PRESENTATION Objective Competitive Edge Enhancing maximum liquidity and

PRESENTATION Objective & Competitive Edge • Enhancing maximum liquidity and contributing to the depth and stability of market by enabling market making. • Enabling price discovery to support and create the market for local domestic products in the long run with the purpose of physical delivery. • State of the art, Cutting edge trading console with customizable features and more professional state-of-art software in line with the proposed regulatory parameters. • Competitive move of an exchange to counteract mushrooming of new exchange openings. • Internationally practiced exchange’s clearing and settlement modality with the complete order matching system leading to more transparent market mechanism.

PRESENTATION MEX Market Structure CM/MM MM Broker Client

PRESENTATION Exchange (EX) • A commodity exchange, abiding by the rules and bye-laws and also by the law of land. Offering huge opportunity and enabling Nepalese investors to diversify their investment portfolio with the help of its members, banking partners and software vendors. • Provides brand new platform and have overall supervision, observation, super surveillance on the market and its participants.

PRESENTATION Clearing Member(CM) • Registered institution with financial requirement as prescribed by exchange. • Dual Role of Clearing & Settlement(C&S) and Market Making as a Market Maker(MM) • Clearing &Settlement Role Can introduce market maker, brokers, clients, and responsible for administrative works (provide margin/ commission leverage, creating client profile, Broker and Sub-broker creation, margin call, fund transfer, offline support etc) • Market Making Role* Provide frequent bid and ask quotes simultaneously with quantity within the parameters set by Exchange

PRESENTATION Market Maker (MM) • Registered institution or an individual • Plays only role of Market Making* • Not authorized to introduce broker & clients Broker • Plays a role to introduce sub-brokers /clients or can trade on their own account. • Providing advisory services to clients, training and customer support etc.

PRESENTATION Market Mechanism • Exchange will provide the External Price Link to all the MMs as a reference price. • MMs can choose the Spread and can show their intentions of Buy and Sell quantity for different contracts; however maximum permitted spread will be decided by the Exchange itself. • MMs must show their intentions of both buy and sell quotes, which will be displayed to all the clients and clearing and settlement will be done through Automated Trading System (ATS).

PRESENTATION Market Mechanism • Intentions of the MMs will represent the Market Depth. • Quotes of MMs will be sorted as per their defined spread and order will be matched on Price-Time priority. • Clients and MMs too can close their any open position at the available best Bid and Ask. -If Market Maker close their open position, further profit and loss of the respective client will be transferred to the next Marker available on best Bid and Ask, with no effect on the clients open position.

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