Anil Singhvi backs MCX on crude oil settlement decision, says it is in sync with rule book

Zee Business Managing Editor Anil Singhvi has backed Multi Commodity Exchange (MCX) decision on the crude oil settlement price saying that it is customary and in sync with the rule book. Singhvi said that it is in the exchange rules that intraday crude oil settlement price is the closing price of the WTI Crude Oil which closes at 11:30 PM in the US markets. Since, due to the Coronavirus lockdown, commodity trading at MCX is getting closed in India at 5:30 PM, the oil price deviation taking place at WTI Crude was not expected to go down below $0 per barrel. So, it's duty of the traders to deposit the balance margin money into their trading account and help brokers to come out of this precarious situation.

In his Editor's Take on the recent MCX crude oil price settlement decision, Singhvi said, "Brokers are complaining against the exchange but they should know that exchange's decision is in sync with the rule book. They have taken a decision which is as per the rule because it's a well known fact that in India, intraday crude oil price settlement price is 11:30 PM WTI crude oil price." Singhvi said that since no one had imagined that WTI crude oil price would hit below $0 per barrel, this situation has come.

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In his suggestion for both brokers and traders, Singhvi said, "Since, the exchange has changed trading times at commodity exchanges due to the Coronavirus spread, it's the responsibility of the traders to submit the balance of margin money required in their trading account." 

Singhvi also suggested the broking firms to persuade their traders rather than blaming the exchange for their condition. 

See Zee Business tweet below:

क्रूड के सेटलमेंट प्राइस पर एक्सचेंज का फैसला गलत नहीं...
अनिल सिंघवी ने कहा- नियमों के हिसाब से लिया फैसला...
कुछ और फैसला लेने पर होती ज्यादा दिक्कतें...#EditorsTake #CrudeMeltdown #OilCrash @MCXIndialtd @BSEIndia @NSEIndia @ashishchauhan @AnilSinghvi_ pic.twitter.com/ah6isMmipe

— Zee Business (@ZeeBusiness) April 22, 2020

Singhvi said that whatever decision exchange would have taken, someone would have ended unhappy as their are various stake-holders involved. He lauded the exchange for following the rule book and taking a decision which is most acceptable. He also advised both brokers and traders to co-operate with the exchange. They should know that their loss is due to the WTI Crude oil price slump and not due to the exchange.