... CHAPTER 1 - TRADING PARAMETERS... 3 Authority... 3 Unit of Trading... 3 Months Traded In... 3 Tick Size... 3 Basis Price... 3 Unit for Price Quotation... 3 Hours of Trading... 3 Last Day of Trading... 3 Mark to Market... 3 Position limits... 3 Margin Requirements... 4 Pre-Expiry Additional Margin... 4 Special Margin... 4 Delivery Margins... 4 Delivery Default Penalty... 4 Penalty for cash settlement... 5 Arbitration... 5 CHAPTER 2 - DELIVERY PROCEDURES... 6 Unit of Delivery... 6 Delivery Size... 6 Delivery Requests... 6 Delivery Allocation... 6 Actual Delivery... 6 Approved Warehouse... 7 Quality Standards... 7 Packaging... 7 Standard Allowances... 7 Weight... 8 Good/ Bad delivery Norms... 8 Soybean seed Sampling... 8 Empanelled Assayer... 8 Testing Procedure... 8 Assayer Certificate/ Quality Testing Report... 8 Validity period... 9 Electronic transfer... 9 Charges... 9 Duties & levies... 10 Stamp Duty... 10 Taxes... 10 Premium / Discount... 10 CHAPTER 3 - CLEARING AND SETTLEMENT... 12 Daily Settlement... 12 Daily Settlement Prices... 12 Final Settlement Prices... 12 Spot Prices... 12 Dissemination of Spot Prices... 12 Pay in and Pay out for Daily Settlement / Final Settlement... 12 Pay in and Pay out for final physical settlement... 13 Tender Date - T... 13 Expiry Date... 13 Early Payin of Commodities... 14 Supplementary Settlement for Taxes... 14 Exhibit 1 CONTRACT SPECIFICATIONS OF SOYBEAN SEED... 15 Exhibit 2 - Warehouse & Assayer Address Details... 28-1-
Exhibit 3 - Good / Bad delivery norms for acceptance of Commodity at warehouse 29 Exhibit 4 Specimen of Soybean seed Testing Report... 33 Exhibit 5 - Grade Matrix for Soybean seed... 34-2-
CHAPTER 1 - TRADING PARAMETERS Authority Trading of Soybean seed 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 Soybean seed 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 Soybean seed futures is available in two quality specifications i.e. Soybean A applicable to all contracts expiring in the months of September October, November, December and January where as Soybean B is applicable for all contracts expiring in the months of February, March, April, May, June, July and August. Tick Size The tick size of the price of Soybean seed shall be 50 Paisa. Basis Price The basis price of Soybean seed shall be Ex-warehouse Indore, exclusive of sales taxes. Unit for Price Quotation The unit of price quotation for Soybean seed shall be in Rupees per quintal. The basis for Soybean seed traded as Soybean is exclusive of sales tax. Hours of Trading As per directions of the Forward Markets commission from time to time, currently: Mondays through Fridays - 10 a.m. to 05.00 p.m. Saturdays - 10 a.m. to 02.00 p.m. The Exchange may vary the above timings with due notice. Last Day of Trading Last day of trading shall be 20th day of the delivery month. If 20th happens to be a holiday, a Saturday or a Sunday, then the due date shall be the immediately preceding trading day of the Exchange, which is not a Saturday. Mark to Market The outstanding positions in futures contract in Soybean seed would be marked to market daily based on the Daily Settlement Price (DSP) as determined by the Exchange. Position limits Limits on open positions for aggregate as well as near month will be applicable on Exchange wise basis. Member level: 150,000 MT or 15 % of market wide open interest in the commodity, whichever is higher Client level: 30,000 MT -3-
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/TRADING-100/2005/219 dated October 20, 2005. Near month limit (The following limits would be applicable from the 1st of every month in which the contract is due to expire. If 1st happens to be a non trading day, the near month limits would start from the next trading day). Member level: 40,000 MT or 15% of the near month Market wide open interest in the commodity, whichever is higher Client level: 8,000 MT Margin Requirements NCDEX will use Value at Risk (VaR) based margin calculated at 99.95% 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 Soybean seed contract. The additional margin will be added to the normal exposure margin and will be increased by 3% everyday for the last 5 trading days of the contract. Special Margin In case of additional volatility, a special margin at such other percentage, as deemed fit, will be imposed in respect of outstanding positions, which will remain in force as long as the volatility exists, after which the special margin may be relaxed. Delivery Margins In case of positions materializing into physical delivery, delivery margins will be charged for each commodity to mitigate the risks arising thereof. The delivery margins charged would be computed as look ahead period ( N days) VaR margins or a fixed percentage delivery margin, whichever is