Contract Specifications for Refined Soy Oil (Applicable for contracts expiring in February 2015, April 2015, June 2015 and August 2015) Type of contract Name of commodity Ticker symbol Trading system Basis Unit of trading Delivery unit Maximum Order Size Quotation/base value Tick size Quality specification Futures Contract Refined Soy Oil SYOREFIDR NCDEX Trading System Ex-tank, Indore exclusive of Sales Tax/ VAT 5 MT 5 MT 500 MT Rs. per 10 Kg 5 Paise Refined Soy Oil with the following specifications: Moisture & insoluble impurities, % Max: 0.10 Color, " cell, Lovibond Y+5R, Max: 4 Refractive Index at 40C: 1.4650-1.4710 Specific Gravity at 30C 25/25: 0.917-0.921 Saponification Value: 189-195 Iodine Value (Wijs): 120-141 Unsaponifiable matter, % by mass, Max: 1.5 FFA, % Max: 0.25 Flash point, Pensky Martin Method, C, Min: 250 Acid Value Not more than 0.50 Phosphorous Not more than 0.02 Hexane Not more than 5 ppm Test for argemone oil shall be negative. It shall be clear, free from rancidity, adulterants, sediments, suspended and any other foreign matter, separated water, added colouring and flavouring substances and mineral oil Quantity variation +/- 2%
Delivery centre Indore (within a radius of 50 km from the municipal limits) As per directions of the Forward Markets Commission from time to time, currently: Mondays through Fridays: 10.00 A.M. to 11.30 / 11.55* P.M (*during US daylight saving period) Trading hours On the expiry date, contracts expiring on that day will not be available for trading after 5 P.M. The Exchange may vary above timing with due notice. 20 th day of the delivery month Due date/expiry date Delivery specification Closing of contract Opening of contracts No. of active contracts Price limit If 20 th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange. Seller can mark their delivery intention from E-8 to E-5 during the time intention marking period. If any intention is marked by Seller, then allocation would take place based on open position of the corresponding buyer as matched by the system on the expiry day. On the expiry of the contract, all outstanding positions not resulting in giving/taking of physical delivery of the commodity shall be closed out at the Final Settlement Price announced by the Exchange. Trading in any contract month will open on the 1st day of the month. If the 1st day happens to be a non-trading day, contracts would open on the next trading day. As per launch Calendar The DPL is (+/-) 4%. If 4% DPL is hit on a day, no trading will be allowed beyond 4%. However, trading will continue within (+/-) 4% DPL on that day. If a contract closes at 4%, then on the subsequent day, for all the contracts in the commodity, the DPL will be
(+/-) 4%, and if it is hit, the DPL will be further relaxed by 2% with a cooling off period of 15 minutes in between. Trading will not be allowed during the cooling off period. If 4+2% DPL is also hit, no trading will be allowed beyond 6%. However, trading will continue within (+/-) 6% DPL on that day. If a contract closes at 6%, then on the subsequent day/s, for all contracts in the commodity, the DPL will be 4% and if it is hit, the DPL will be further relaxed by 2% with a cooling off period of 15 minutes in between. Trading will not be allowed during the cooling off period. Once all contracts in the commodity close below 4+2% DPL i.e. below 6% on the subsequent day/s, the DPL on following day/s will be reset to (+/-) 4% for all contracts in the commodity. If the DPL is hit in a contract of a commodity, then trading will be stopped for 15 minutes only in that contract of the commodity and trading will continue in other contracts of that commodity as usual. The DPL on the launch (first) day of new contract shall be as per the circular no. NCDEX/RISK- 027/2011/284 dated September 15, 2011. The position limits will be applicable on Exchange wise basis Member-wise: 3,50,000 MT or 20% of the total market wide open position in the commodity, whichever is higher Position limits Client-wise: 35,000 MT or 5% of the total market wide open position in the commodity, whichever is higher The above limits will not apply to bona fide hedgers. For bona fide hedgers, the Exchange will, on a case to case basis, decide the hedge limits. Please refer to Circular No. NCDEX/CLEARING-018/2014/228 dated July 22, 2014. For near month contracts The following limits would be applicable from 1 st of every month in which the contract is due to expire. If
