NCDEX Introduces Risk Management Fee on Fresh Open Interest

NCDEX, India’s leading commodity derivatives exchange, has decided to introduce one time risk management fee on every overnight fresh open position created on the Exchange platform. The levy Rs. 5 per lakh on incremental open position will be applicable from 15^th October, 2014 onwards. However the Exchange has decided to levy risk management fee only on commodities categorized in list “A” group.

Group “A” comprise of commodities such as Soya oil, R M seed, Castor seed, Chana, Guar, Kapas, spices, etc. The Exchange currently does not levy any risk management fee although the Exchange incurs substantial amount of expenditure to maintain necessary infrastructure and process for the clients keeping open positions end of the day.

Speaking on the move, Mr. Samir Shah, MD & CEO, NCDEX said “Every client has different interest of trade or investment in commodity market. We have tried to levy risk management fee only on the group where the Exchange has to put more efforts and has to incur more expenditure to facilitate risk management service. This fee will help the Exchange to provide better services to clients.”

The fresh open position value will be computed daily based on contract wise incremental open positions and will be collected as Exchange dues. However this fee will not applicable on intraday transactions in both “A” and “B” group as well as all transactions in “B” group commodities.

ABOUT NCDEX:

As India’s leading online exchange, NCDEX is where customers repose trust. It offers the widest range of benchmark products across agriculture, metals and precious metals. NCDEX brings buyers and sellers together through its electronic trading platform. With a widely held shareholding, it enjoys the distinction of being the only exchange in the country promoted by national-level institutions. The institutional promoters and shareholders of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nation-wide reach, technology and risk management skills.

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