MCX SX revises Liquidity Enhancement Scheme

Changes will affect incentives for trading on its equity derivatives segment

The newest kid on the stock exchange block is tweaking its Liquidity Enhancement Scheme, an incentive system to get people to trade on its exchange platform.

The changes will affect the incentives for trading on its equity derivatives segment as well as a seperate additional incentives structure in place for both the the cash and derivative market, according to a circular on the exchange website.

Under the revised circular, the exchange will provide incentives for market making in futures contracts of 51 stocks. It will also provide an incentive for non-market makers who trade in futures and options on all stocks.

MCX-SX currently offers trading in 1116 companies under the ‘Permitted to Trade’ category, which means that securities on these companies are traded on the exchange though the company might not be listed on it.

A seperate additional incentive structure will include client-based incentives of an entitlement to to Rs. 100 per day subject to a maximum ceiling of Rs. 50 lakhs per month. However, this is only applicable for clients  who have a minimum turnover of Rs. 11 Lakhs in cash equity and a minimum turnover of Rs. 1 Crore in stocks futures during a month, with at least one trade daily in equity cash or stock futures during the month.

The circular also includes incentives  for proprietary trading, jobbing and arbitrage activities.

The new circular comes into effect from April 18th.