MCX permits change of membership class

The move is aimed at facilitating clearing members to save fees and other expenses

Following a directive from markets regulator Securities and Exchange Board of indai (Sebi), commodities exchange MCX has allowed its members to upgrade or downgrade their type/class of membership.

It has also increased subscription fees for members to Rs 30,000, effective April 2016.

The change of class rule means trading-cum-clearing members can now remain only trading member or one of the other three types of members. However while upgrading class, members have to pay additional admission fees but while downgrading it, if they had paid any fees than they will have to forgo that, said a circular issued by the MCX.

However, for conversion from trading-cum-clearing member to trading member only status, a no-refundable processing fee of Rs 1 lakh will be charged.

Further, the exchange has said that all institutional and professional clearing members have to provide Rs 50,000 cash deposit for each of their affiliates. These type of members will have facilitate recovery of penalties imposed on trading members and they will be liable to pay the penalties of trading members to the extent of their security/deposits of their affiliate members.

Corporate members will also now have to show net worth of at least Rs 25 lakh while for others it has been kept at Rs 10 lakh.

Meanwhile, Sebi also issued a circular asking commodity exchanges to have proper investor grievance mechanism and arbitration mechanism.