higher. For further details, participants can refer to circular no. NCDEX/RISK-004/2013/073 dated March 12, 2013. Delivery Default Penalty The penalty structure for failure to meet delivery obligations by the sellers is as follows: Total amount of penalty = 2.5 % + the difference between the Final Settlement Price (FSP) and the spot price prevailing on the last day of pay-in/pay-out of the expired contract, if the said spot price is higher than FSP; else this component will be zero. The 2.5 % penalty collected as mentioned above shall be used as follows: a) 2 % component of the penalty shall be deposited in the Investor Protection Fund of the Exchange; b) 0.5 % component of the penalty shall go to the opposite party; and c) If the spot price on the last day of pay-in/pay-out of the expired contract is higher than the FSP, then the difference between the FSP and the spot price prevailing on the said latter day shall also go to the opposite party. -4-
Buyers defaults are not permitted. The amount due from the buyers shall be recovered from the buyer as Pay in shortage together with prescribed charges. Exchange shall have right to sell the goods on account of such Buyer to recover the dues and if the sale proceeds are insufficient, the Buyer would be liable to pay the balance. A seller who has got requisite stocks in the Exchange Approved warehouses is not allowed to default and any such delivery default by seller would be viewed seriously and the Exchange shall take suitable penal / disciplinary action against such members over and above the prescribed penalty as enumerated above. Please refer circular no. NCDEX/TRADING-091/2007/235 dated October 04, 2007 & NCDEX/TRADING 097/2007/247 dated October 17, 2007. 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 Soybean is prescribed at 0.5%. 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. -5-
CHAPTER 2 - DELIVERY PROCEDURES Unit of Delivery The unit of delivery for Soybean seed shall be 10 MT. Delivery Size Delivery is to be offered and accepted in lots of 10 MT Net or multiples thereof. A quantity variation of +/- 2% is permitted as per contract specification. Delivery Requests The procedure for Soybean Seeds delivery is based on the contract specifications as per Exhibit I. 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. The delivery request for Soybean contracts will be on staggered basis where tender period would start on the 11 th of every month in which the contract is due to expire. In case 11 th happens to be a Saturday, a Sunday or a holiday at the Exchange, the tender period would start from the next working day. During the Tender period, if any delivery is tendered by seller, the corresponding buyer having open position and matched as per process put in place by the Exchange, shall be bound to settle by taking delivery from the delivery centre where the seller has delivered same. The sellers can give their intention to give delivery during the tender period upto the expiry of the contract. If a seller, who has given intentions to deliver, fails to meet their respective obligations, the penalty structure will be as per the circular no. NCDEX/TRADING-091/2007/235 dated October 04, 2007 & NCDEX/TRADING 097/2007/247 dated October 17, 2007. Delivery Allocation The Exchange would then compile delivery requests received from members during the Tender period as specified in Exhibit 1. The buyers / sellers who have to receive / give delivery would be notified on the same day after the close of trading hours. Delivery of Soybean is to be accepted by buyers at the Approved warehouse where the seller effects delivery in accordance with the contract specifications. All open positions of those sellers who do not provide required information for physical delivery shall be settled in cash with penalties. Actual Delivery Where Soybean seed is sold for delivery in a specified month, the seller must have requisite electronic credit of such Soybean seed 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 comtrack account. However, the buyer must take actual physical delivery of Soybean seed before expiry of the validity date as indicated in the quality test report/assayer s Certificate of the Assayer. -6-
