The Multi Commodity Exchange Clearing Corporation Ltd. (MCX), on July 08, 2024, issued a notification regarding the Financing of Securities and Commodities Transactions.
This is about the Exchange Circular, which advised trading members against financing securities transactions. Members were instructed not to act as intermediaries for financing secondary market transactions, including those in commodity derivatives, unless in compliance with regulatory provisions such as the Margin Trading Facility and Securities Lending and Borrowing.
In Exchange Circular it was reiterated that "Trading Members shall not share transaction/obligation details of clients with NBFCs or any other lending institutions."
However, inspections have revealed that Trading Members have been sharing unique client codes, settlement details, and obligation details with related NBFC entities.
In light of this, we reiterate that members must refrain from sharing client transaction/obligation details with any NBFCs or lending institutions.
[Notification No. MCX/INSP/449/2024]