1 st happens to be a non-trading day, the near month limits would start from the next trading day. Member-wise: 1,75,000 MT or 20% of the total near month market wide open position in the commodity, whichever is higher Client-wise: 17,500 MT or 5% of the total near month market wide open position in the commodity, whichever is higher Premium/Discount Delivery option Special margin Final Settlement Price None Seller s option through direct delivery In case of unidirectional price movement/ increased volatility, an additional/ special margin at such other percentage, as deemed fit by the Regulator/Exchange, may be imposed on the buy and the sell side or on either of the buy or sell sides in respect of all outstanding positions. Reduction/ removal of such additional/ special margins shall be at the discretion of the Regulator/Exchange. The Final Settlement Price (FSP) shall be arrived at by taking the simple average of the last polled spot prices of the last three trading days viz., E0 (expiry day), E-1 and E-2. In the event of the spot prices for any one of the E-1 and E-2 is not available, the spot price of E-3 would be used for arriving at the average. In case the spot prices are not available for both E-1 and E-2, then the average of E0 and E-3 (two days) would be taken. If all the three days prices viz., E-1, E-2 and E-3 are not available, then only one day s price viz., E0 will be taken as the FSP. Minimum Initial Margin 5%
Contract Launch Calendar Contract Launch month Contract expiry month September 2014 February 2015 October 2014 April 2015 November 2014 June 2015 December 2014 August 2015 January 2015 No Launch
Contract Specification Refined Soy Oil futures contract (Applicable for contracts expiring in October 2015 and thereafter) Type of contract Name of commodity Ticker symbol Trading system Basis Unit of trading Delivery unit Maximum Order Size Quotation/base value Tick size Quality specification Futures Contract Refined Soy Oil SYOREFIDR NCDEX Trading System Ex-tank, Indore exclusive of Sales Tax/ VAT 5 MT 5 MT 500 MT Rs. per 10 Kg 5 Paise Refined Soy Oil with the following specifications: Moisture & insoluble impurities, % Max: 0.10 Color, Lovibond Y+5R, 5 1/4 cell Max: 12 Unit Refractive Index at 40C: 1.4650-1.4710 Specific Gravity at 30C 25/25: 0.917-0.921 Saponification Value: 189-195 Iodine Value (Wijs): 120-141 Unsaponifiable matter, % by mass, Max: 1.5 FFA, % Max: 0.25 Flash point, Pensky Martin Method, C, Min: 250 Acid Value Not more than 0.50 Phosphorous Not more than 0.02 Hexane Not more than 5 ppm Test for argemone oil shall be negative. It shall be clear, free from rancidity, adulterants, sediments, suspended and any other foreign matter, separated water, added colouring and flavouring substances and mineral oil Quantity variation +/- 2%
Delivery centre Indore (within a radius of 50 km from the municipal limits) As per directions of the Forward Markets Commission from time to time, currently: Mondays through Fridays: 10.00 A.M. to 11.30 / 11.55* P.M (*during US daylight saving period) Trading hours On the expiry date, contracts expiring on that day will not be available for trading after 5 P.M. The Exchange may vary above timing with due notice. 20 th day of the delivery month Due date/expiry date Delivery specification Closing of contract Opening of contracts No. of active contracts Price limit If 20 th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange. Seller can mark their delivery intention from E-8 to E-5 during the time intention marking period. If any intention is marked by Seller, then allocation would take place based on open position of the corresponding buyer as matched by the system on the expiry day. On the expiry of the contract, all outstanding positions not resulting in giving/taking of physical delivery of the commodity shall be closed out at the Final Settlement Price announced by the Exchange. Trading in any contract month will open on the 1st day of the month. If the 1st day happens to be a non-trading day, contracts would open on the next trading day. As per launch Calendar The DPL is (+/-) 4%. If 4% DPL is hit on a day, no trading will be allowed beyond 4%. However, trading will continue within (+/-) 4% DPL on that day. If a contract closes at 4%, then on the subsequent day, for all the contracts in the commodity, the DPL will be
