Clearing Membership

Clearing Member

Clearing Members form the backbone of the exchange. Clearing Memberships are available to qualified financial institutions only and offer those institutions a number of ways to expand their business.

Income may be earned in five ways:

• Through commissions generated by customer (both members and non-member) executing exchange trades through the Clearing Member.
• Through trade income generated by the Clearing Member’s proprietary trading.
• Through profits made from the Clearing Member’s market-making activities.
• Through commissions and management fees earned by trading in a discretionary manner on behalf of clients (managed accounts).
• Through interest earned on funds deposited by customers with the Clearing Member.

Clearing Members may transact contract executions on behalf of clients, either members or non-members, and earn a commission for doing so. In addition to trading on behalf of customers/clients, Clearing Members may also trade for their own account (proprietary trading) or they may perform the role of market-maker for the exchange (see below for a description of the market-making function and the responsibility of a market-maker). Finally, Clearing Members may trade on behalf of clients under a limited power of attorney (managed accounts). Under the Mercantile Exchange of Madagascar system, only Clearing Members (apart from the Clearing House itself) are allowed to handle customer funds. (Clearing Members have an opportunity to earn interest on customer deposits.)

Requirements:

• Sound financial status to maintain 1:1 capital adequacy against customer trading fund.
• Paid up capital equivalent to €500,000.
• Net-worth on each quarter not less than equivalent to €250,000.
• Experienced clearing desk