«Chana Product Note ANNEXURE CHAPTER 1 - TRADING PARAMETERS Authority Unit of Trading Months Traded In Tick Size Basis Price Unit for Price Quotation ...»
CHAPTER 1 - TRADING PARAMETERS
Unit of Trading
Months Traded In
Unit for Price Quotation
Hours of Trading
Last Day of Trading
Mark to Market
Pre-Expiry Additional Margin
Penalty for cash settlement
CHAPTER 2 - DELIVERY PROCEDURES
Unit of Delivery
Good / Bad delivery Norms
Quality Testing Report
Duties & levies
Premium / Discount
CHAPTER 3 - CLEARING AND SETTLEMENT
Daily Settlement Prices
Final Settlement Prices
Dissemination of Spot Prices
Pay in and Pay out for Daily Settlement / Final Settlement
Pay in and Pay out for final physical settlement
Exhibit 1 – CONTRACT SPECIFICATIONS OF Chana
Exhibit 2 - Warehouse & Assayer Address Details
Exhibit 3 - Good / Bad delivery norms for acceptance at the Warehouse..................17 Exhibit 4 – Specimen of Chana Testing Report
CHAPTER 1 - TRADING PARAMETERSAuthority Trading of Chana futures may be conducted under such terms and conditions as specified in the Rules, Byelaws & Regulations and directions of the Exchange issued from time to time. A specimen of Chana futures contract specification is indicated in Exhibit 1.
Unit of Trading The unit of trading shall be 10 MT. Bids and offers may be accepted in lots of 10 MT or multiples thereof.
Months Traded In Trading in Chana futures may be conducted in the months as specified by the Exchange from time to time.
Tick Size The tick size of the price of Chana shall be Re1.
Basis Price The basis price of Chana shall be Rajasthan Desi ex-warehouse Delhi inclusive of all taxes and levies.
Unit for Price Quotation The unit of price quotation for Chana shall be in Rupees per Quintal. The basis for Chana traded as Chana is Rajasthan Desi ex-warehouse Delhi inclusive of all taxes and levies.
Hours of Trading
The hours of trading for futures in Chana shall be as follows:
• Mondays through Fridays – 10.00 AM to 05.00 PM
• Saturdays – 10.00 AM to 02.00 PM Or as determined by the Exchange from time to time. All timings are as per Indian Standard Timings (IST) Last Day of Trading Last day of trading shall be 20th calendar day of contract month, if 20th happens to be a holiday or a Saturday, then the previous working day.
Mark to Market The outstanding positions in futures contract in Chana would be marked to market daily based on the Daily Settlement Price (DSP) as determined by the Exchange.
Position limits Member-wise: Rs.20 crores or 15% of open interest, whichever is higher Client-Wise :Rs.10 crores or 10% of open interest, whichever is higher
Both position limits will be subject to NCDEX Regulations and directions from time to time.
Margin Requirements NCDEX will use Value at Risk (VaR) based margin calculated at 99% confidence interval for one day time horizon. NCDEX reserves the right to change, reduce or levy any additional margins including any mark up margin.
Pre-Expiry Additional Margin There will be an additional margin imposed for the last 5 trading days, including the expiry date of the Chana contract. The additional margin will be added to the normal exposure margin and will be increased by 5% everyday for the last 5 trading days of the contract.
Delivery Margins In case of open positions materializing into physical delivery, delivery margins as may be determined by the Exchange from time to time will be charged. The delivery margins will be calculated based on the number of days required for completing the physical delivery settlement (the look-ahead period and the risks arising thereof).
Penalty for cash settlement The Exchange may impose such penalties as may be decided, on sellers who choose not to deliver the commodity. Currently such penalty for Chana is prescribed at 0.5% of FSP.
This penalty may be revised by the Exchange from time to time.
Ten percent (10%) of such penalty amount shall be retained by the Exchange and the balance ninety percent (90%) shall paid to the buyers to whom the deliveries could not be made.
Arbitration Disputes between the members of the Exchange inter-se and between members and constituents, arising out of or pertaining to trades done on NCDEX shall be settled through arbitration. The arbitration proceedings and appointment of arbitrators shall be as governed by the Bye-laws and Regulations of the Exchange.
CHAPTER 2 - DELIVERY PROCEDURES
Delivery Size Delivery is to be offered and accepted in lots of 10MT Net or multiples thereof. A quantity variation of +/- 5% is permitted as per contract specification.
Delivery Requests The procedure for Chana delivery is based on the contract specifications as per Exhibit I.
During three trading days prior to expiry of the contract (including the date of expiry), sellers having open positions would be required to indicate delivery information for giving delivery. NCDEX would thereafter complete the matching process based on the location and by random, keeping in view the storage capacity of warehouse and Chana already deposited / dematerialized for delivery or any other factor(s) that the Exchange deems appropriate for completion of the matching process.
It may be noted that upon expiry of the contract, if any seller having open position desires to give physical delivery at a specified delivery center, then the buyer with corresponding open position as matched by the process put in place by the Exchange, shall be bound to settle by taking physical delivery. All open positions of those sellers who do not provide required information for physical delivery shall be settled in cash with penalties.
For Chana, currently, the applicable penalty is 0.5% of the Final Settlement Price (FSP).
Delivery Allocation The Exchange would then compile delivery requests received from members on the last trading day, as specified in Chapter 1 above. The buyers / sellers who have to receive / give delivery would be notified on the same day after the close of trading hours. Delivery of Chana is to be accepted by buyers at the accredited warehouse where the seller effects delivery in accordance with the contract specifications.
