The MCX Stock Exchange (MCX-SX) is set to launch operations in Diwali, according to exchange sources. MCX-SX is planning to offer competitive membership fees, which could trigger a price war causing the BSE and the NSE to revise their membership fee structure, say analysts.
Gearing up for their launch, the MCX-SX announced the beginning of its membership drive on Wednesday. The exchange will hold membership road-shows from September 10 across the country.
Fee Rs 25 lakh
The exchange’s introductory membership fee is Rs 25 lakh of net outlay for entry-level membership (includes admission fees and deposit). This offer is valid only till October 18, following which the total outlay for the MCX-SX membership would be Rs 50 lakh.
These competitive membership fees come at a time when the Indian equity markets are facing tough times and exchanges are struggling to grow revenues.
BSE fees are almost at par with the MCX-SX’s membership fee, while the NSE’s membership fees are slightly higher, say marketmen.
“MCX-SX has a tendency of going aggressive. Their membership fees are definitely reflecting the same. Their membership categories will help drive financial inclusion,” said Jagannadham Thunuguntla, Strategist & Head of Research, SMC Global Securities.
3 categories
The exchange is offering three categories of membership — composite, professionally qualified and rural entrepreneur. The second category is for members who have experience in the capital markets. Other professionals such as MBAs, lawyers, engineers, chartered accountants, doctors would also be eligible under this category
The ‘Rural Entrepreneur Membership’ category is for people living in sub-districts and taluks, where there is no capital market penetration.
Membership is being offered in the categories of Trading Member, Self-Clearing Member, Trading-cum-Clearing Member and Professional Clearing Member.
“We have implemented an integrated India model, which will foster balanced participation from foreign institutional investors, domestic financial institutions and new members from Tier-II and Tier-III centres. Our aim is to drive financial inclusion by optimising the cost structure of membership and innovating two unique categories for MCX-SX membership,” said Joseph Massey, MD & CEO of the MCX-SX.
After a legal tussle, the MCX-SX has recently received approval from the SEBI to launch its equity trading platform.