SDiX-Circular. Circular No. SDiX Circular Date 18-SEP Department Operations Segment SPOT Trading

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1 SDiX-Circular Circular No. SDiX Circular Date 18-SEP-2017 Department Operations Segment SPOT Trading Subject New Product Category Applicable To All Members SDiX is pleased to announce that pursuant to Rule of the Exchange Rules, a new Product Diamond Bullion will be listed for trading on the Exchange Trading System s Diamond Bullion Market w.e.f 25 th September 2017 A Diamond Bullion comprises of Physical Diamonds (as defined in the Exchange Rules) which are repackaged into a sealed casing that is made from tamper-resistant sintered zirconia with a single sapphire crystal cover that conforms to such particular Diamond Bullion Product Specifications. Only diamonds repackaged from Physical Diamonds by the Singapore Diamond Mint Pte Ltd ( SDM ) or such other persons as may be approved by SDiX (each an Approved Person ) and verified by an accepted laboratory may be listed on the Exchange Trading System as Diamond Bullion. Trading details and the Diamond Bullion Product Specifications are set out in Appendix 1 and Appendix 2 respectively. Pursuant to Rule 8.1 of the Depository Account Rules, Diamond Bullion will be registered and consigned with the Book Depository, SDiX Depository Pte Ltd, in accordance with the processes and/or procedures prescribed in Appendix 3. Notable changes to the existing requirements and provisions for consignment include (without limitation): a. The inclusion of a Broker Member s right to consign and recall Diamond Bullions for its own account or that of its Customers. A Broker Member exercising such right shall be referred to as a Consigning Broker Member. Rule of the Exchange Rules will in due course be amended accordingly to reflect this right. b. The application of the relevant Rules pertaining to the consigning role of an Approved Supplier set out in the Exchange Rules and Depository Account Rules to a Consigning Broker Member. c. Where a Consigning Broker Member consigns Diamond Bullion on behalf of its Customer, the Consigning Broker Member acts as an agent for the Customer and must ensure that the Customer signs a letter of undertaking (the Letter of Undertaking ) in such form as prescribed by the Book Depository that provides that the Customer will submit itself to the Exchange Rules and Depository Account Rules, including assuming the rights and liabilities, as if the Customer is a Consigning Approved Supplier. Page 1 of 10

2 Pursuant to Rule 802 of the Exchange Rules, the Settlement Date for Diamond Bullion shall be Trade Date + 3 i.e. (T+3). For cash settlement, each Member shall make payments in United States Dollars by the dates and times specified in the Book Depository s circular SDPL dated 17 January Unless otherwise stated in any Circular, Guidance Note, processes and/or procedures issued by the SDiX and/or the Book Depository, all Rules in the Exchange Rules and Depository Account Rules in relation to Products or Physical Diamonds will be applicable to Diamond Bullion. Members who wish to trade in Diamond Bullion are required to read and familiarise themselves with the Market Structure Overview (Appendix 1), Diamond Bullion Product Specifications (Appendix 2), and Diamond Bullion Processes/Procedures (Appendix 3) prior to commencement of trading. SDiX would like to inform Members that SDM is an associate company of SDiX where SDiX holds a minority stake in the company. For avoidance of possible conflict of interest, SDiX s management team will not be involved in the daily operations and decision making of SDM. In this regard, SDM will have a separate management team reporting to its Board of Directors. Page 2 of 10

