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

Evaluate net realisable value of assets, Q. Evaluate Net realisable value o...

Q. Evaluate Net realisable value of assets? Valuation (i) Method 1 - Net assets according to the statement of financial position Value = $295000 Reservation N

Determine the meaning of reportable segments, Determine the meaning of Repo...

Determine the meaning of Reportable segments Reportable  segments  are  operating  segments  or  aggregations  of  operating  segments  which meet specified criteria(core princ

Liquidity risk, what role do core deposits play in predicting the probabili...

what role do core deposits play in predicting the probability distribution of net deposit drains

OPERATING CYCLE, discuss the applicability of operation cycle in avegetab...

discuss the applicability of operation cycle in avegetable growing business

Operating cycle and financial management, discuss the applicability of oper...

discuss the applicability of operating cycle and any other financial management in poultry business in uganda

Beta value, Beta Value Risk is an important consideration while investi...

Beta Value Risk is an important consideration while investing in any security. It is the possibility that realised returns will be less than the returns expected. The degree, t

Operating cycle, what is the applicability of the operating cycle in a vege...

what is the applicability of the operating cycle in a vegetaion farm in Uganda

Secured lbo financing or asset-based lending, Secured LBO Financing or Asse...

Secured LBO Financing or Asset-Based Lending Under asset-based lending, the borrower pledges certain assets as collateral. Asset-based lenders look at the borrower's assets as

Liabilities, compare and contract the potential liabilities of owners of pr...

compare and contract the potential liabilities of owners of proprietorship,partnership and corporation

Types of frns, Types of FRNs In an era of innovations, while changing n...

Types of FRNs In an era of innovations, while changing needs and preferences of the investors trigger introduction of newer FRNs, the borrowers' funding specifications also nec

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