NATIONAL COMMODITY & DERIVATIVES EXCHANGE LIMITED Circular to all trading and clearing members of the Exchange Circular No : NCDEX/FORWARD-005/2014/286 Date : September 23, 2014 Subject : Launch of Forward contracts Maize and Sugar The Exchange is pleased to announce that, as per the Bye-laws, Rules and Regulations of the Exchange and with the approval of the Forward Markets Commission, forward contracts in Maize and Sugar/Raw Sugar would be available for trading from September 25, 2014. Design for Maize and Sugar forward contracts are given in Annexure I and Annexure II respectively. The contracts and the transactions therein will be subject to Rules, Bye Laws and Regulations of the Exchange and circulars issued by the Exchange as well as directives, if any, issued from time to time by the Forward Markets Commission. For and on behalf of National Commodity & Derivatives Exchange Limited Abhishek Govilkar Vice President- Business For further information / clarifications, please contact 1. Mr. Tarun Katoch on phone : 09574117888 2. Customer Service Group on phone: (022) 6640 6609-12, (011) 2334 4795 3. Customer Service Group by e-mail to : askus@ncdex.com 1 / 12
Annexure I Design Maize forward contract Type of contract Symbol Name of Commodity Forward MZEFPT30, MZEFPT60, MZEFPNT30, MZEFPNT60, MZERPT, MZERPNT Maize Duration of Forward Transferable Specific Delivery (TSD) For Reference price contract Maximum : 180 Calendar days Maximum of 60 Calendar days Non-Transferable Specific Delivery (NTSD) Traded Price Basis Price Quality Basis For Reference price contract Minimum: 12 Calendar days Maximum : 180 Calendar days Minimum: 12 Calendar days Maximum of 60 Calendar days For Reference price contract. Premium / Discount over Basis Price Basis Price For Reference price contract. NCDEX Maize futures contract Price agreed at time of trade Bid & Offer Parameters Pricing Date Mutually Agreed Location - Mutually Agreed Packaging- Mutually Agreed 2 / 12
Minimum Trading / Delivery Unit Moisture Mutually Agreed Maximum Value Broken/Damage - Mutually Agreed Grain Count- Mutually Agreed Foreign Matter Mutually Agreed Note: All mutually agreed parameters should not be violative of any applicable law and compliance of all Laws including that of FSSAI standards in that regard will be that of the respective Seller and Buyer and the Exchange shall not be responsible or liable in any manner whatsoever 10 MT Transferable Specific Delivery (TSD) For Reference price As agreed between buyer and seller prior to trade but not more than 180 Calendar days from date of trade For Fixed price As agreed between buyer and seller but not more than 60 Calendar days. Pricing Date Non-Transferable Specific Delivery (NTSD) For Reference price As agreed between buyer and seller prior to trade but not less than 12 Calendar days from date of trade and not more than 180 Calendar days from date of trade For Fixed price As agreed between buyer and seller but not less than 12 Calendar days and not more than 60 Calendar days. 3 / 12
Delivery location/point Minimum Bid Quantity Quotation/base value Tick size Buyer Initial Margin Approved rake point / truck & Exchange approved warehouse as mutually agreed within 100 km of agreed location. 10 MT and multiples of 10 MT thereafter Rs per quintal Re 1/- per quintal Reference Price s: 5 % of the trade value determined based on the Trade Price and Basis Price Fixed Price s: 7.5 % of the trade value in case of priced contracts of duration upto 30 days and 10 % for duration beyond 30 days and upto 60 days. Seller Initial Margin Reference Price s: 5 % of the trade value determined based on the Trade Price and Basis Price Fixed Price s: 7.5 % of the trade value in case of priced contracts of duration upto 30 days and 10 % for duration beyond 30 days and upto 60 days. Incremental Margin Reference Price s: Recomputed every Monday and the Exchange would make a call for Incremental Margin based on price movement. In case the linked futures price has moved more than 3 % from the day of trade, incremental margin would be recomputed earlier than the next Monday and if required at greater frequency intervals. 4 / 12
