Description
It covers the history, achievements, brand values, branding, communications, promotions for MCX.
Market
Modern commerce has tapped into mechanisms that most people two decades ago could not have imagined. While most had understood that money made the world go around, it is only now that they are learning of new ways of not just making it but also the many ways of ensuring risks of losing it are hedged and minimised. Welcome to the world of Multi Commodity Exchange of India (MCX). MCX is marrying technology with transparency and enabling people at the bottom of the pyramid to benefit from globalisation. As a commodity exchange, MCX has enabled the market mechanisms of price discovery and price risk management in the commodity markets of India. Price discovery is a continual market process that determines the price of a commodity at any given time. This process is caused by the interplay between the market forces of demand and supply on MCX’s online, neutral and transparent platform. This ensures that prices are not influenced by vested interest groups. The price risk management tool, also known as ‘hedging’ enables sellers and buyers to trade specified quantities of a commodity at a specified price on a future date. MCX is thus facilitating in India, commodity trade mechanisms that apply to
the developed economies. In a period of just four years, the Multi Commodity Exchange of India Limited has become India’s number one commodity exchange and has remained the frontrunner among the 20+ regional and national-level commodity bourses in the country for two years in a row. During the period 1st April and 31st December 2007 it accounted for over 75% of the total value of commodity futures traded in the country. As at 30th June 2007, MCX had 1796 registered members and 7269 trading terminals across 384 locations in the country. The trading platform set up by it provides a high level of liquidity and participation from across India.
traded, it also has the distinction of ranking amongst the world’s top ten commodity exchanges, in terms of the number of contracts traded (Source: UNCTAD data for calendar year 2006). MCX is also the world’s first multi commodity exchange to win the dual certification of ISO/IEC 2001-2005 for information security and the ISO 9001:2000 for process quality. MCX is the world’s largest futures exchange in silver. It is a global second in the trading of natural gas futures. Currently it occupies the third spot in the global trade in gold and crude oil futures. MCX is also the world’s first commodity exchange to launch futures trading in steel, mentha oil and cashew. Within the Asia-Pacific region, MCX has pioneered futures trading in petrochemicals. Closer to home, MCX introduced crude oil and natural gas futures, commenced real-time internet trading in India, initiated evening trading sessions to coincide with trading sessions on international commodity exchanges, insured trade settlement with a settlement guarantee fund and launched COMDEX (India’s first Composite Commodity Futures Price Index). In January 2008, it became the first commodity exchange in Asia to launch trade in carbon credits. For the number of initiatives that it has taken and the high levels of transparency that it has maintained, recognition was not far in coming. In the less than five years since launch, MCX has already received several top honours: the eMpi – Indian Express Indian Innovation Award presented by Dr. A P J Abdul Kalam, former President of India, in December 2007; the Social and Corporate Governance Award presented by the Bombay Stock Exchange and the Nasscom Foundation; Best Innovative Exchange Award at the Global SMEs Summit; the Rotary International Corporate Social Responsibility Award for integrating rural India with global markets; Best Commodity Exchange Award presented by His Excellency Datuk Peter Chin Fah Kui, Minister of Plantation Industries and Commodities of Malaysia and the Number One Commodity Exchange of the Year awarded to it in 2006.
