Contract Specifications of Pre-certified Cotton Bales Mumbai Delivery Contract

Transcription

1 Contract Specifications of Pre-certified Cotton Bales Mumbai Delivery Contract Commodity Symbol Contract Daily contract Trading period Trading session Cotton Bales COTNMUM8 Buying and selling on intra day basis will be permitted, but all positions outstanding at end of trading session on the same day must result into compulsory delivery. Mondays through Saturdays except holidays specified in advance Monday to Friday: a.m. to 6.00 p.m. Saturday: a.m. to 2.00 p.m. Trading Trading unit 100 Bales Quotation/Base Rs. Per Candy Value Tick size (minimum Rs. 10 price movement) Daily price limits 3% Price Quote Ex Warehouse, Mumbai (out side Octroi Limits within 50 kms Radius) excluding VAT/ CST and any other Additional Tax or Surcharge on Sales Tax and Local Taxes. Initial margin 5 % Maximum Order Size 1200 Bales Delivery Delivery unit Delivery center(s) 100 Bales and direct multiples thereof. Exchange designated warehouse at Mumbai. Tender and Delivery Period Delivery Logic Nine working days from the contract trading day. Compulsory. Net positions at close of the trading session must be delivered on the designated tender days. Quality specifications on Physical Inspection and HVI Mode Ginning Pattern Staple Length Roller Ginned Cotton Only Saw Ginned Cotton will be rejected. Min 29 mm Micronaire 3.5 to 4.9 Strength 28 gpt Trash% 3.0 % Maximum Color- Grade Not above 31-5 Moisture Max 8.5 % Physical All bales of the lot should be in good condition should be

2 Condition Of Bales Packing Material Bale size, Weight per bale and total weight Identification nos. / Markings on Bale Premium / discount free from oil / ink stains penetrating the bale or damaged in any other way. Should be in cloth packing only. Cloth material used should be of min 100 gms / square meter. It should also be strapped either with Plastic (PP) straps or with Iron hoops of good quality / condition (not rusted) The bales should be well packed - from all six sides - should be in export worthy conditions. Not more then 5 bales should be pre- opened (either for sampling or for any reasons). If any bale is pre- opened, then it must have been well re- packed so that it is not in burst condition. Bales should be of approx. 48 x 18 X 18 dimensions.total weight of the lot (100 bls/lot) should be 17000kgs (+/- 5 %) where in individual bales should not be weighing less then 160 kgs or not more then 175 kgs All markings such as name of the Producer/ Ginner / seller, if any; name of the Variety, if any; Lot no., if any; press Running Nos. in continuation for all 100 bales. The P.R. Nos. in continuation only will be considered as one lot. Every bale of the lot has to have its serial no. starting from 1 to 100 and the Press running nos. in sequence; Press marks, if any; Cotton Season all identification marks - Marking should be put on cloth / Paper labels, No plastic material should be used for labels, if markings are stenciled with ink on surface of the bale, then the ink used for such markings should not have damaged the Cotton inside the bale. No premium / discount for any variation in quality specification.

3 Annexure-2 Delivery and Settlement Procedure of Cotton Bales Mumbai delivery contract Delivery logic Commodity movement to warehouse for certification Mode of communication Delivery period margin 15% Exemption from delivery period margin for Seller Delivery allocation - Date - Rate Delivery pay-in [Commodity] Regular Auction Delivery pay-in [Commodity] against Auction, if any Delivery pay-out [Commodity] Regular Delivery pay-out [Commodity] Auction Pay-in of funds MTM pay-in Funds pay-in against delivery Auction pay-in [Funds] if any Pay-out of funds MTM Pay-out Funds Pay-out (Regular) Funds pay-out (Auction) Auction Procedure Compulsory delivery. Any buyer or seller having open position at close of the trading session on the same day must result into compulsory delivery. Delivery allocation will be done at client level. On any working day upto T+5 (within 5 days of trading). The commodity should reach the designated warehouse upto 3.00 pm. E mail, fax or courier Delivery Period Margin will be exempted if seller submits Warehouse Receipt and Quality Certificate i.e. CERTIFIED STOCK on or before the closing hours of the trading day. The commodity will be called as CERTIFIED STOCK when the Commodity is deposited in Exchange accredited warehouse and Quality Certificate is issued. - After closing hours of the trading day - At the closing/settlement rate. Delivery allocation will be done at client level. On T+8 by 2.00 PM T+8 (5:00 pm to 5.30 pm) On T+9 at am On T+8 at 5.30 PM T+9 By PM T+1(11.00AM) T+8( PM) T+9(12.00 noon) T+1(12.00 noon) T+8 (5.30 PM) T+9 (03:00 PM) I Sellers Default Seller having open position on expiry of the contract has to compulsorily deliver. If the seller fails to deliver, then the open position