3 Appendix 1 Market Structure Overview Please refer to below table for an overview of the Diamond Bullion Market Structure Trading Hours 14:30 SGT to 18:30 SGT Minimum Trading lot 1 Tick Size 5 USD Price unit* Per Unit Trading Currency USD Products Diamond Bullion Matching Continuous Short-sell Not Allowed Order Type Limit & Market Order Amendment Yes Order cancellation Yes Price Limit +/-10.00% over the previous day s closing price * Note: Price of the Diamond Bullion shall be quoted on UNIT basis and not Per Carat. A UNIT here is the minimum weight of the Diamond Bullion as defined in the Product Specifications. Appendix 2 Diamond Bullion Product Specifications Product Market : Diamond Bullion 1 Product Description: Bronze Diamond Bullion each comprises of three 100DW1 Diamonds and six 50FW1 Diamonds (D/F Colors VVS1 Clarities Stones) Product: DBBRZ Series: September 2017 Specifications of Diamond Bullion: Total Number of Diamonds: 9 diamonds Number of.50 carat diamond 6 diamonds Number of 1 carat diamond 3 diamonds Minimum Weight of 100DW1: 3.1 carats Minimum Weight of 50FW1: 3.1 carats Weight Tolerance of each category: +.05 carats Minimum Weight of Diamond Bullion: 6.2 carats Weight Tolerance of Diamond Bullion: +.10 carats Grading/ Verification Lab(s) accepted: IIDGR 2 Specifications of individual diamonds in Diamond Bullion: Grading Lab(s) accepted: GIA Page 3 of 10

4 Certificate required: Laser Inscription: Shape of Diamond(s): Size of Diamond(s): Color Grade of Diamond(s): Clarity Grade of Diamond(s): Cut of Diamond(s): Polish of Diamond(s): Symmetry of Diamond(s): Fluorescence of Diamond(s): Brown, Green, or Milky Shade: GIA Diamond Dossier GIA Report Number Round Brilliant.50 to.59 carats F VVS1 Grading Lab(s) accepted: Certificate required: Laser Inscription: Shape of Diamond(s): Size of Diamond(s): Color Grade of Diamond(s): Clarity Grade of Diamond(s): Cut of Diamond(s): Polish of Diamond(s): Symmetry of Diamond(s): Fluorescence of Diamond(s): Brown, Green, or Milky Shade: GIA GIA Diamond Dossier GIA Report Number Round Brilliant 1.0 to 1.15 carats D VVS1 Notes: 1 A reference to Diamond Bullion refers to Diamond Bullion representing an undivided share in a Pool or consigned goods. 2 IIDGR refers to the International Institute of Diamond Grading and Research. The Conditions of Original Contract in the Product may be found in Attachment B of Chapter 7 of the Exchange Rules. Reference should also be made to Rule 21 (Risk Factors) of the Depository Account Rules, and Members and their underlying customers are deemed to be aware of and to have accepted the risks set out in Rule 21 (Risk Factors). These risks include risks arising from insolvency (including the absence of finality), import of Physical Diamonds, the pledge and power of sale of the Book Depository over the Member s Specific Diamonds (to the extent provided for in the Exchange Rules), security interests in the Physical Diamonds, limitations of insurance policies, the contractual and non-statutory nature of the Book Depository Register, electronic risks, no advice being provided by the Exchange, the Book Depository or any of their agents, officers or employees, chain of transactions (i.e. intra-day trading), transacting in Products that are Diamond Bullion in a Pool, allocation of Diamond Bullion held in a Pool and the right of the Exchange and the Book Depository to designate that a Pool be allocated, and the limited obligations of the Book Depository in relation to the transfer of title, property, rights and interest to a Product. Without being exhaustive of all the risk factors that may apply to dealings on the Exchange Trading System and/or the depository services or limiting any of the foregoing, please note that Products sold by Approved Suppliers or Consigning Broker Members could be subject to an Encumbrance in favour of Bank(s) which may only be discharged once the proceeds of the sale is paid into a designated account held with the Bank(s) or otherwise received by the Bank(s). If the Bank(s) enforce(s) its Encumbrance, the transaction may be reversed or unwound even after settlement and a Purchaser for the Product would only have an unsecured claim against the counterparty for any loss or damage. In addition, intra-day trading on the Exchange Trading System may affect more transactions flowing from the transaction with the Approved Supplier or Consigning Broker Member. For instance, a Purchaser s transaction may be affected if the Vendor for the transaction is a Member who had purchased the Product from an Approved Supplier or Consigning Broker Member. Page 4 of 10

