MCX cuts transaction charges to push up volumes

MUMBAI Wed Feb 26, 2014 6:02pm IST

Gold necklaces are displayed at a showroom in Srinagar June 2, 2008. REUTERS/Fayaz Kabli /Files

Gold necklaces are displayed at a showroom in Srinagar June 2, 2008.

Credit: Reuters/Fayaz Kabli /Files

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MUMBAI (Reuters) - The Multi Commodity Exchange (MCX) (MCEI.NS), India's biggest exchange in terms of volumes, has cut transaction charges on futures contracts of all commodities effective Wednesday, in a bid to push up battered volumes.

Volumes at the MCX fell 39 percent to 76 trillion rupees in the first ten months of the fiscal year beginning April 2013, as investors lost confidence in the exchange after a payment crisis at its spot exchange and restrictions on import of gold, triggering calls among industry participants to revive sentiment.

Transaction charges in precious and base metals and energy contracts have been cut to 2.10 rupees from the earlier 2.5 rupees for every 100,000 rupees of turnover for members generating an average daily turnover of up to 3.5 billion rupees, and 1.40 rupees per 100,000 rupees on incremental turnover above 3.5 billion rupees, the company said in a statement.

"Cost of transaction will come down for day traders, so it is a good move. This will help in day traders making multiple and frequent transactions," said Harish Galipelli, vice-president research with Inditrade Derivatives and Commodities.

The bourse has also slashed transaction cost on agricultural commodities by 70 percent.

For agri-commodity contracts, MCX said it has reduced the fee to 0.75 rupee for every 100,000 rupees of turnover for members generating monthly average daily turnover volume of up to 200 million rupees, and 0.50 rupee per 100,000 rupees on incremental turnover above 200 million rupees.

(Reporting by Siddesh Mayenkar; Editing by Sunil Nair)

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