4 will be covered from the market at the risk and cost of the seller, as per the Exchange auction mechanism as specified in Annexure-3. II Buyers Default The buyer will have to compulsorily take the delivery of goods and make payment. In case of failure, the Exchange will dispose of such goods in the market at the risk and cost of the buyer as per the Exchange auction mechanism as prescribed in Annexure-3. Taxes, Duties, Cess and Levies Official Closing Price Odd lot treatment EX- WAREHOUSE MUMBAI. Inclusive of all charges / taxes if applicable till delivered at Warehouse, but excluding VAT/ CST, any other additional Taxes if applicable. Seller will issue invoice in the name of the buyer, reflecting the CST/VAT applicable. In case of Inter-state movement, Buyer has to submit requisite forms and pay CST as applicable. Post lifting delivery charges are borne by the buyer. All the Buyer s / Sellers tendering commodity / or taking delivery shall have necessary Registration from the applicable Tax Authorities and obtain other licenses, if any, required by them. In case the seller / Buyer does not have a Sales Tax Registration number, then he shall appoint an Agent/Nominee who has the required Tax Registration and deliver / take the goods through him. The Member giving delivery and the Member taking delivery will exchange appropriate tax forms as provided in law and as customary and neither of the parties will unreasonably refuse to do so. In case any of the member or his client fails to provide necessary forms in respect of sales tax resulting into pecuniary loss to the other party, the Exchange will impose a charge on the party in default and after collection thereof, will pass on the same to the member, who or whose client has suffered such loss. In addition to above, the Exchange can impose additional penalty on the party in default. Official Closing Price shall be calculated by the Exchange at the close of the trading session. All trades will be marked to market as per such price, which will be settled by pay in/ pay out next day. All outstanding positions at end of trading session will be settled by delivery and payment as per Official Closing Price. Deliveries must be in multiples of 100 Cotton

5 Warehouse, insurance and transportation Charges. Buyer s option for lifting of Delivery bales. As per Annexure-4 Delivery tendered by the seller will be allocated among the buyers. A Buyer will not have any option about choosing the place or warehouse, from which delivery is allocated to him. He has to accept the delivery as allocated by the Exchange. Delivery center Delivery will be from Exchange designated Legal obligation Extension of delivery period Applicability of Business Rules warehouse at Mumbai. The member will provide appropriate tax forms wherever required as per law and as customary and neither of the parties will unreasonably refuse to do so. As per the Exchange decision due to a force majeure or otherwise. The general provisions of Business Rules of the Exchange and decisions taken by the Board of Directors and Executive Committee of the Exchange in respect of matters specified above will apply mutatis mutandis. The Exchange may further prescribe additional measures relating to delivery procedures, warehousing, quality certification, Margin and risk management from time to time. In case of any interpretational dispute or clarifications, the decision of the Exchange shall be final and binding on the members and others.

6 Annexure-3 Auction Procedure on Buyer/Seller Default In case of Buyers /Sellers Default in Pay-in of Funds/Commodities Applicability of Auction When the buyer s/seller s fail to honour funds/commodities pay-in on Funds/Commodities Pay-in date within the scheduled time fully or partly or when informed to the exchange about his inability to make pay-in, it will be treated as buyer s/seller s default, which will be liable to be settled through Auction procedure. Symbol for auction Buy-in ABCOTNMUM Symbol for auction Sell- ASCOTNMUM out Auction will be on net Basis. In case there is simultaneous default by seller and buyer( at client level), then Exchange will auction/cover the net quantity. Exchange will impose penalty of 1% on each defaulting parties. In addition to above, differential rate of auction price and settlement price shall be distributed proportionately to all the sellers or buyers depending upon the auction or covering of the quantity. For Example: Defaulting Sellers Defaulting Buyers A 20MT D 10 MT B 10 MT E 40 MT C 30 MT F 20 MT G 30MT Total Default Qty 100 MT 60 MT NET Qty to be auctioned : 40MT Penalty of 1% will be imposed on A, B, C, D, E, F and G of settlement rate of trading day. In addition to this penalty the differential rate of auction price and settlement price shall be proportionately distributed to D, E, F and G as Exchange auctions the commodity in the market.

