bond Valuation, The Pennington Corporation issued a new series of bonds on ...

The Pennington Corporation issued a new series of bonds on January 1, 1979. The bonds were sold at par ($1,000), have a 12 percent coupon, and mature in 30 years, on December 31,

How financial system works, Question: Part A  The financial syste...

Question: Part A  The financial system is complex in structure and function throughout the world. There are many different types of institutions: banks, insurance compani

Leverage, evaluate the importance of leverage in financial management of a ...

evaluate the importance of leverage in financial management of a small scale company

Determine the management buy-outs, Determine the Management buy-outs ...

Determine the Management buy-outs Management buy-outs (MBOs) The management of company buy out the shareholders. Management will usually require financial backers (ventu

Double declining balance method , Suppose that the business uses the double...

Suppose that the business uses the double declining balance method to depreciate  its equipment (a)  Determine the net book value, depreciation expense, and accumulated deprecia

Quantitative or mixed-methods study, Application: Critiquing a Qualitative,...

Application: Critiquing a Qualitative, Quantitative, or Mixed-Methods Study Over the last several weeks you have explored many qualitative, quantitative, and mixed-methods rese

Accrued dividend, It is an accounting term which refers to the balance shee...

It is an accounting term which refers to the balance sheet item that accounts for dividends that have been confirmed but not yet given to shareholders. Accrued dividends are taken

Portfolio risk, What is the correlation between the efficient portfolio and...

What is the correlation between the efficient portfolio and the risk-free asset? Possible answers are +1, -1, 0, or cannot be calculated.

Convertible bonds, Convertible bonds are the debt instruments issued which ...

Convertible bonds are the debt instruments issued which can be converted after a pre-specified date for a pre-specified number of securities (generally equity stock). I

Wcr expense ratios, Scenario:  ABC Company sells widgets in three varietie...

Scenario:  ABC Company sells widgets in three varieties (blue, red, and yellow) but has lost money for the past three years.  Competitive intelligence shows the Company's products

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd