CME clarifies: lowers margin, ICE follows suit

On Friday, the CME which is the key market for commodities futures and options had announced initial and maintenance margin will not be different, leading the market observors to believe that maintenance margins are being raised.    

However, On Saturday, CME has issued a statement that this was not so. It apologised for the confusion its previous advisory caused. Here is CME's statement:

 

CME Group today is clarifying its notice to clearing firms regarding margins. In light of the issues customers transferring out of MF Global are facing, while still maintaining appropriate risk management protections for the market, CME Clearing is setting the "initial" margin upcharge at zero. This upcharge is normally applied to customer accounts when they are receiving a margin call.

The intent and effect of these changes is to decrease the size of any margin calls resulting from the bulk transfer of MF Global customers to new clearing members, not to increase them.

Yesterday, CME Group successfully transferred MF Global customer positions to a new clearing member with part, but not all, of their funds, as approved by the bankruptcy trustee and the court. By reducing the initial margin “ratio” to 1.00, we ensure that margin calls that are issued to these transferred MF Global customers will be limited to bringing their accounts into compliance with the lower, “maintenance” margin levels. Maintenance margins are set to provide appropriate risk management coverage. Initial margins are set to provide an additional buffer against future losses in the account.

This is a short term accommodation to maintain market integrity and provide temporary relief to customers whose accounts have been disrupted by this event. We apologize for any confusion our initial advisory may have caused.

 

Soon after another major exchange ICE, lowered inital margins, to facilitate the onboarding of MF Global clients.  

 

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Jaguar Land Rover launches Range Rover Evoque in India

Prices for the all new Range Rover Evoque start at Rs44.75 lakh

The all new Range Rover Evoque has reached India and will be launched from the Jaguar Land Rover corporate showroom in Mumbai.

In India, the Evoque will be available in both 5 door and Coupe body styles. The Coupe is available in a petrol variant and the 5 door version in diesel. The Range Rover Evoque (5 door) is available in three distinct derivatives-Pure, Prestige and Dynamic and the Coupe is available in the Dynamic form.

The Range Rover Evoque is packed with technological and practical features as standard, including the 8” inch high resolution Touch Screen, Bluetooth connectivity with audio streaming, 11 speaker Meridian Audio Sound system, cruise control, Terrain Response, interior mood lighting, steering wheel paddle shifters and full-size panoramic glass sunroof.

In addition to Mumbai the 'Evoque Experience' will travel to a number of major cities throughout November and December. Prices for the all new Range Rover Evoque start at Rs44.75 lakh (ex-showroom price in Mumbai, pre- Octroi).

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Pak backtracks on MFN; says status not granted to India

“The Cabinet has only given its in-principle approval to move forward on the issue (of MFN)... “We will give it the go-ahead if the situation is quite favourable and in the national interest. Otherwise, proceedings on it would be withheld,” Pakistan prime minister Yousuf Raza Gilani informed the media

Islamabad: Backtracking on granting the Most Favoured Nation (MFN) status to India, Pakistan prime minister Yousuf Raza Gilani has said the commerce ministry has only been tasked by the Cabinet to move forward on the issue in bilateral trade negotiations, reports PTI.

His statement came three days after Pakistan information minister Firdous Awan announced following a Cabinet meeting that it has been decided ‘unanimously’ to grant MFN status to India. Pakistan had been dilly-dallying on the issue since 1996 when India granted it the MFN status.

Since the Wednesday announcement of Ms Awan, right-wing extremists in Pakistan and business lobbies in the country’s crucial Punjab province have been vehemently opposing the decision. The business lobbies dealing with engineering and pharmaceutical products are of the view that granting of MFN status to India would be detrimental to their business interests.

“The Cabinet has only given its in-principle approval to move forward on the issue (of MFN) and permitted the ministry of commerce, which is actively engaged in trade talks with New Delhi, to negotiate with it trade-related issues,” Mr Gilani told reporters at his residence in Lahore.

“We will give it the go-ahead if the situation is quite favourable and in the national interest. Otherwise, proceedings on it would be withheld,” the premier was quoted as saying by the media.

Mr Gilani’s remarks came even as his Indian counterpart Manmohan Singh welcomed Pakistan’s decision to grant MFN status to India but said it should have been done long ago.

With contradictory statements coming from Pakistan, its high commissioner to New Delhi Shahid Malik Friday denied that Islamabad had taken a U-turn on granting the MFN status to India. “Let me correct you, there is no question of U-turn about it.”

After the information minister’s announcement on Wednesday, the Pakistan Foreign Office clarified that the Cabinet had only taken an in-principle decision on the issue and both countries would have to work towards the goal in further engagements.

The issue of normalising trade ties also figured in foreign minister Hina Rabbani Khar’s consultations Friday with top military officials, including ISI chief Lt Gen Ahmed Shuja Pasha.

Mr Gilani said the commerce ministry would have to make important decisions independently in bargaining with India over trade policy and hence it had sought the Cabinet’s go-ahead.

He contended the Cabinet did not have to refer decisions made on the MFN issue to Parliament.

“We can brief Parliament over the Cabinet’s decision of going ahead with MFN, but according to my point of view it is not necessary. Only Cabinet approval is necessary to negotiate with other countries,” he said.

Parliament would be briefed at an ‘appropriate time’, he added.

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