Approved Warehouse NCDEX has approved warehouses for receipt and delivery of Soybean seed. Soybean seed will only be received at and delivered from the NCDEX Approved warehouses. The details of the NCDEX Approved warehouses are as per Exhibit 2. The Soybean seed received at the NCDEX Approved warehouse will be tested and certified by NCDEX empanelled Assayer before acceptance as good delivery in the warehouse. Likewise, Soybean seed delivered to buyers will be from the Approved warehouse only. Quality Standards The contract quality for delivery of Soybean seed futures contracts made under NCDEX Regulations shall be Soybean seed conforming to the quality specification indicated in the contract specification as per Exhibit 1. 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. Packaging Soybean seed should be delivered in 50 kg, 91 Kg or 100 kg gross weight basis in new or sound and unmended Jute bags without any patches. Standard Allowances Standard allowance deducted per validation of quality on account of sampling and spillage for the goods deposited from May 03, 2012 will be as given in the table: Soybean A (Moisture basis of 10%, acceptable upto 12%), applicable for the months of September, October, November, December & January. Month of deposit ( 20 th of previous month to 19 th of the month) FED (no. of months) Standard deduction at the time of fresh deposits Standard deduction at the time of first revalidation Standard deduction at the time of second revalidation September - - - - - October 4 0.75 NA NA 0.75 November 3 0.75 NA NA 0.75 December 2 0.5 NA NA 0.5 January 1 0.5 NA NA 0.5 Total deductions (% of weight) Soybean B (Moisture basis of 8%, acceptable upto 10%), applicable for the months of February, March, April, May, June, July and August. Month of deposit ( 20 th of previous month to to 19 th of the month) FED (no. of months) Standard deduction at the time of fresh deposits Standard deduction at the time of first revalidation Standard deduction at the time of second revalidation Feb 4 0.5 NA NA 0.5 Mar 4 0.5 NA NA 0.5 Apr 4 0.5 NA NA 0.5 Total deductions (% of weight) -7-
May 4 0.5 NA NA 0.5 June 3 0.5 NA NA 0.5 Jul 2 0.30 NA NA 0.30 Aug 1 0.30 NA NA 0.30 Weight The quantity of Soybean seed received and/ or delivered at the NCDEX Approved warehouse would be determined/ calculated by the weighbridge at the premises of the Approved warehouse and the quantity so determined would be binding on all parties. Good/ Bad delivery Norms Soybean seed delivery into NCDEX Approved 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. Soybean seed Sampling 1. Sampling from 100% of the bags. Samples are to be taken from three different places in a bag. 2. 5% of the bags in the assaying lot subject to minimum 5 and maximum 10 bags randomly selected from each assaying lot will be cut open, contents spread on the floor and visually checked for presence of any material foreign to the commodity like stones, any plastic material or any substance which is not directly related to the commodity being sampled. Presence of these materials such as large pieces of pebbles, inferior quality or husk in the middle of bag, mixing of any apparent material which is not the actual commodity itself, if any will lead to rejection of the lot being sampled. Further a sample from the bags cut open will be taken and checked for foreign matter. The FM content in the Assaying report will be entered higher out of the two matter values determined on the basis of the composite sample taken from the running sample as indicated in para 1 above and the sample collected as per the process indicated in para 2 This is then divided into 4 parts and distributed as under: - One sample to Depositor - One sample to Warehouse service provider - One sample for Analysis by Assayer - One sample for record with Assayer Empanelled Assayer NCDEX has empanelled the Assayers for quality testing and certification of Soybean seed received at the Approved warehouse. The quality testing and certification of Soybean seed will be undertaken only by an empanelled Assayer. The assayer details are given in the Exhibit 2 alongside the warehouses. Testing Procedure Testing for Soybean seed will be done physically. To test Sand/silica, damaged and green seeds, physical tests are conducted. Moisture content is tested by oven dry method. Assayer Certificate/ Quality Testing Report Testing and quality certificate/ test report issued by NCDEX empanelled Assayer on samples drawn from Soybean seed delivered at Approved warehouses in Indore, Itarsi, Sagar, Mandsaur, Vidisha (M.P.), Kota (Rajasthan), Akola, Nagpur (Maharashtra), and at such other locations announced by the Exchange from time to time shall be acceptable and binding on all parties. Each delivery of Soybean seed at the warehouse -8-
