subject: Largest Online Commodity Exchange In Nepal [print this page] MEX is the only Exchange in Nepal to have such support from the commodity relevant institutions. These institutions are represented on the various committees set up by the Exchange to ensure good corporate governance.
Some of them have also lent their personnel to provide technical support to the Exchange management. The day-to-day operations of the Exchange are managed by the experienced and qualified professionals with impeccable integrity and expertise. None of them have any trading interest. The structure of MEX is impossible to replicate in Nepal.
Trading Markets:
MEX operates at commodity futures markets and commodity CFDs. Contracts in Futures Markets and commodity CFDs results mostly in Cash Settlement and do not's frequently result in delivery.
The Futures Market is primarily intended for Hedging and Speculation. Contracts in Futures Market results mostly in Cash Settlement and do not frequently result in delivery. The Clearing House arranges guarantee of trades executed on the exchange.
Types of Members:
MEX has two types of exchange members. The Clearing Member (CM) is the one who clears all his/her trades with the Exchange. The Non-Clearing Member acts like an intermediary between the CM and Clients. The CM also a right to clear the transactions in contracts executed in MEX either on its own behalf or on behalf of other NCMs. CMs will be responsible to MEX for all the obligations (margins, settlement obligations etc) of NCMs.
Delivery Mechanism:
The Delivery period at MEX is last 5 days of the contract expiry month. After schedule for expiry of contract, members can either square up their position or give delivery to settle their outstanding contracts. Detail delivery provision and its manual shall be prepared by Clearing Member, and shall be forwarded to MEX.
Benefits of MEX:
There is a need to move agriculture to a market system of economy. This requires agriculture to be organized just like the industrial and service sectors of Nepalese economy. In addition, flow of corporate and institutional investment in the sector at present is negligible. The need to facilitate the flow of easy credit to the farmers as a priority...
Functions:
Mechanism of effective price discovery.
Mechanism of Price Risk Management.
Technology Backed Marketplace for Investment.
Facilitation of Physical trade with quality assurance.
Mechanism for structured Finance.
Dedication to Market Development.
Possible benefits:
More efficient and effective price formation mechanism.
Reliable and effective transfer of price risk.
Development and improvement of investment environment.
Reliable, accurate and transparent reference prices.
Development of new era for Nepalese Banking sectors for effective and secure scope of lending as structured finance.
Education and capacity building to growers, investors and hedgers.
More market information on demand and supply pattern.
Spot market develops with effective and reliable price sources.
Domestic products may enter in global trading phase.
Quality, grading and logistic improvement.
With price transparency and demand supply pattern possibility for industrial development.
by: Ann Mathew
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