(+/-) 4%, and if it is hit, the DPL will be further relaxed by 2% with a cooling off period of 15 minutes in between. Trading will not be allowed during the cooling off period. If 4+2% DPL is also hit, no trading will be allowed beyond 6%. However, trading will continue within (+/-) 6% DPL on that day. If a contract closes at 6%, then on the subsequent day/s, for all contracts in the commodity, the DPL will be 4% and if it is hit, the DPL will be further relaxed by 2% with a cooling off period of 15 minutes in between. Trading will not be allowed during the cooling off period. Once all contracts in the commodity close below 4+2% DPL i.e. below 6% on the subsequent day/s, the DPL on following day/s will be reset to (+/-) 4% for all contracts in the commodity. If the DPL is hit in a contract of a commodity, then trading will be stopped for 15 minutes only in that contract of the commodity and trading will continue in other contracts of that commodity as usual. The DPL on the launch (first) day of new contract shall be as per the circular no. NCDEX/RISK- 027/2011/284 dated September 15, 2011. The position limits will be applicable on Exchange wise basis Member-wise: 3,50,000 MT or 20% of the total market wide open position in the commodity, whichever is higher Position limits Client-wise: 35,000 MT or 5% of the total market wide open position in the commodity, whichever is higher The above limits will not apply to bona fide hedgers. For bona fide hedgers, the Exchange will, on a case to case basis, decide the hedge limits. Please refer to Circular No. NCDEX/CLEARING-018/2014/228 dated July 22, 2014. For near month contracts The following limits would be applicable from 1 st of every month in which the contract is due to expire. If
1 st happens to be a non-trading day, the near month limits would start from the next trading day. Member-wise: 1,75,000 MT or 20% of the total near month market wide open position in the commodity, whichever is higher Client-wise: 17,500 MT or 5% of the total near month market wide open position in the commodity, whichever is higher Premium/Discount Delivery option Special margin Final Settlement Price None Seller s option through direct delivery In case of unidirectional price movement/ increased volatility, an additional/ special margin at such other percentage, as deemed fit by the Regulator/Exchange, may be imposed on the buy and the sell side or on either of the buy or sell sides in respect of all outstanding positions. Reduction/ removal of such additional/ special margins shall be at the discretion of the Regulator/Exchange. The Final Settlement Price (FSP) shall be arrived at by taking the simple average of the last polled spot prices of the last three trading days viz., E0 (expiry day), E-1 and E-2. In the event of the spot prices for any one of the E-1 and E-2 is not available, the spot price of E-3 would be used for arriving at the average. In case the spot prices are not available for both E-1 and E-2, then the average of E0 and E-3 (two days) would be taken. If all the three days prices viz., E-1, E-2 and E-3 are not available, then only one day s price viz., E0 will be taken as the FSP. Minimum Initial Margin 5%
Contract Launch Calendar Contract Launch month Contract expiry month February 2015 October 2015 March 2015 No Launch April 2015 November 2015 May 2015 December 2015 Members and market participants who enter into Buy and Sell transactions may please note that they need to be aware of all the factors that go into the mechanism of trading and clearing, as well as all provisions of the Exchange's Bye Laws, Rules, Regulations, Product Notes, circulars, directives, notifications of the Exchange as well as of the Regulators, Governments and other authorities. It is clarified that it is the sole obligation and responsibility of the Members and market participants to ensure that apart from the approved quality standards stipulated by the Exchange, the commodity deposited / traded / delivered through the Seller s specified storage tanks is in due compliance with the applicable regulations laid down by authorities like Food Safety Standard Authority of India, AGMARK, BIS, Orders under Packaging and Labelling etc., as also other State/Central laws and authorities issuing such regulations in this behalf from time to time, including but not limited to compliance of provisions and rates relating to Sales Tax, Value Added Tax, APMC Tax, Mandi Tax, LBT, Octroi, Excise duty, stamp duty, etc. as applicable from time to time on the underlying commodity of any contract offered for deposit / trading / delivery and the Exchange shall not be responsible or liable on account of any non-compliance thereof.
