Circular No: - NMCE/2011-12/0105 Date: - 6-Feb-2012
To,
The Members,
In pursuance to the directions issued by the Forward Markets Commission (FMC) vide its letter No. FMC/4/2012/C/14 No.1/2/2012/IR-I/Client-Protect dated 2nd February, 2012 and in terms of the Bye- Laws, Rules, Regulations and circular(s) of the Exchange, the members are hereby notified as under:
1. The members of the Exchange would settle accounts of their clients every quarter subject to the condition that, for the clients having open position on such quarterly settlement date, the member may retain the requisite funds to meet the maximum likely margin obligations for the next 3 trading days. The retention of adequate margins would ensure that the clients do not get into a square off mode unnecessarily due to such quarterly settlement.
2. While settling the account, the Member shall send to the client a ‘statement of accounts’ containing an extract from the client ledger of funds for the relevant quarter. The statement shall also explain the retention of funds, if any.
3. Such periodic settlement of account may not be necessary for collaterals / margin in the form of bank guarantees (BG) / Fixed Deposit receipts (FDR) / other collaterals received from the clients.
4. There shall be no inter-client adjustments like any inter-family / group company / related accounts for the purpose of settlement of the client account.
5. The time difference between two settlements should not be more than 90 days.
6. Every case of non-settlement of client account on quarterly basis shall attract a penalty of Rs.5000/- and non-compliance of these directions will be viewed seriously The members may please note, that the above directives shall be effective from 1st April, 2012.
Members are requested to take note of the above.
For and on behalf of
National Multi-Commodity Exchange of India Limited
Dinesh Shukla
Vice President (Market Watch & Surveillance)