of the applicants was Financial Technologies (India) Limited. Financial Technologies was, and is, the market leader in technological solutions to financial markets across all asset-classes. The company was selected to set up a commodity exchange and MCX was born. On 26th September 2003, MCX gained permanent recognition from the union government to facilitate online trading, clearing and settlement operations for commodity futures markets across India. Over a period of time, some of India’s and the world’s leading institutions have shared the vision and taken a stake in MCX. These include State Bank of India and its associates, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India (NSE), SBI Life Insurance Company, Bank of India, Bank of Baroda, Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, ICICI Trusteeship Services, Fid Fund (Mauritius) – an affiliate of Fidelity International, ICICI Ventures, IL&FS, the Kotak Group, Citigroup, Merrill Lynch and NYSE Euronext (NYX) – arguably the world’s leading and most diverse financial market group. In its endeavour to maximise value and deepen its roots in specific commodity markets, MCX has entered into strategic alliances with a number of domestic entities such as Bombay Bullion Association, Bombay Metal Exchange, India Pepper & Spice Trade Association, Pulses’ Importers Association, Solvent Extractors’
History
On 1st April 2003, the union government issued a notification that removed existing regulatory barriers to trading in commodity futures. It invited applications for establishing national-level, electronic multi commodity exchanges. One
Achievements
In a short span of time, MCX has notched up a number of achievements – both at the domestic and international levels. Apart from being India’s biggest commodity exchange in terms of the value of futures
Association of India and The United Planter’s Association of Southern India. MCX has maximised its global reach through licensing agreements with commodity exchanges around the world. The agreement with the London Metal Exchange (LME), for instance, enables MCX to use LME prices as the basis for settling futures contracts. In 2006 MCX signed an agreement with Euronext.liffe to list domestic mini futures contracts of Robusta coffee and white sugar based on Euronext.liffe futures prices. MCX also has a palm oil derivative price licensing agreement with Bursa Malaysia. To spread awareness of commodity exchange benefits in India, MCX has devised a corporate social responsibility (CSR) programme that is integral to its core operations. As part of this programme, MCX has teamed up with the Department of Posts (India Post) to launch the Gramin Suvidha Kendra (GSK) in rural India. This has been specially structured to benefit farmers at the grass root level by empowering them with ruling commodity prices. Thanks to this initiative, farmers can now take well-informed decisions with respect to the choice of crops and the time to sell their produce. MCX has also joined hands with BSNL and MTNL to launch a service delivering real-time commodity futures and spot prices through SMS, and with Tata Teleservices through an interactive voice response system (IVRS). This initiative helps farmers in over 500,000 villages to gain access to future and spot prices of their produce. As part of its CSR activities, MCX also has tie-ups with educational and training institutions, philanthropic organisations, NGOs and farmer bodies to spread awareness and create a nationwide manpower pool to meet with the emerging needs of the commodity sector.
trading session which coincides with trading sessions of exchanges in other time zones. This gives Indian participants the advantage of responding to price volatility on international commodity exchanges. The Indian rupee denomination of all MCX contracts covers the currency risk inherent in internationally-referenced commodities; this means Indian traders using the MCX platform don’t need to hedge separately against foreign exchange risks.
Recent Developments
The reduction of green house gases has occupied the attention of the world in the last few decades. Carbon credits are an extension of this concern. By adopting clean development mechanisms India has emerged as a world leader in the reduction of these gases and has accumulated a large basket of carbon credits. In January 2008, MCX launched trade in them. NYSE Euronext (NYX), the world’s leading and most diverse financial market group has taken a 5% equity stake in MCX. This is a fine demonstration of quality that this institution has built over the last four years. MCX is also engaged in sharing its domain expertise with other exchanges in India and abroad. These exchanges include Safal National Exchange (India’s first exchange for horticultural and dairy produce), Indian Energy Exchange (India’s first power exchange), National Spot Exchange (India’s first exchange for the commodity spot market) and Dubai Gold and Commodities Exchange.
Promotion
Commodity futures trading is an emerging sector in India. As a leader in this category, MCX realises its responsibility. It has, therefore, taken upon itself the task of spreading awareness of this market. Several programmes across rural and urban India have been organised in conjunction with government and commodity trade bodies, farmer groups, educational institutes, philanthropic organisations and the Regulator. After four years of on-ground awareness efforts, MCX launched a nationwide advertising campaign across electronic and print media in 2008. The campaign focused on two distinct audiences: to the urban set the campaign talked of protecting commodity-dependent businesses against price volatilities; to the rural audience the campaign sought to explain that farmers could take informed decisions based on the price of their produce which were available at post offices, on television, mobile phones and newspapers.