must be accompanied by a certificate from NCDEX empanelled Assayer in the format indicated in Exhibit 4. Validity period The validity period for Soybean for the deposits done from May 03, 2012 is appended in the table. Month of Deposit /Date Expiry Validity of entry by period period warehouse in from the at the Validity system (20 th date of time of Period of Validity period of the Fresh fresh How many first of second previous Deposit deposit times revalidation revalidation month to 19 th (no. of (no of revalidatio (no. of (no. of of the month) months) months) ns allowed months) months) January 1 1 0 0 0 February 4 4 0 0 0 March 4 4 0 0 0 April 4 4 0 0 0 May 4 4 0 0 0 June 3 3 0 0 0 July 2 2 0 0 0 August 1 1 0 0 0 September - - - - - October 4 4 0 0 0 November 3 3 0 0 0 December 2 2 0 0 0 Note: * Assaying/testing as per specification for Soybean B. Assaying/testing for others as per specification for Soybean A contracts. Accordingly i) fresh deposits made from 20th of August till 19th January i.e. goods for delivery in the contracts from September till January will be assayed for specifications for Soybean A contract ii) fresh deposits from 20th Jan till 19th August i.e. goods for delivery in the contracts from February till August will be assayed/ tested for specifications for Soybean B iii) revalidations due in December and January will be assayed/ tested for Soybean A and iv) revalidations due from February onwards will be tested for Soybean B. Electronic transfer Any buyer or seller receiving and or effecting Soybean seed would have to open a Comtrack account with an NCDEX empanelled Comtrack Participant (CP) to hold the Soybean seed in electronic form. On settlement, the buyer s account with the CP would be credited with the quantity of Soybean seed received and the corresponding seller s account would be debited. The Buyer wanting to take physical delivery of the Soybean seed holding has to make a request in prescribed form to his CP with whom Comtrack account has been opened. The CP would route the request to the warehouse for issue of the physical commodity i.e. Soybean seed to the buyer and debit his account, thus reducing the electronic balance to the extent of Soybean seed so withdrawn. Charges All charges and costs payable at the Approved warehouse towards delivery of Soybean seed including sampling, grading, weighing, handling charges; storage etc from the date of receipt into Approved warehouse up to date of pay-in & settlement shall be paid by the seller. -9-
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 with & including storage, handling etc. after the payout shall be borne by the buyer. Warehouse storage charges will be charged to the member/ client by the respective Comtrack 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 Soybean seed into the NCDEX Approved 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. Taxes Service tax Service tax will be payable by the members of Commodity Exchanges on the gross amount charged by them from their clients on account of dealing in commodities. Sales Tax/ VAT Local taxes/ VAT wherever applicable is to be paid by the seller to the sales tax/ VAT authorities on all contracts resulting in delivery. Accordingly the buyer will have to pay the taxes/ VAT to the seller at the time of settlement. Members and/ or their constituents requiring to receive or deliver Soybean seed should register with the relevant tax/ VAT authorities of the place where the delivery is proposed to be received / given. In the event of sales tax exemption, such exemption certificate should be submitted before settlement of the obligation. There will be no exemptions on account of resale or second sale in VAT regime. Premium / Discount Premium & Discount on the Soybean seed delivered will be provided by the Exchange on the basis of quality specifications: The Exchange will communicate the premium / discounts amount applicable. Such amount will be adjusted to the members account through the supplementary settlement. Currently, the applicable premium/discounts for the commodity are as follows: Soybean A (Contracts expiring in the months of September, October, November, December and January) Moisture: From 10-12% accepted at 1:1. Above 12% rejected Foreign matter: From 2-4% accepted at 1:1, from 4-5% accepted at discount of 1:2. Above 5% rejected (The term foreign matter would in general, mean anything other than Soybean e.g. Sand, Silica, pebbles, stalks and other seeds) Green Seed: Above 7% rejected Damaged Seed: From 2-5% accepted at 2:1. Above 5% rejected -10-
Free from non-edible seeds such as Mahua, Castor and Neem and any toxic substances. Should be free from any foul odor. Soybean B (Contracts expiring in the months of February, March, April, May, June, July and August) Moisture: From 8-10% accepted at 1:1. Above 10 % rejected Foreign matter: From 2-4% accepted at 1:1. From 4-5% accepted with a discount of 1:2. Above 5% rejected (The term foreign matter would in general, mean anything other than Soybean e.g. Sand, Silica, pebbles, stalks and other seeds) Green Seed: Above 7% rejected Damaged Seed: From 2-5% accepted at 2:1. Above 5% rejected Free from non-edible seeds such as Mahua, Castor and Neem and any toxic substances. Should be free from any foul odor. Discounts applicable to each soybean grade can be found in Grade Matrix as per Exhibit- 5. -11-