5 Product Market: Diamond Bullion 1 Specifications of Diamond Bullion: Product Description: Silver Diamond Bullion each comprises of three 100DW2 Diamonds, three 100EW1 Diamonds and three 100FW1 Diamonds (D/E/F Colors VVS1/VVS2 Clarities Stones) Product: DBSIL Series: September 2017 Total Number of Diamonds: 9 diamonds Number of 1 carat diamond 9 diamonds Minimum Weight of each category: 3.1 carats Weight Tolerance of each category: +.05 carats Minimum Weight of Diamond Bullion: 9.3 carats Weight Tolerance of Diamond Bullion: +.15 carats Grading/ Verification Lab(s) accepted: IIDGR 2 Specifications of individual diamonds in Diamond Bullion: Grading Lab(s) accepted: Certificate required: Laser Inscription: Shape of Diamond(s): Size of Diamond(s): Color Grade of Diamond(s): Clarity Grade of Diamond(s): Cut of Diamond(s): Polish of Diamond(s): Symmetry of Diamond(s): Fluorescence of Diamond(s): Brown, Green, or Milky Shade: GIA GIA Diamond Dossier GIA Report Number Round Brilliant 1.0 to 1.15 carats D VVS2 Grading Lab(s) accepted: Certificate required: Laser Inscription: Shape of Diamond(s): Size of Diamond(s): Color Grade of Diamond(s): Clarity Grade of Diamond(s): Cut of Diamond(s): Polish of Diamond(s): Symmetry of Diamond(s): Fluorescence of Diamond(s): Brown, Green, or Milky Shade: GIA GIA Diamond Dossier GIA Report Number Round Brilliant 1.0 to 1.15 carats E VVS1 Page 5 of 10

6 Grading Lab(s) accepted: Certificate required: Laser Inscription: Shape of Diamond(s): Size of Diamond(s): Color Grade of Diamond(s): Clarity Grade of Diamond(s): Cut of Diamond(s): Polish of Diamond(s): Symmetry of Diamond(s): Fluorescence of Diamond(s): Brown, Green, or Milky Shade: GIA GIA Diamond Dossier GIA Report Number Round Brilliant 1.0 to 1.15 carats F VVS1 Notes: 1 A reference to Diamond Bullion refers to Diamond Bullion representing an undivided share in a Pool or consigned goods. 2 IIDGR refers to the International Institute of Diamond Grading and Research. The Conditions of Original Contract in the Product may be found in Attachment B of Chapter 7 of the Exchange Rules. Reference should also be made to Rule 21 (Risk Factors) of the Depository Account Rules, and Members and their underlying customers are deemed to be aware of and to have accepted the risks set out in Rule 21 (Risk Factors). These risks include risks arising from insolvency (including the absence of finality), import of Physical Diamonds, the pledge and power of sale of the Book Depository over the Member s Specific Diamonds (to the extent provided for in the Exchange Rules), security interests in the Physical Diamonds, limitations of insurance policies, the contractual and non-statutory nature of the Book Depository Register, electronic risks, no advice being provided by the Exchange, the Book Depository or any of their agents, officers or employees, chain of transactions (i.e. intra-day trading), transacting in Products that are Diamond Bullion in a Pool, allocation of Diamond Bullion held in a Pool and the right of the Exchange and the Book Depository to designate that a Pool be allocated, and the limited obligations of the Book Depository in relation to the transfer of title, property, rights and interest to a Product. Without being exhaustive of all the risk factors that may apply to dealings on the Exchange Trading System and/or the depository services or limiting any of the foregoing, please note that Products sold by Approved Suppliers or Consigning Broker Members could be subject to an Encumbrance in favour of Bank(s) which may only be discharged once the proceeds of the sale is paid into a designated account held with the Bank(s) or otherwise received by the Bank(s). If the Bank(s) enforce(s) its Encumbrance, the transaction may be reversed or unwound even after settlement and a Purchaser for the Product would only have an unsecured claim against the counterparty for any loss or damage. In addition, intra-day trading on the Exchange Trading System may affect more transactions flowing from the transaction with the Approved Supplier or Consigning Broker Members. For instance, a Purchaser s transaction may be affected if the Vendor for the transaction is a Member who had purchased the Product from an Approved Supplier or Consigning Broker Members. Page 6 of 10