As a market leader, MCX sees its role as simplifying an extremely sophisticated trade mechanism to one that can be understood by the layman. Its objective in doing this is to encourage enterprises and people in taking advantage of price discovery and hedging on a commodity exchange – mechanisms that lead to more robust bottom lines. At a broader level, MCX views all its communication as an effort to closing the wide economic disparities between rural and urban India. The MCX brand delivers on India’s longoverdue ambition of playing its rightful role in the global economic arena – especially in global commodity markets where the country is both a huge producer and consumer. As a flag-bearer of modern commerce mechanisms, MCX takes its role seriously. In it, the brand finds its raison d’être.
www.mcxindia.com
THINGS YOU DIDN’T KNOW ABOUT
Product
As a commodity exchange, MCX’s ‘products’ are commodity futures. Put simply these are standardised contracts for different commodities, which mature on a future date. MCX offers futures trading in 55 commodities, defined in terms of the type of contracts. These commodities can be broadly classified as: bullion, energy, petrochemicals, base metals, steel, edible oils and oilseeds, cereals, pulses, sugar, plantations, spices, fibres and carbon credits. A unique feature of MCX is its evening
MCX
MCX is India’s biggest commodity exchange with over 75% market share; it is also the country’s youngest In four years since inception MCX is already ranked amongst the world’s top ten commodity exchanges MCX is one of the few successful public-private and Indian-global partnerships NYSE Euronext (NYX), the world’s leading financial market group has taken a stake in MCX With 55 commodities, MCX has one of the world’s widest commodity baskets on offer The highest turnover recorded by MCX on a single day was Rs. 22,774.73 crore (US$ 5.69 billion) on 5th March 2008
Brand Values
As a child of India’s economic liberalisation, MCX’s brand values are rooted in responsible capitalism. The company believes that the Western capitalistic model cannot be simply transplanted in a country like India which has huge economic disparities. This explains why MCX equates corporate social responsibility with its core business. All MCX awareness campaigns are unique because they are designed to communicate and enhance generic information regarding modern market mechanisms.
doc_273505660.pdf
It covers the history, achievements, brand values, branding, communications, promotions for MCX.
Market
Modern commerce has tapped into mechanisms that most people two decades ago could not have imagined. While most had understood that money made the world go around, it is only now that they are learning of new ways of not just making it but also the many ways of ensuring risks of losing it are hedged and minimised. Welcome to the world of Multi Commodity Exchange of India (MCX). MCX is marrying technology with transparency and enabling people at the bottom of the pyramid to benefit from globalisation. As a commodity exchange, MCX has enabled the market mechanisms of price discovery and price risk management in the commodity markets of India. Price discovery is a continual market process that determines the price of a commodity at any given time. This process is caused by the interplay between the market forces of demand and supply on MCX’s online, neutral and transparent platform. This ensures that prices are not influenced by vested interest groups. The price risk management tool, also known as ‘hedging’ enables sellers and buyers to trade specified quantities of a commodity at a specified price on a future date. MCX is thus facilitating in India, commodity trade mechanisms that apply to
the developed economies. In a period of just four years, the Multi Commodity Exchange of India Limited has become India’s number one commodity exchange and has remained the frontrunner among the 20+ regional and national-level commodity bourses in the country for two years in a row. During the period 1st April and 31st December 2007 it accounted for over 75% of the total value of commodity futures traded in the country. As at 30th June 2007, MCX had 1796 registered members and 7269 trading terminals across 384 locations in the country. The trading platform set up by it provides a high level of liquidity and participation from across India.