Annexure IV - Delivery mechanism (Direct Delivery Sellers Warehouse Model) Applicable for contracts expiring in February 2015 and thereafter 1. The seller can mark delivery intention under Direct delivery from E-8 to E-5 2. Funds Pay-in under Direct delivery option will happen on E+2 and funds payout would happen on E+12 3. The settlement will be completed based on the confirmations by assayer which shall be binding on parties. The process flow for settlement under direct delivery would be as follows: A) E-8 to E-5 : 1. For Direct Delivery option, Sellers can mark their delivery intention from E-8 to E-5 during the prescribed time of intention marking period. If any intention is marked by Seller, then allocation would take place based on open position of the corresponding buyer as matched by the system on the day of expiry. 2. The seller would be required to give their intention/notice to the extent of his open position, at least 5 trading days prior to the expiry of the contracts. Accordingly, the window for acceptance of delivery requests will be open for 3 working days. The window will close 5 days prior to the expiry date of the contract. 3. Members giving delivery requests for the commodities are not permitted to square off their open positions once such request is made. A penalty of 5% of final settlement price on the position squared off, if any, will be levied besides any further action as deemed fit by the Exchange. B) E+1 1. The details of allocation displayed to buyers and sellers so that required information can be updated. Details of tax settlement and Storage Tank details will be uploaded by buyers and sellers through NCFE via their respective members. The detail of information required is given in point C (E+2). 2. Buyer shall appoint an assayer from list of empaneled assayers provided by the Exchange. 3. Failure to appoint assayer by buyer in required time as prescribed by Exchange procedures shall result in buyers default 4. The buyer has to compulsorily get the goods assayed by the allotted assayer. The seller would pay the assaying charges.
C) E+2 1. Pay in of funds from allocated Buyers on basis grade. 2. Buyer will give details for tax settlement, and correspondence address. 3. Seller will give details of Tank at delivery location & correspondence address. D) E+3 to E+11; Assaying and Lifting Period 1. Depending on the total allocated quantity, Assayer will inform both the buyer and seller of the delivery schedule, so that the assaying results are available to Exchange latest by EOD on E+11. 2. Buyer will lift the goods from the seller s informed location. 3. All Buyers who have been allocated deliveries would necessarily have to get goods assayed & lifted, if found within the specifications by the Assayer, and follow the process as prescribed by the Exchange. In case the buyer fails to lift goods by E+11, it will be considered as Buyer s default to the extent of goods not lifted and applicable penalties shall be levied. 4. Assayer will be present at seller s informed location, according to the delivery schedule, and will conduct assaying of goods. 5. Assayer will upload the report of quality and quantity of goods and accordingly accept/reject the goods, depending on whether they meet Exchange specified quality parameters. Assayer shall carry out the testing for the parameters as per contract specifications alone and compliance of any other parameters not covered in the specifications shall be the responsibility of the respective seller. 6. All Premium/ Discount related to quality, based on the report of the buyer appointed assayer, would be applicable. 7. In case the goods tendered for delivery, on assaying, fails to conform to the contract specifications, it would constitute a Seller s default. 8. Sellers & Buyers or their representatives have an option to supervise the assaying process. 9. Assayer will give final confirmation of completion of physical delivery. 10. The Assayer will confirm the quantity delivered by Seller and quantity received by Buyer based on which Buyer s/ Seller s default will be computed. 11. The entire process needs to be completed by E+11 EOD.