7 Appendix 3 Diamond Bullion Processes / Procedures A. Consignment of Diamond Bullion Pursuant to Rule 8.1 of the Depository Account Rules, the Book Depository hereby prescribes the following processes and/or procedures for the consignment of Diamond Bullion:- 1. An Approved Supplier or a Broker Member (either for its own account or that of its Customer) who wishes to consign Diamond Bullion with the Book Depository shall notify the Book Depository of such proposed consignment and the Physical Depository (as defined in the Depository Account Rules) to which the Diamond Bullion is proposed to be consigned by providing the Book Depository with a consignment file in a format prescribed by the Book Depository before 17:00 SGT on any working day; 2. The Consigning Approved Supplier or Consigning Broker Member (each a Consigning Member ) shall ensure that the Diamond Bullion is certified or verified by an accepted laboratory as prescribed in the Product Specifications (the Grading/ Verification Lab ), including certifying that each individual diamond contained within the Diamond Bullion has a valid table marking. The Consigning Member shall be deemed to have satisfied this requirement if it receives a confirmation from the Approved Person that the Diamond Bullion proposed to be consigned has been sent to the Grading/ Verification Lab for certification or verification; 3. The Book Depository shall send the consignment file provided by the Consigning Member to the Grading/ Verification Lab for the Grading/ Verification Lab to update the status of its verification; 4. Upon verification, the Grading/ Verification Lab updates the status in the consignment file by indicating whether each individual diamond packed in Diamond Bullion is confirmed or rejected and returns the consignment file to the Book Depository. Confirmed means that the individual diamonds in the Diamond Bullion conforms to the Product Specifications. Diamond Bullion will be deemed good for proposed consignment if the diamond weight of each category conforms to the Product Specifications. 5. The Book Depository notifies the Consigning Member of the results of the Grading/ Verification Lab s verification through the updated consignment file and the Consigning Member provides the necessary documents to pick up the Diamond Bullion from the Grading/ Verification Lab. 6. The Consigning Member shall deliver the Diamond Bullion to the Approved Vault from the Grading/ Verification Lab by procuring the Physical Depository to pick up the Diamond Bullion from the Grading/ Verification Lab and deliver it to an Approved Vault controlled by the Physical Depository (the Consignment Delivery ). For the purpose of the Consignment Delivery, the Consigning Member authorises the Book Depository to act as its agent in accordance with Rule 10 of the Depository Account Rules. 7. The Physical Depository shall notify the Book Depository after the Diamond Bullion has been deposited into the Approved Vault. Page 7 of 10