traded, it also has the distinction of ranking amongst the world’s top ten commodity exchanges, in terms of the number of contracts traded (Source: UNCTAD data for calendar year 2006). MCX is also the world’s first multi commodity exchange to win the dual certification of ISO/IEC 2001-2005 for information security and the ISO 9001:2000 for process quality. MCX is the world’s largest futures exchange in silver. It is a global second in the trading of natural gas futures. Currently it occupies the third spot in the global trade in gold and crude oil futures. MCX is also the world’s first commodity exchange to launch futures trading in steel, mentha oil and cashew. Within the Asia-Pacific region, MCX has pioneered futures trading in petrochemicals. Closer to home, MCX introduced crude oil and natural gas futures, commenced real-time internet trading in India, initiated evening trading sessions to coincide with trading sessions on international commodity exchanges, insured trade settlement with a settlement guarantee fund and launched COMDEX (India’s first Composite Commodity Futures Price Index). In January 2008, it became the first commodity exchange in Asia to launch trade in carbon credits. For the number of initiatives that it has taken and the high levels of transparency that it has maintained, recognition was not far in coming. In the less than five years since launch, MCX has already received several top honours: the eMpi – Indian Express Indian Innovation Award presented by Dr. A P J Abdul Kalam, former President of India, in December 2007; the Social and Corporate Governance Award presented by the Bombay Stock Exchange and the Nasscom Foundation; Best Innovative Exchange Award at the Global SMEs Summit; the Rotary International Corporate Social Responsibility Award for integrating rural India with global markets; Best Commodity Exchange Award presented by His Excellency Datuk Peter Chin Fah Kui, Minister of Plantation Industries and Commodities of Malaysia and the Number One Commodity Exchange of the Year awarded to it in 2006.
of the applicants was Financial Technologies (India) Limited. Financial Technologies was, and is, the market leader in technological solutions to financial markets across all asset-classes. The company was selected to set up a commodity exchange and MCX was born. On 26th September 2003, MCX gained permanent recognition from the union government to facilitate online trading, clearing and settlement operations for commodity futures markets across India. Over a period of time, some of India’s and the world’s leading institutions have shared the vision and taken a stake in MCX. These include State Bank of India and its associates, National Bank for Agriculture and Rural Development (NABARD), National Stock Exchange of India (NSE), SBI Life Insurance Company, Bank of India, Bank of Baroda, Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, ICICI Trusteeship Services, Fid Fund (Mauritius) – an affiliate of Fidelity International, ICICI Ventures, IL&FS, the Kotak Group, Citigroup, Merrill Lynch and NYSE Euronext (NYX) – arguably the world’s leading and most diverse financial market group. In its endeavour to maximise value and deepen its roots in specific commodity markets, MCX has entered into strategic alliances with a number of domestic entities such as Bombay Bullion Association, Bombay Metal Exchange, India Pepper & Spice Trade Association, Pulses’ Importers Association, Solvent Extractors’
History
On 1st April 2003, the union government issued a notification that removed existing regulatory barriers to trading in commodity futures. It invited applications for establishing national-level, electronic multi commodity exchanges. One
Achievements
In a short span of time, MCX has notched up a number of achievements – both at the domestic and international levels. Apart from being India’s biggest commodity exchange in terms of the value of futures
Association of India and The United Planter’s Association of Southern India. MCX has maximised its global reach through licensing agreements with commodity exchanges around the world. The agreement with the London Metal Exchange (LME), for instance, enables MCX to use LME prices as the basis for settling futures contracts. In 2006 MCX signed an agreement with Euronext.liffe to list domestic mini futures contracts of Robusta coffee and white sugar based on Euronext.liffe futures prices. MCX also has a palm oil derivative price licensing agreement with Bursa Malaysia. To spread awareness of commodity exchange benefits in India, MCX has devised a corporate social responsibility (CSR) programme that is integral to its core operations. As part of this programme, MCX has teamed up with the Department of Posts (India Post) to launch the Gramin Suvidha Kendra (GSK) in rural India. This has been specially structured to benefit farmers at the grass root level by empowering them with ruling commodity prices. Thanks to this initiative, farmers can now take well-informed decisions with respect to the choice of crops and the time to sell their produce. MCX has also joined hands with BSNL and MTNL to launch a service delivering real-time commodity futures and spot prices through SMS, and with Tata Teleservices through an interactive voice response system (IVRS). This initiative helps farmers in over 500,000 villages to gain access to future and spot prices of their produce. As part of its CSR activities, MCX also has tie-ups with educational and training institutions, philanthropic organisations, NGOs and farmer bodies to spread awareness and create a nationwide manpower pool to meet with the emerging needs of the commodity sector.
trading session which coincides with trading sessions of exchanges in other time zones. This gives Indian participants the advantage of responding to price volatility on international commodity exchanges. The Indian rupee denomination of all MCX contracts covers the currency risk inherent in internationally-referenced commodities; this means Indian traders using the MCX platform don’t need to hedge separately against foreign exchange risks.