CHAPTER 3 - CLEARING AND SETTLEMENT Daily Settlement All open positions of a futures contract would be settled daily based on the Daily Settlement Price (DSP). Daily Settlement Prices The Daily Settlement Price (DSP) will be as disseminated by the Exchange at the end of every trading day. The DSP will be reckoned for marking to market all open positions. Final Settlement Prices The Final Settlement Price (FSP) will be determined by the Exchange upon maturity of the contract. On expiry of the contract, the following type of open positions would be cash settled: 1. Delivery information not provided. 2. Unmatched Deliver Information. The open positions, for which information have been provided for and have been matched by the Exchange, would result in physical delivery. 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. The Settlement Price for any delivery allocation during staggered period (i.e. up to one day prior to expiry) would be the last available spot price displayed by the Exchange for the respective contract. Spot Prices NCDEX will announce / disseminate spot prices for Soybean seed relating to the designated delivery center and specified grade/ quality parameters determined through the process of polling a set of market participants representing different segments of the value chain such as traders, importers / exporters, processors etc. The polled prices shall be input to a normalizing algorithm (like bootstrapping technique) to arrive at a representative, unbiased and clean benchmark spot price for Soybean seed. The security of data and randomness of polling process will ensure transparency and correctness of prices. The Exchange has absolute right to modify the process of determination of spot prices at any time without notice. Dissemination of Spot Prices Spot prices for Soybean seed will be disseminated on daily basis. Pay in and Pay out for Daily Settlement / Final Settlement The table below illustrates timings for pay in and pay out in case of daily settlement as well as cash settled positions for final settlement. The buyer clients would have to deposit requisite funds with their respective Clearing Member before pay in. -12-
All fund debits and credits for the Member would be done in the Member s Settlement Account with the Clearing bank. Time (T/ E+1) On or before 11.00 hrs After 13.00 hrs Activity PAYIN - Debit paying member a/c for funds PAYOUT Credit receiving member a/c for funds Pay in and Pay out for final physical settlement The table below illustrates timings for pay in and pay out in case of positions marked for physical settlement. The buyers / sellers would have to deposit requisite funds / Soybean seed with their respective Clearing member before pay in. Pay in and Pay out for Final Settlement in case of physical deliveries Time (T/E+2) On or before 12.00 hrs After 14.30 hrs Activity PAYIN - Debit Buyer Member Settlement a/c for funds - Debit Seller Member s CM Pool Account for Soybean seed PAYOUT - Credit Seller Member Settlement a/c for funds - Credit Buyer Member s CM Pool Account for Soybean seed Tender Date - T Tender period: The tender period would start on the 11 th of every month in which the contract is due to expire. In case 11 th happens to be a Saturday, a Sunday or a holiday at the Exchange, the tender period would start from the next working day. Pay-in and Pay-out: on a T+2 basis. If the tender date is T then, pay-in and pay-out would happen on T + 2 day (excluding Saturday). If such a T + 2 day happens to be a Saturday, a Sunday or a holiday at the Exchange, clearing banks or any of the service providers, Pay-in and Pay-out would be effected on the next working day. Expiry Date 20th day of the delivery month. If 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange, which is other than a Saturday. The settlement of contract would be by a staggered delivery system of Pay-in and Payout including the last pay-in and pay-out which would be the final settlement of the contract. Additionally the supplemental settlement for Soybean seed futures contracts for premium / discount adjustments relating to quality of Soybean seed delivered, actual quantity delivered and close out for shortages, will also be conducted on the same day. Clearing Members are required to maintain adequate fund balances in their respective accounts. -13-
