Business Proposal for NCMs

8/3/2019 Business Proposal for NCMs

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Dear Valued Member

We would like to invite you join a new chapter in the commoditiesexchange market in Nepal. Commodities Futures Exchange will belaunching this month and we would like to extend an invitation toyour company to join us in this exciting future.

We have established CFX Ltd. to address this market in a positiveway that will be beneficial for the long-term growth of this industry.We are pleased to offer some groundbreaking new initiatives thatare unparalleled in this industry.

Please consider this a formal proposal from us to initiate amembership that will yield success to you, your clients and to CFX.

Thanking you,

Commodity Futures Exchange Ltd

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ABOUT US

Commodity Futures Exchange (CFX) is a futures-based commodity exchangeestablished in June 2011 under Company Act 2003 of the Government of

Nepal. CFX has been organized under relevant rules and regulations. Wehave committed ourselves to an open futures market and the construction ofa harmonious market environment. CFX adheres to the guidelines of"legislation, supervision, self-regulation and standardization. We endeavorto become a transparent and product-inclusive futures exchange thatfocuses on the metals, energy and agricultural products. CFX will establish asecure, orderly, efficient market mechanism and an open, fair, and equitableenvironment.

Derivatives

A derivative is a financial instrument whose value is derived from the price ofa more basic asset called the underlying asset. Underlying asset can besecurities, commodities, bullion, and currency, livestock or anything else.Derivatives are commonly exercised as an instrument to hedge risk, but canalso be used for speculation purposes.

Commodity Exchange

Commodity exchange refers to the physical center where variouscommodities and derivative products are traded. It is a platform wherestandardized, graded products are bought and sold.The majority of trading is

done in futures contracts, that is, agreements to deliver goods at a set timein the future for a price established at the time of the agreement. Futurestrading allow both hedging to protect against serious losses in a decliningmarket and speculation for gain in a rising market.Spot contracts, anotherform of trading, call for immediate delivery of a specified commodity and areoften used to obtain the goods necessary to fulfill a futures contract.

Clearing Members (CM)

A Clearing member is an independent entity, which under the watchful eyesof the exchange holds responsibility for setting trading accounts, learningtrades, collecting and maintaining margin monies, regulating delivery and

reporting trading data. CFXs learning members are economically well-managed closely monitored and carefully selected companies.

Non-Clearing Members (NCM)

Non-Clearing Members are professionals who facilitate clients for trading. Itis a part of an exchange, but does not possess the ability to settle or clear

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transactions. NCMs are paid a fee or commission for drawing up contractsand for effective sales.

Client(s) / Trader(s) / Investor (s)

Clients are the end users who buy and sell futures contracts on theexchange. There are no limitations on becoming a trader. Anyone is eligibleto trade after completing legal formalities of the exchange through the NCM.Clients having prior knowledge on the c commodities market can tradethrough our user-friendly platform

Benefits of Trading with CFX

1. Robust, fully-validated software platform that focuses on the end userneeds

2. Professional and dedicated team of experts3. Transparent price discovery mechanism with pricing that mirrors global

prices for all relevant commodities4. Trading opens when the markets all around the world are open to

guarantee unsuspecting price drops.5. Relevant pricing scheme to match the prices of the local Nepalese

market

6. Spreads based international commodities and local market forces7. Floating profit for all contracts8. Only exchange to provide Gold Delivery for all expiring gold contracts

based on prevailing laws

Software

We are using a fully customized version of Vertex 9.3 that has been catered

to meet the requirements of our clients. They offer features that are unseen

the software platforms unavailable in Nepal today.

Some of these features are built in towards catering towards risk

management for our clients. These features are focusing towards stop-losses

and other trading options. Our software features are listed below:

1. Fully integrated stop/loss and risk management features with one-click2. User friendly software with real time reporting capabilities

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3. Capable of making trading statements real-time to see net profit/ lossof client

4. Technical analysis looking at relevant historical data5. Screen can be customized to clients individual needs

What separates us?

We will be offering physical gold delivery to the client(s)

50% floating profit to the customers based on daily trades

Providing 3.5 % bank interest to the NCM (Non-Clearing Members)fromclients segregate account

Minimum initial margin for trading

Spread based on global market and

User friendly and globally recognized standard trading platform.

Products and Services

CFX is providing reliable and secure trading platform in futures market. Easyto use trading platform provides real time order booking and riskmanagement. It has globally recognized standard commodities for trading.As pioneer, first time in Nepal, we are providing Physical Gold Delivery inthe commodity futures market. Currently, we provides trading platform onmetal and energy products. The other products that are in the pipeline of our

company are listed below:Metals

- Gold

- Silver

- Copper

Energy

- Crude Oil

- Natural Gas

Other pipeline products include:

NCM (Non-Clearing Member) Investment Structure:

S.N. Particulars Amount ( In Remarks

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NPR )

1. Registration Fee 1,00,000 + VAT Non-Refundable

2. Software Fee 1,00,000 + VAT Non-Refundable(for 99 members)

3. Segregate A/C 50,000 Refundable

4. Collateral / Member Deposit 50,000 Refundable

Note: The above software fees include 99-client software and becomeunlimited when NCM deposits Rs. 250,000. This is a limited time offer for ourinaugural members and may be subject to change.

CFX Organizational Structure

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Non- Clearing

Members

Trader/Client

Clearing

Member

(Clearing and

Settlement)

NA

NA

Commodity

Futures

Exchange (CFX)

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Documents

Business Proposal for NCMs