The Multi-Commodity Exchange Clearing Corporation Limited (MCXCCL) on March 09, 2026, issued a notification regarding the Alternate Risk Management Framework (ARMF) for Near Zero and Negative Prices.
The following has been stated:
It has introduced an Alternate Risk Management Framework (ARMF) to address potential near zero or negative prices in commodities such as Crude Oil and Natural Gas. The framework will be activated if certain market triggers occur, such as a price fall of more than 50% within 20 trading days, international exchanges adopting negative price measures, or the introduction of near-zero or negative strike price options. For April 2026, ARMF will be triggered if prices fall below defined thresholds (₹1300 for Crude Oil and ₹158.50 for Natural Gas). When activated, the framework imposes minimum absolute margins per lot, sets threshold-based Extreme Loss Margins (ELM), withdraws spread margin benefits, and uses the Bachelier Model for options pricing. Additionally, extra margins may be levied based on price drops ranging from 50% to over 90%, with margin requirements increasing proportionally. MCXCCL may also impose further margins if required to manage market risk.
Please refer to the document attached below for more details.
[MCXCCL Circular No. MCXCCL/RISK/050/2026]