Delivery logic Settlement Delivery Margin Buyer Pay-in Delivery of goods Fixed Price s: In case of fixed price contracts, the Exchange shall intimate the incremental margins to be brought in on the outstanding obligations based on the volatility and at a frequency determined by the Exchange. Compulsory Delivery 1. Transferable Specific Delivery (TSD - End of day position shall result in delivery) 2. Non-Transferable Specific Delivery (NTSD) The initial margin and incremental margin blocked, if any would be converted to delivery margin on the day of pricing the contract. Second working day from pricing date 10 working days from pay in Buyer / Seller Default 90 % of the margins blocked (Initial and Incremental) from defaulting party will be passed to the counter party as compensation and 10 % of the margins blocked (Initial and Incremental) will be retained as transaction charges by the Exchange. Quantity Variation +/- 5% Trade Timings Price Limits Transaction Charges Monday to Friday 10 A.M to 8 P.M. No price Limits Both Buyer and Seller shall pay transaction charges to the exchange. The transaction charges are 0.10% of trade value plus applicable service tax. 5 / 12
The participants shall be liable for all taxes and other regulatory requirements of State/ Central laws in relation to the forward contracts undertaken by them. As this is a compensation guarantee contract it is deemed that the Participant/s entering into this contract has/have indemnified the Exchange (NCDEX), protect, and hold harmless the Exchange, its directors, officers, affiliates, employees and agents from and against any and all losses, liabilities, judgments, suits, actions, proceedings, claims, damages, costs (including legal costs) resulting from the trade in the Forward contracts undertaken by them on the Exchange platform. In case either the buyer or the seller fails to provide towards an incremental margin call, the concerned party shall be granted a grace period of 2 additional working days. In case the buyer / seller has still not provided for the same, the trade shall be deemed to be cancelled and the margin blocked amount shall be forfeited. 90 % of such amount collected from the defaulting party shall be paid as compensation to the counterparty and 10 % shall be retained by the Exchange as transaction charges. 6 / 12
Annexure II Design Sugar/Raw Sugar forward contract Type of contract Symbol Name of Commodity Forward SUGFPT30, SUGFPT60, SUGFPNT30, SUGFPNT60, SUGRPT, SUGRPNT, RSGFPT30, RSGFPT60, RSGFPNT30, RSGFPNT60, RSGRPT, RSGRPNT Sugar/ Raw Sugar Duration of Forward Transferable Specific Delivery (TSD) For Reference price contract Maximum : 180 Calendar days Maximum of 60 Calendar days Non Transferable Specific Delivery (NTSD) For Reference price contract Minimum: 12 Calendar days Maximum : 180 Calendar days Traded Price Basis Price Minimum: 12 Calendar days Maximum of 60 Calendar days For Reference price contract. Premium / Discount over Basis Price Basis Price For Reference price contract. NCDEX Sugar futures contract Price agreed at time of trade 7 / 12
Quality Basis Bid & Offer Parameters Pricing Date - Mutually Agreed Name of Mill & Location Mutually Agreed Packaging Mutually Agreed Moisture - Mutually Agreed Maximum Value ICUMSA - < or = Mutually Agreed ICUMSA VALUE Grade Mutually agreed i.e. M or S Crop Year - Mutually Agreed Fixed parameters : Polarisation 99.80% Min Sulphur Content - 70 PPM Max Grain Size : M Grade Medium with > or = 85% retention on 1.18 mm sieve size as determined by the methods prescribed in IS:498-2003 S Grade Small with > or = 70% retention on 600 micron sieve size as determined by the methods prescribed in IS:498-2003 BID & Offer Parameters (Raw Sugar) Pricing Date - Mutually Agreed Name of Mill & Location Mutually Agreed Packaging Mutually Agreed Moisture - Mutually Agreed Maximum Value ICUMSA - < or = Mutually Agreed ICUMSA VALUE Crop Year - Mutually Agreed Polarisation Mutually Agreed Note: All mutually agreed parameters should not be violative of any applicable law and compliance of all Laws including that of FSSAI standards in that regard 8 / 12
Minimum Trading / Delivery Unit Pricing Date will be that of the respective Seller and Buyer and the Exchange shall not be responsible or liable in any manner whatsoever. 10 MT Transferable Specific Delivery (TSD) For Reference price As agreed between buyer and seller prior to trade but not more than 180 Calendar days from date of trade For Fixed price As agreed between buyer and seller but not more than 60 Calendar days. Non Transferable Specific Delivery (NTSD) For Reference price As agreed between buyer and seller prior to trade but not less than 12 Calendar days from date of trade and not more than 180 Calendar days from date of trade For Fixed price As agreed between buyer and seller but not less than 12 Calendar days and not more than 60 Calendar days. Delivery location Minimum Bid Quantity Quotation/base value Tick size Rake point (FOR)/Truck (FOT) and Exchange approved warehouse as mutually agreed within 100 km of agreed location. 10 MT and multiples of 10 MT thereafter Rs per quintal Re 1/- per quintal 9 / 12
