The Multi Commodity Exchange Clearing Corporation Ltd. (MCX), on July 29, 2024, issued a notification regarding the Amendment in Margin Shortfall Block Amount (MSBA) Methodology.
Clearing Members of MCXCCL are hereby informed of the following amendments to the Margin Shortfall Block Amount (MSBA) provisions as part of risk management measures:
If a Clearing Member's margins are overutilized by INR 5 lakhs or more, beyond their margin limits, on more than two occasions in the past 30 calendar days, MCXCCL will take the following actions:
•A Margin Shortfall Block Amount (MSBA) equivalent to the cumulative margin shortage over the past 30 days will be blocked from the clearing member's deposits. This calculation will consider the margin shortage when the 100% trigger point was violated on each occasion.
•The blocked amount will not be available for any margin benefits.
•If there are multiple instances of margin shortage in a day, the highest amount at the time of violating the 100% trigger point will be considered.
•Members will have two clear settlement days from the date of intimation to provide the MSBA.
•The Clearing Corporation will block the MSBA from the member's available collaterals on the T+3 day.
•If the member's margin utilization reaches 85% after blocking the MSBA, the member will be placed in suspend-square off mode until compliance with the MSBA is achieved, or until the retention period ends. Members may provide additional collateral or reduce outstanding positions to facilitate the blocking of MSBA.
•The MSBA will be retained as an exposure-free deposit for 30 calendar days and will be released afterward, retaining any applicable MSBA requirement, if necessary.
These amendments to the risk management measures will take effect from the assessment date of August 1, 2024.
[Notification No. MCX/MCXCCL/505 /2024]