Pay in and Pay out for supplemental settlement Time (T/E + 2) On or before 15.00 hours After 15.00 hours Activity PAY IN - Debit Member Settlement a/c for funds PAY OUT Credit Member Settlement a/c for funds Early Payin of Commodities Members can make an early payin of commodities to get exemption from the applicable pre-expiry and delivery margin and the same would be considered for the purpose of adjustment against their settlement obligations. The member shall mark EPI using the NCFE web application. The user guide for the same is available for download under:- NCFE Menu: Downloads-> Download files-> Under User Manual folder-> EPI user guide Supplementary Settlement for Taxes The Exchange will conduct a separate supplementary settlement, as illustrated below, three days after normal pay out for completion of tax transactions. In order to facilitate issue of invoice to right parties, the buyer Clearing Members are required to give the buyer client details to the Exchange latest by 15.00 hrs on E+3 day failing which the buying member is considered as the end buyer and accordingly invoice is issued in his/their name. The seller Clearing Members are required to give the seller client detail to the Exchange latest by 15.00 hrs on E+4 day. The amounts due to the above differences will be debited / credited to Member s clearing bank account similar to normal settlement. Pay in and Pay out for Taxes Time (T/E + 5) Activity On or before 11.00 hours PAY IN: Debit Buyer Member Settlement a/c for funds. After 11.00 hours PAY OUT: Credit Seller Member Settlement a/c for funds For further clarification and detailed procedure on sales tax settlement participants can refer to circular number NCDEX/CLEARING-001/2008/002 issued on January 04, 2008. -14-
Exhibit 1 CONTRACT SPECIFICATIONS OF SOYBEAN SEED (Applicable for contract expiring in February 2014) (Updated on January 27, 2014) SOYBEAN - B (Applicable for contract expiring in the month of February 2014) 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 Soy Bean SYBEANIDR NCDEX Trading System Ex-Warehouse Indore exclusive of Sales taxes 10 MT 10 MT 500 MT Rs per quintal 50 Paisa Moisture : 8 % Foreign Matter : 2 % Damaged : 2 % Green Seed : 7 % Quantity variation +/- 2% Delivery center Additional delivery center Trading hours Due date/expiry date Indore (within a radius of 50 km from the municipal limits) Akola, Nagpur,(Maharashtra);Itarsi, Sagar, Vidisha, Mandsaur (MP); and Kota (Rajasthan) Location Premium/Discount as notified by the Exchange from time to time. As per directions of the Forward Markets Commission from time to time, currently - Mondays through Fridays :10:00 AM to 05:00 PM Saturdays : 10.00 AM to 2.00 PM The Exchange may vary the above timing with due notice 20th day of the delivery month. If 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange, which is not a Saturday. The settlement of contract would be by a staggered system of Pay-in and Pay-out including the last pay-in and pay-out which would be the final settlement of the contract. -15-
Tender Date T Tender Period: The tender period shall start on 11 th of every month in which the contract is due to expire. In case 11 th happens to be a Saturday, a Sunday or a holiday at the Exchange, the tender period would start from the next working day. Tender Period Seller shall have an option of marking an intention of delivery on any day during the tender period up to the expiry of the contract and corresponding buyers matched by the process put in place would have to take delivery. Pay-in and Pay-out: On a T+2 basis. If the tender date is T, then pay-in and pay-out would happen on T+2 day (excluding Saturday). If such a T+2 day happens to be a Saturday, a Sunday or a holiday at the Exchange, clearing banks or any of the service providers, pay-in and pay-out would be effected on the next working day. The sellers can give their intention to give delivery during the tender period up to the expiry of the contract. Delivery specification Delivery Logic Closing of contract Opening of contracts No. of active contracts Price limit If a seller, who has given intentions to deliver, fails to meet their respective obligations, the penalty structure will be as per the circular no. NCDEX/TRADING 091/2007/235 dated October 04, 2007. Seller s Option 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 10 th day of the month. If the 10 th day happens to be a non-trading day, contracts would open on next trading day As per launch calendar Daily price fluctuation limit is (+/-) 3%. If the trade hits the prescribed daily price limit there will be a cooling off period for 15 minutes. Trade will be allowed during this cooling off period within the price band. Thereafter the price band would be raised by (+/-) 1% and trade will be resumed If the price hits the revised price band (4%) again during the day, trade will only be allowed within the revised price band. No trade / order shall be permitted during the day beyond the revised limit of (+ / -) 4% The position limits will be applicable on Exchange wise basis Position limits Member level: 150,000 MT or 15 % of market wide open interest in the commodity, whichever is higher Client level: 30,000 MT -16-