12. All risk and costs associated with storage of goods in the Seller s Storage Tank, for the entire duration of assaying, i.e. till the time settlement is completed, would be borne by the Seller. E) E+12 (Pay Out) Case 1 the goods are accepted and completion of delivery confirmed by Assayer Pay out to seller, Settlement of premium discount for quality & close out shortages (if any) Tax details will be passed on to Seller to be updated Case 2 Sellers default In case of Seller s default, applicable penalties shall be levied Case 3 Buyers default In case of Buyer s default, applicable penalties shall be levied F) E+13 Settlement of Tax Seller issues Invoice Delivery Defaults Seller s Default - This could happen under the following situations and will be confirmed by Exchange appointed Assayer Case 1: Seller fails to give details of Storage Tank location or fails to arrange goods after allocation under Direct delivery Case 2: The seller arranges only for partial quantity, then to the extent of quantity not arranged by Seller. Case 3: The lot delivered by Seller fails on assaying Case 4: The Storage Tank from which sample was taken by the buyer with a buyer appointed assayer will be sealed. If the seal of this tank is later found to have been tampered or damaged in any way, on the day of lifting. Case 5: If the lots could not be lifted by the Buyer within the stipulated time frame, due to established issues at the Seller s end, then penalty for the proportionate un lifted lots would be imposed on Seller. Assayer will confirm on same. Case 6: Seller fails to get assaying done within the stipulated time frame, i.e. if the report is not submitted in NCFE by EOD on E+11 for whatsoever reasons.
In case of seller default after allocation (i.e. E+1 to E+11), the prescribed penalty will be 3% as per below; a) 1.75 % component of the penalty shall be deposited in the Settlement Guarantee Fund of the Exchange; b) 1 % component of the penalty shall go to the Buyer who was entitled to receive delivery; and c) Balance 0.25 % component of penalty shall be retained by the Exchange towards administrative expenses. This penalty shall be settled on E+12 The difference between the Final Settlement Price (FSP) and the average of three highest of the last spot prices of 12 (Twelve) succeeding days after the expiry of contract (E+1 to E+12 days); if the average spot price so determined is higher than FSP, the same shall also be charged from the seller. This differential penalty shall be settled on E+13 and will go to the Buyer. Buyer s Default - This could happen under the following situations Case 1: Buyer fails to get assaying done within the stipulated time frame, i.e. if the report is not submitted in NCFE by EOD on E+11 for whatsoever reasons Case 2: Buyer fails to lift some or all of the lots within lifting period (E+3 to E+11). Assayer will confirm on same. Case 3: Buyer fails to appoint assayer in required time as prescribed by Exchange procedures. This shall result in buyer s default 1. the buyer would be penalized and 3% penalty will be levied on buyer and will be used as under: a) 1.75% component of the penalty shall be deposited in the Settlement Guarantee Fund of the Exchange; b) 1% component of the penalty shall go to the Seller who was supposed to give delivery; and c) Balance 0.25% component of penalty shall be retained by the Exchange towards administrative expenses This penalty shall be settled on E+12 The difference between the Final Settlement Price (FSP) and the average of three lowest of the last spot prices of 12 (Twelve) succeeding days after the expiry of contract (E+1 to E+12 days); if the average spot price so determined is lower than FSP, the same shall also be charged from the buyer. This differential penalty shall be settled on E+13 and will go to the Seller.
The delivery pay-in taken from the Buyer shall be reversed on E+12 in case of Buyer s default and Seller s default and appropriate penalties shall be levied. Other Important Points to be noted by the participants Seller can get the goods pre-tested from any of the empanelled assayer before tendering physical delivery as a precaution Seller and Buyer can mutually agree to continue to store the goods in the Seller s Storage Tank even after settlement, but for the purpose of settlement it would be treated as goods lifted by the Buyer, i.e constructive delivery/possession to Buyer.