Actual Delivery Where Chana is sold for delivery in a specified month, the seller must have requisite electronic credit of such Chana holding in his Clearing Member’s Pool Account before the scheduled date of pay in. On settlement the buyer’s Clearing Member’s Pool Account would be credited with the said delivery quantity on pay out. The Clearing Member is expected to transfer the same to the buyer’s depository account. However, the buyer must take actual physical delivery of Chana before expiry of the validity date as indicated in the quality test report/Assayer’s Certificate of the Assayer or get the same revalidated.
Accredited Warehouse NCDEX has accredited warehouses for receipt and delivery of Chana. Chana will be received and delivered only from the NCDEX accredited warehouse. The details of the NCDEX accredited warehouses are as per Exhibit 2.
The Chana received at the NCDEX accredited warehouse will be tested and certified by NCDEX accredited Assayer before acceptance as good delivery in the warehouse.
Likewise, Chana delivered to buyers will be from the accredited warehouse only.
Quality Standards The contract quality for delivery of Chana futures contracts made under NCDEX Regulations shall be Chana conforming to the quality specification indicated in the contract. No lower grade/quality shall be accepted in satisfaction of futures contracts for delivery except as and to the extent provided in the contract specifications. Delivery of higher grade would be accepted without premium.
Packaging Chana should be in standard bags of 100 Kg only (Gross weight) if delivered at the accredited warehouse at New Delhi and in standard bags of 90 Kg only (Gross weight) if delivered at accredited warehouse at Indore. Chana delivered shall be packed in clean, dry, sound, single / once used, new or unmended B-Twill bags in merchantable condition and or any other accepted industry standard material with the mouth of the bag stitched disallowing sweating / spilling.
Standard Allowances Sample weight per validation of quality allowed will be 0.20% on account of sample testing.
At the time of deposit The quantity credited will be the actual quantity delivered at the tested moisture level, after providing for standard allowances on account of sampling.
At the time of withdrawal / revalidation The weight of lot delivered / revalidated at the time of withdrawal / revalidation shall be adjusted to moisture level at the time of deposit / revalidation whichever is later and such adjustment shall be over and above the standard allowances mentioned above.
Weight The quantity of Chana received and / or delivered at the NCDEX designated warehouse would be determined / calculated by the weighbridge / weigh scale at the premises of the designated warehouse and the quantity so determined would be binding on all parties. The weight of the bag will be 100 kg Gross.
Good / Bad delivery Norms Chana delivery into NCDEX designated Warehouse would constitute good delivery or bad delivery based on the good / bad delivery norms as per Exhibit 3. The list contained
in Exhibit 3 is only illustrative and not exhaustive. NCDEX would from time to time review and update the good / bad delivery norms retaining the trade / industry practices.
Chana Sampling The sampling will be done with 5% of Chana. Out of every lot, 100 bags will be randomly selected & out of these bags any 20 bags will be taken, samples will be drawn from 3 places of each bag and a composite mixture of 2 kgs will be made. This is then divided into 4 parts
These samples will be distributed as under:
- One sample to Depositor
- One sample to Warehouse owner
- One sample for Analysis by assayer
- One sample for record with assayer Accredited Assayer NCDEX has approved the Assayer for quality testing and certification of Chana received at the designated warehouse. The quality testing and certification of Chana will be undertaken only by the approved Assayer. The assayer details are given in the Exhibit 2 alongside the warehouses.
Quality Testing Report The test report issued by the Chana testing laboratory on the samples drawn shall be acceptable and binding on all parties. A specimen format of the quality testing report is indicated in Exhibit 4.
Testing Procedure Testing for Chana will be done both physically and chemically. To test Green-ImmShrivelled Seeds, Broken Splits and Damaged-Weeviled physical tests are conducted.
For Moisture, chemical test is done by oven dry method.
Assayer Certificate Testing and quality certificate issued by NCDEX approved Assayer for Chana delivered at designated warehouse in Delhi and at such other locations announced by the Exchange from time to time shall be acceptable and binding on all parties. Each delivery of Chana at the warehouse must be accompanied by a certificate from NCDEX approved Assayer in the format as per Exhibit 4.
Validity period The validity period of the Assayer’s Certificate for Chana is 2 months or till the first withdrawal from the warehouse whichever is earlier. Revalidation will be for 1 month each for two revalidations.
Electronic transfer Any buyer or seller receiving and or effecting Chana would have to open a depository account with an NCDEX empanelled Depository Participant (DP) to hold the Chana in electronic form. On settlement, the buyer’s account with the DP would be credited with
the quantity of Chana received and the corresponding seller’s account would be debited.
The Buyer wanting to take physical delivery of the Chana holding has to make a request in prescribed form to his DP with whom depository account has been opened. The DP would route the request to the warehouse for issue of the physical commodity i.e. Chana to the buyer and debit his account, thus reducing the electronic balance to the extent of Chana so rematerialized.
Charges All charges and costs payable at the designated warehouse towards delivery of Chana including sampling, grading, weighing, handling charges, storage etc. from the date of receipt into designated warehouse upto date of pay in & settlement shall be paid by the seller.
No refund for warehouse charges paid by the seller for full validity period shall be given to the seller or buyer for delivery earlier than the validity period.
All charges and costs associated & including storage, handling etc. after the pay out shall be borne by the buyer. Warehouse storage charges will be charged to the member / client by the respective Depository Participant.
The Assayer charges for testing and quality certification should be paid to the Assayer directly at the delivery location either by cash / cheque / demand draft.
Duties & levies All duties, levies etc. up to the point of sale will have to be fully borne by the seller and shall be paid to the concerned authority. All related documentation should be completed before delivery of Chana into the NCDEX accredited warehouse.
Stamp Duty Stamp duty is payable on all contract notes issued as may be applicable in the State from where the contract note is issued or State in which such contract note is received by the client.