MCX at fifth spot among world’s top commexes

MCX has replaced China-based Dalian Commodity Futures Exchange at the fifth position

India’s leading commodity bourse, the Multi Commodity Exchange Ltd (MCX), has become the world’s fifth-largest commodity futures exchange in terms of the number of contracts.

In a statement issued on Tuesday, MCX said it had become the world’s fifth-largest in terms of number of futures contracts traded during January to June 2011, based on the Futures Industry Association (FIA) volume survey and market data.

MCX has replaced China-based Dalian Commodity Futures Exchange at the fifth position, after occupying the sixth slot among global commodity futures exchanges for two years since 2009.

At that time, it had replaced the UK-based London Metal Exchange at the sixth position. MCX’s managing director Lamon Rutten said: “We owe this success to our members, shareholders and the commodity market ecosystem participants. We are committed to make MCX the best commodity exchange in the world.”
The data for the January-June period showed that the global commodity derivatives market had grown by 10.2%, based on the number of contracts.

Precious metals and energy contributed 49.8% and 16%, respectively.
The Asia-Pacific region contributed 39.6% of the total volume in terms of the number of contracts traded on the exchange. Mumbai-based MCX is a demutualised nation-wide electronic futures exchange and the various commodities traded on its platform include bullion, energy, metals and agricultural commodities.


New Lokpal Bill to be introduced in Lok Sabha on Thursday

Finance minister Pranab Mukherjee conveyed to the BJP that the Lokpal Bill passed by the Cabinet on Tuesday night can be circulated to MPs only on Wednesday evening. He also said that the existing Lokpal Bill—introduced in the Monsoon Session of Parliament—will be withdrawn in Lok Sabha on Thursday and the new Bill introduced

New Delhi: A new Lokpal (Ombudsman) Bill will be introduced in the Lok Sabha on Thursday and the existing one withdrawn, reports PTI.

This was conveyed by the government to main opposition Bharatiya Janata Party (BJP) on Wednesday along with the intention to have a three-day additional sitting of Parliament from 27th December to take up this crucial Bill. BJP gave its nod to this proposal.

Finance minister Pranab Mukherjee held a meeting on Wednesday with leader of opposition in Lok Sabha Sushma Swaraj, her counterpart in Rajya Sabha (upper house of the Parliament) Arun Jaitley and BJP leader LK Advani to discuss the issue.

Mr Mukherjee conveyed to the BJP that the Lokpal Bill passed by the Cabinet on Tuesday night can be circulated to MPs only on Wednesday evening, according to sources. He also said that the existing Lokpal Bill—introduced in the Monsoon Session of Parliament—will be withdrawn in Lok Sabha on Thursday and the new Bill introduced.

Mr Mukherjee said that in this scenario, there was little option but to extend the Winter Session by three more days and discuss the Lokpal Bill from 27th to 29th December.

The BJP agreed to the proposal after initial reluctance. Party sources said its opposition is to the content of the Bill rather than extension of this session.

The Business Advisory Committee (BAC) will meet this evening to decide on the extension.

The government is keen to ensure passage of Lokpal along with two crucial legislations—Judicial Accountability Bill and Whistleblower Protection Bill—during the current session.

But since only two days are left, it wants additional sitting after the Christmas break.

The BAC had on Tuesday decided to hold an additional three day sitting from 27th December but later several MPs opposed it, prompting the government to say it will have a rethink.

Several MPs, including some from the UPA coalition, are still opposed to the three-day extension of the session.

Lokpal Bill was cleared on Tuesday night by the Union Cabinet. The new Bill will be a Constitution amendment Bill which will also bring the prime minister under the ambit of Lokpal with certain riders.

The Bill, however, keeps India’s investigation agency Central Bureau of Investigation (CBI) out of purview of Lokpal except on cases which are referred to it by the latter. The Lokpal will have its own wings for preliminary inquiries and prosecution.

The Lokpal will be a nine-member body including the chairperson.


Want to buy a mutual fund? Pass a test!