7 Participation in the Auction/covering Acceptance of Bids Broadcast of Auction able Quantity through TWS. Declaration of Successful Bids Allocation of accepted quantity to original buyer/s & close out of remaining quantity against defaulting seller/s The sellers who will participate in auction must be in possession of certified Stock in Warehouse and valid warehouse receipt. Similarly, the auction buyers who will participate in the auction must have required funds in his settlement account as the pay-in of commodity and funds will be effected on the next day following date of auction. Bids will be accepted within the range of 10% of the closing price on the day prior to the date of auction. Exchange will conduct auction and broadcast auction- able quantity, through TWS, on T+8 day.(t=trading date of the contract) (excl. Sundays and Bank Holidays) at 4.30PM The Exchange will inform the member/s whose bids are accepted as successful bids, being the best bids. If total quantity covered is less than scheduled auction quantity, accepted/auctioned quantity will be allocated to the original buyer/s on random basis. Un-covered quantity (i.e. remaining quantity that could not be covered) will be closed out on a) 5% above the closing price on the date of auction. or b) Highest Auction Price. Whichever is higher The differential amount, i.e. covering price and settlement price and also close out price shall be proportionately charged to the defaulting sellers. Allocation of price difference of auction price and settlement price and also close out amount to defaulting buyer/s Any profit out of such auction shall be retained by the Exchange and will not be passed on to the defaulting parties. If total auctioned quantity is lower than auctionable quantity, accepted/auctioned quantity will be allocated to the auction buyer/s. Un-auctioned quantity (i.e. remaining quantity that could not be auctioned) will be closed out on c) 5% below the closing price on the date of auction. or d) Lowest Auction Price. Whichever is lower The differential price i.e. settlement price and auction price and also close out price shall be

8 proportionately charged to the defaulting buyer/s. Pay-out of funds to original Sellers Pay-out of commodities to original Buyers Auction Price Default by the Auctionbuyer Default by the Auctionseller Conditions Any profit out of such auction shall be retained by the Exchange and will not be passed on to the defaulting parties. T+9 by 3:00 pm, to the tune of quantity auctioned provided that the auction (new) buyer has fulfilled his funds pay-in obligation. T+9 by 01:00 pm, to the tune of quantity auctioned provided that the auction (new) seller has fulfilled his commodities pay-in obligation. Auction price will be the weighted average price of all the bids accepted for this contract. If the member participating in the Auction fails to fulfill his funds pay-in obligation in time, his position will be closed 10% above the closing price on the Auction Pay in date, out of which 50% will go to the original seller and 50% will be retained by the Exchange. If the member participating in the Auction fails to fulfill his commodities pay-in obligation in time, his position will be closed 10% above the closing price on the Auction Pay in date out of which 50% will go to the original buyer and 50% will be retain by the exchange 1. Defaulting Buyer/s/Sellers will not be allowed to participate in the Auction process of that contract. 2. Defaulting buyer/seller will not be entitled to any credits, whatsoever. 3. The counter party member will be allowed to participate in the auction/covering. In case his bid is accepted then his position will be squared up and he will be entitled for the differential amount, if any. 4. The bid price of any or all bids, if in the opinion of the Exchange is found unreasonable or unrealistic, the Exchange, without assigning any reasons thereto, shall have the absolute right to reject such bid/s. 5. Offers, once submitted, cannot be cancelled but can be modified. 6. On acceptance of the Auction Buyer s/seller s bid/s, 20% of the bid amount will be blocked from the deposit with the Exchange.

9 Exchange s Decision The decision of the Exchange will be final and binding to all the Buyers as well as Sellers and the Auction participants. Further, the Exchange has the right to add, modify, delete any or all provisions mentioned above in the interest of the market and reserve the right to cancel the auction process at any time.