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

Types of investment decisions, Q. Types of investment decisions? (1) Sh...

Q. Types of investment decisions? (1) Short-term investment decisions: - This kind of investment decisions related to the short-term assets. These decisions are as well called

Illustrate methods to manage cash resources, Q. Illustrate Methods to Manag...

Q. Illustrate Methods to Manage cash resources? There are several methods which may be of use in managing resources. The particular tool selected will depend on its reliability

What is over capitalization, Accounting and Financial Management 1. Wha...

Accounting and Financial Management 1. What is over capitalization? How do we know over capitalization has occurred? 2. Explain permanent and temporary working capital. 3

Determine the working capital cycle, Working capital cycle (operating/tradi...

Working capital cycle (operating/trading/cash cycle) It is the time between paying for goods supplied and final receipt of cash from their sale. It is desirable to keep cycle a

How is present value affected by change in the discount rate, How is presen...

How is present value affected by a change in the discount rate? Present value is inversely associated to the discount rate.  In other words current value moves in the opposite

Determine the movements in working capital, Movements in working capital ...

Movements in working capital The year-end balances of trade, inventories and other receivables and payables are taken for current year-end as well as last year-end statement

Illustrate compound value concept, Q. Illustrate Compound Value Concept? ...

Q. Illustrate Compound Value Concept? The Compound Value Concept is used to find out the FV of present money. It is the same as the concept of compound interest, wherein the in

Negotiation with bidders, N egotiation You can also negotiate with the...

N egotiation You can also negotiate with the bidders based on the requirements as mentioned below. You can negotiate only with the lowest evaluated responsive and qualified

Components of a callable bond, A callable bond is the sale of a call ...

A callable bond is the sale of a call option by the investor to the issuer as it allows the issuer to repurchase the bond from the time it becomes callable until

Weighted average cost of capital, Weighted Average Cost of Capital Wei...

Weighted Average Cost of Capital Weighted average cost of capital is the average cost of the costs of several sources of financing. Weighted average cost of capital is also kn

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