Investors in Singapore must possess certain knowledge and qualifications if they want to purchase a mutual fund or similar products

In what could be a first of its kind, in Singapore, if anyone wants to buy a mutual fund (or any “Specified Investment Product”) directly, the person must be ‘qualified’ to do so. In other words, he/she must pass a test. And, no, they aren’t referring to financial intermediaries but ordinary investors, like you, who want to invest in the market.
The Monetary Authority of Singapore’s website clearly states that:

“...from 1 January 2012 onwards, financial institutions that act as intermediaries for these products will be required to assess whether a retail customer has the relevant knowledge or experience to understand the risks and features of a Specified Investment Product before offering the product to them. Intermediaries include financial institutions such as broking firms, banks, insurers and financial advisers.”

In other words, before taking a potential customer as a client, the financial intermediary must ‘assess’ the customer’s knowledge to check whether the same person is ‘fit’ enough to purchase the product.


“If the intermediary assesses that you do not have the relevant knowledge or experience to purchase the unlisted Specified Investment Product or to open an account to trade listed Specified Investment Products, they may suggest that you undergo learning modules to learn more about Specified Investment Products.”

 “The intermediary will consider whether you have the relevant educational qualifications, work experience or investment experience in that product or similar products. They will also take into account whether you have demonstrated sufficient understanding of the product.”

This means that if the customer is not ‘qualified’ or ‘educated’, then he/she must undergo learning modules as specified by MAS. Whether the investor is ‘qualified” or ‘educated’ is highly subjective to the financial intermediary’s observation. The assessment of the same level of ‘knowledge’ may differ from one intermediary to another.

This move certainly safeguards investors, and perhaps, forcing them to educate themselves the nuances of finance and thereby increasing financial literacy levels. However, it is also a double-edged sword and there could be a negative ramification of this move.

Firstly, it increases the costs, both explicit and implicit, on both the investor and the financial intermediary. For instance, it would take up lot of time and expenses to just merely assess the ‘quality’ of a customer. Not only would the monetary cost of acquiring a specified product, such as mutual funds, increase, but also the hassle of obtaining one which would push the large populace away from investing in general.

Secondly, a lot of investors might just dabble in products that aren’t mentioned in the “Specified Investment Product” list. For instance equities, which is inherently riskier than mutual funds, is not mentioned in the “Specified Investment Product” list. This might make the system inherently more volatile rather than the other way round. If investors want to diversify their holdings, there ought to be easy to do it.

It is widely known that Singapore takes its investor protection and safety seriously—even though the regulators were behind the curve in assessing the safety of Lehman-linked bonds in 2008. In India, the Securities and Exchange Board of India (SEBI) has taken a supposedly pro-investor stance since August 2009 by banning upfront commissions for selling mutual funds and is now insisting that fund companies monitor their distributors so that they choose be either a simple distributor of financial products (sell whatever customers want) or advisors (sell what customers really need). And now, shortly regulations covering advisors would be issued. In India at least, investors have been let alone but who can say if India will import the bright idea from Singapore of putting investors through a test and killing the mutual fund market completely?



Vinay Joshi

5 years ago


Ok! all said & done fine!

Who will stop the speculator?

No scrutiny of his means & ways!

CNBC Chanel airs eligibility - not necessarily finance instruments but 'no means & ways' strike down.

What happened to UTI? When the word 'mutual fund' was not known it was commanding 64KCr.!

Ten years earlier MF in S'pore was giving returns, five years down probs & the aspect now is MF/ETF? Now SGX is performing better & only those MF's who had invested in pure stocks are!

HOWSOEVER, WHAT IS DESIRED IN INDIA IS A LAW AGAINST MIS-SELLING FINANCIAL PRODUCTS! Keeping in view the literacy rate not that literate do not fall for it.

Certain consumer courts decisions are against mis-selling!


R Balakrishnan

5 years ago

This is delightful. Everyone except those who manage the money should pass some exam. In India, the least that can be done is to make investors pass an exam if they want to redeem. For investment, no exam is required. This will help the industry grow

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