Recent Developments
The reduction of green house gases has occupied the attention of the world in the last few decades. Carbon credits are an extension of this concern. By adopting clean development mechanisms India has emerged as a world leader in the reduction of these gases and has accumulated a large basket of carbon credits. In January 2008, MCX launched trade in them. NYSE Euronext (NYX), the world’s leading and most diverse financial market group has taken a 5% equity stake in MCX. This is a fine demonstration of quality that this institution has built over the last four years. MCX is also engaged in sharing its domain expertise with other exchanges in India and abroad. These exchanges include Safal National Exchange (India’s first exchange for horticultural and dairy produce), Indian Energy Exchange (India’s first power exchange), National Spot Exchange (India’s first exchange for the commodity spot market) and Dubai Gold and Commodities Exchange.
Promotion
Commodity futures trading is an emerging sector in India. As a leader in this category, MCX realises its responsibility. It has, therefore, taken upon itself the task of spreading awareness of this market. Several programmes across rural and urban India have been organised in conjunction with government and commodity trade bodies, farmer groups, educational institutes, philanthropic organisations and the Regulator. After four years of on-ground awareness efforts, MCX launched a nationwide advertising campaign across electronic and print media in 2008. The campaign focused on two distinct audiences: to the urban set the campaign talked of protecting commodity-dependent businesses against price volatilities; to the rural audience the campaign sought to explain that farmers could take informed decisions based on the price of their produce which were available at post offices, on television, mobile phones and newspapers.
As a market leader, MCX sees its role as simplifying an extremely sophisticated trade mechanism to one that can be understood by the layman. Its objective in doing this is to encourage enterprises and people in taking advantage of price discovery and hedging on a commodity exchange – mechanisms that lead to more robust bottom lines. At a broader level, MCX views all its communication as an effort to closing the wide economic disparities between rural and urban India. The MCX brand delivers on India’s longoverdue ambition of playing its rightful role in the global economic arena – especially in global commodity markets where the country is both a huge producer and consumer. As a flag-bearer of modern commerce mechanisms, MCX takes its role seriously. In it, the brand finds its raison d’être.
www.mcxindia.com
THINGS YOU DIDN’T KNOW ABOUT
Product
As a commodity exchange, MCX’s ‘products’ are commodity futures. Put simply these are standardised contracts for different commodities, which mature on a future date. MCX offers futures trading in 55 commodities, defined in terms of the type of contracts. These commodities can be broadly classified as: bullion, energy, petrochemicals, base metals, steel, edible oils and oilseeds, cereals, pulses, sugar, plantations, spices, fibres and carbon credits. A unique feature of MCX is its evening
MCX
MCX is India’s biggest commodity exchange with over 75% market share; it is also the country’s youngest In four years since inception MCX is already ranked amongst the world’s top ten commodity exchanges MCX is one of the few successful public-private and Indian-global partnerships NYSE Euronext (NYX), the world’s leading financial market group has taken a stake in MCX With 55 commodities, MCX has one of the world’s widest commodity baskets on offer The highest turnover recorded by MCX on a single day was Rs. 22,774.73 crore (US$ 5.69 billion) on 5th March 2008
Brand Values
As a child of India’s economic liberalisation, MCX’s brand values are rooted in responsible capitalism. The company believes that the Western capitalistic model cannot be simply transplanted in a country like India which has huge economic disparities. This explains why MCX equates corporate social responsibility with its core business. All MCX awareness campaigns are unique because they are designed to communicate and enhance generic information regarding modern market mechanisms.
doc_273505660.pdf