Buyer Initial Margin Seller Initial Margin Incremental Margin Delivery logic Settlement Delivery Margin Buyer Pay-in Delivery of goods Reference Price s: 5% of the trade value determined based on the trade price and basis price Fixed Price s: 7.5 % of the trade value in case of priced contracts of duration upto 30 days and 10 % for duration beyond 30 days and upto 60 days. Reference Price s: 5 % of the trade value determined based on the Trade Price and Basis Price Fixed Price s: 7.5 % of the trade value in case of priced contracts of duration upto 30 days and 10 % for duration beyond 30 days and upto 60 days. Reference Price s: Recomputed every Monday and the Exchange would make a call for Incremental Margin based on price movement. In case the linked futures price has moved more than 3 % from the day of trade, incremental margin would be recomputed earlier than the next Monday and if required at greater frequency intervals. Fixed Price s: In case of fixed price contracts, the Exchange shall intimate the incremental margins to be brought in on the outstanding obligations based on the volatility and at a frequency determined by the Exchange. Compulsory Delivery 1. Transferable Specific Delivery (TSD - End of day position shall result in delivery) 2. Non Transferable Specific Delivery (NTSD) The initial margin and incremental margin blocked, if any would be converted to delivery margin on the day of pricing the contract. Second working day from pricing date 10 working days from pay in 10 / 12
Buyer / Seller Default 90 % of the margins blocked (Initial and Incremental) from defaulting will be passed to the counter party as compensation and 10 % of the margins blocked (Initial and Incremental) will be retained as transaction charges by the Exchange. Quantity Variation +/- 5% Trade Timings Price Limits Transaction Charges Monday to Friday 10 A.M to 8 P.M. No price Limits Both Buyer and Seller shall pay transaction charges to the exchange. The transaction charges are 0.05% of trade value plus available service tax. The participants shall be liable for all taxes and other regulatory requirements of State/ Central laws in relation to the forward contracts undertaken by them. As this is a compensation guarantee contract it is deemed that the Participant/s entering into this contract has/have indemnified the Exchange (NCDEX), protect, and hold harmless the Exchange, its directors, officers, affiliates, employees and agents from and against any and all losses, liabilities, judgments, suits, actions, proceedings, claims, damages, costs (including legal costs) resulting from the trade in the Forward contracts undertaken by them on the Exchange platform. In case either the buyer or the seller fails to provide towards an incremental margin call the concerned party shall be granted a grace period of 2 additional working days. In case the buyer / seller has still not provided for the same, the trade shall be deemed to be cancelled and the margin blocked amount shall be forfeited. 90 % of such amount collected from the defaulting party shall be paid as compensation to the counterparty and 10 % shall be retained by the Exchange as transaction charges. 11 / 12
Symbol Description Commodity Symbol Symbol Description Sugar Fixed Price Transferrable Upto 30 Days SUGFPT30 Sugar Fixed Price Transferrable Upto 60 Days SUGFPT60 Sugar Fixed Price Non-Transferrable Upto 30 Days SUGFPNT30 Sugar Fixed Price Non-Transferrable Upto 60 Days SUGFPNT60 SUGRPT Sugar Reference Price Transferrable SUGRPNT Sugar Reference Price Non-Transferrable RAW RAW RAW RAW RAW RAW RSGFPT30 RSGFPT60 RSGFPNT30 RSGFPNT60 RSGRPT RSGRPNT Raw Sugar Fixed Price Transferrable Upto 30 Days Raw Sugar Fixed Price Transferrable Upto 60 Days Raw Sugar Fixed Price Non-Transferrable Upto 30 Days Raw Sugar Fixed Price Non-Transferrable Upto 60 Days Raw Sugar Reference Price Transferrable Raw Sugar Reference Price Non-Transferrable MAIZE MAIZE MAIZE MAIZE MZEFPT30 MZEFPT60 MZEFPNT30 MZEFPNT60 Maize Fixed Price Transferrable Upto 30 Days Maize Fixed Price Transferrable Upto 60 Days Maize Fixed Price Non-Transferrable Upto 30 Days Maize Fixed Price Non-Transferrable Upto 60 Days MAIZE MZERPT Maize Reference Price Transferrable MAIZE MZERPNT Maize Reference Price Non-Transferrable 12 / 12