8 8. If the Physical Depository s notification is received before 17:00 SGT, the Book Depository shall record a book-entry credit to the Diamond Bullion in the form of a Product to the relevant Depository Account of the Consigning Member on the day of receipt of such notification. 9. If the Physical Depository s notification is received after 17:00 SGT, the Book Depository shall record a book-entry credit to the Diamond Bullion in the form of a Product to the relevant Depository Account of the Consigning Member on the business day after the receipt of such notification. 10. The Diamond Bullion shall be available for trading on the Exchange Trading System on the next business day after it has been credited to the relevant Depository Account of the Consigning Member. A Consigning Broker Member must ensure that it has received a Letter of Undertaking from a Customer before agreeing to act as the Customer s agent to consign Diamond Bullion with the Book Depository. The Letter of Undertaking must include the following clauses:- a. The Customer agrees that the Consigning Broker Member is only acting as an agent for the Customer; b. The Customer undertakes to submit itself to the Exchange Rules and the Depository Account Rules including assuming the rights and liabilities, as if the Customer is a Consigning Approved Supplier; and c. The Customer undertakes to comply with the relevant Exchange Rules, Depository Account Rules, processes and procedures prescribed by SDiX and/or the Book Depository in relation to the consignment of the Diamond Bullion. B. Immobilisation Delivery and Physical Settlement of First Diamond Bullion Sale (Pooled) After a Diamond Bullion has been consigned with the Book Depository, the consigned Diamond Bullion will be available for trading on the Exchange Trading System. Once the consigned Diamond Bullion is sold ( First Diamond Bullion Sale (Pooled) ), the following processes/procedures will apply in relation to the immobilisation delivery and physical settlement pursuant to Rule 806 of the Exchange Rules and the Depository Account Rules: - i. As at close of business on Trade Date (T), the Book Depository informs the Consigning Member to deliver Diamond Bullion(s) based on the Bullion Reference Number to a Pool in the Singapore Vault by T+2; ii. By 12:00 SGT on T+1, the Consigning Member generates the invoice to be given to the Physical Depository for the collection of the Diamond Bullion at the Vault to be delivered to Singapore and submits a copy to the Book depository; iii. The invoice, together with other relevant supporting documents required for the export of Diamond Bullion must be handed to the Physical Depository by 13:00 SGT; iv. For Diamond Bullion consigned to a Vault outside Singapore, the Physical Depository must seek customer clearance for the shipment by T+1, 17:30 SGT; v. On T+2, the Physical Depository shall give its confirmation to the Book Depository that the Diamond Bullion has been delivered to the Pool and immobilised in the Singapore Vault; and Page 8 of 10

9 vi. On T+3, the Book Depository shall pass a Book Entry in the Depository System to credit and debit the respective Member s Depository Account. Note: This is not applicable for Diamond Bullion consigned directly to the Singapore Vault. C. Recall or Withdrawal of Diamond Bullion The current process/procedure for the recall or withdrawal of Physical Diamonds is applicable for the recall or withdrawal of Diamond Bullion. D. Closing Price Pursuant to Rule of the Exchange Rules, the Exchange hereby prescribes the following process for determining the closing range for Diamond Bullion ( Closing Price ):- i. Use the average of the last traded price 30 minutes prior to the close of trading for the day or 60 minutes if no trades are executed during the 30-minute period; ii. If no trades are executed during the last 60 minutes of trading, the mid-point of the average bid and offer during the last 30 minutes (or 60 minutes if there are no bids or offers) shall be the Closing Price; iii. If there is no bid price, the Closing Price shall be the lower of the best offer price or the previous day s Closing Price. Similarly, if there is no offer price, the Closing Price shall be the higher of the previous day s Closing Price or the best bid price; and iv. The Exchange may modify the above process or use a different methodology to determine the Closing Price from time to time where it determines such is necessary to maintain an open, fair and transparent market. E. Fees Pursuant to Rules to of the Exchange Rules and Rule 19 of the Depository Account Rules, please be informed that all Members who trade on the Exchange Trading System are required to pay the transaction, custody and withdrawal fees on a monthly basis. The Book Depository shall communicate to the Members the transaction and custody fees by the 7th of the subsequent month through an invoice (i.e fees for April 2017 shall be communicated by 7th May 2017). Details of the fees levied for Diamond Bullion are as per below: Transaction Fees: Transaction fees indicated are for each side of the transaction. Product Transactions Value (USD) Applicable fees for House Trades Applicable Fees for Customer Trades Diamond Bullion Any 50 bps 50 bps Page 9 of 10

10 For any further clarifications Members may contact the Operations Team as below; Telephone No Fax No id The Exchange shall notify Members of any changes through Circulars from time to time. For and on behalf of Singapore Diamond Investment Exchange Pte Ltd (SDiX) Sreeniwas Shanishetty Head of Operations Page 10 of 10

Indian Commodity Exchange Limited. Circular No.: ICEX/TRADING/ Date: April 03, 2018

Indian Commodity Exchange Limited Circular No.: ICEX/TRADING/2018-132 Date: April 03, 2018 Dept.: Trading Subject: Commencement of Diamond Futures Trading in 30 Pointer In terms of the provisions of the