Quality Delivery) Allowance(for 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/TRADING-100/2005/219 dated October 20, 2005. Near month limit The following limits would be applicable from 1st day of every month in which the contract is due to expire. If 1st happens to be non-trading day, the near month limits would start from the next trading day. Member level: 40,000 MT or 15% of the near month Market wide open interest in the commodity whichever is higher Client level: 8,000 MT Quality delivery with variation shall be acceptable with discount as under: Moisture: From 8-10% accepted at 1:1. Above 10% rejected Foreign Matter: From 2-4% accepted at discount of 1:1, from 4-5% accepted with a discount of 1:2. Above 5% rejected (The term 'foreign matter' would, in-general, mean anything other than Soy Bean e.g. sand, silica, pebbles, stalks and other seeds) Damaged Seed: From 2-5% accepted at 2:1. Above 5% rejected Green Seed: Above 7% rejected Free from non-edible seeds such as Mahua, Castor and Neem and any toxic substances. Should be free from any foul odour. Special Margin Final Settlement Price In case of additional volatility, a special margin at such other percentage, as deemed fit, will be imposed in respect of outstanding positions, which will remain in force as long as the volatility exists, after which the special margin may be relaxed. 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% -17-
Tolerance limit of Commodity: SOYBEAN-B (Applicable for all contracts expiring in the months of February, March, April, May, June, July, August) Commodity Specifications Basis Acceptable quality range as per contract specification Permissible Tolerance Moisture 10% for Soybean-A (8% for soybean-b) From 10-12% accepted at 1:1 discount. Above 12% rejected (Soybean-A). From 8-10% accepted at 1:1 discount. Above 10% rejected (Soybean-B) Foreign Matter 2% Basis From 2-4% accepted at 1:1 discount From 4-5% accepted at discount of 1:2. Above 5% rejected 0.25% Damaged 2% Basis From 2-5% accepted at 2:1 discount. Above 5% rejected 0.25% Green Seed 7% Max 0.5% Max Tolerance (for all characteristics) 0.5% Note: Tolerance limit is applicable only for outbound deliveries. Variation in quality parameters within the prescribed tolerance limit as above will be treated as good delivery when members/clients lift the materials from warehouse. These permissible variations shall be based on the parameters found as per the immediate preceding test certificate given by NCDEX approved assayer. Contract launch calendar of Soybean: Contract Launch month Contract expiry month September 2013 February 2014-18-
CONTRACT SPECIFICATIONS OF SOYBEAN SEED (Applicable for contracts expiring in March 2014 and thereafter) SOYBEAN A (Applicable for contracts expiring in the months of October 2014, November 2014 and December 2014) 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 Soy Bean SYBEANIDR NCDEX Trading System Ex-Warehouse Indore exclusive of Sales taxes 10 MT 10 MT 500 MT Rs per quintal 50 Paisa Moisture : 10 % Foreign Matters : 2 % Damaged : 2 % Green Seed : 7 % Quantity variation +/- 2% Delivery center Additional center Trading hours delivery Indore (within a radius of 50 km from the municipal limits) Akola, Nagpur,(Maharashtra);Itarsi, Sagar, Vidisha, Mandsaur (MP); and Kota (Rajasthan) Location Premium/Discount as notified by the Exchange from time to time. As per directions of the Forward Markets Commission from time to time, currently - Mondays through Fridays :10:00 AM to 05:00 PM Saturdays : 10.00 AM to 2.00 PM The Exchange may vary the above timing with due notice Due date/expiry date 20th day of the delivery month. If 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange, which is not a Saturday. The settlement of contract would be by a staggered system of Pay-in and Pay-out including the last pay-in and pay-out which would be the final settlement of the contract. -19-
Tender Date T Tender Period: The tender period shall start on 11 th of every month in which the contract is due to expire. In case 11 th happens to be a Saturday, a Sunday or a holiday at the Exchange, the tender period would start from the next working day. Tender Period Seller shall have an option of marking an intention of delivery on any day during the tender period up to the expiry of the contract and corresponding buyers matched by the process put in place would have to take delivery. Pay-in and Pay-out: On a T+2 basis. If the tender date is T, then pay-in and payout would happen on T+2 day (excluding Saturday). If such a T+2 day happens to be a Saturday, a Sunday or a holiday at the Exchange, clearing banks or any of the service providers, pay-in and pay-out would be effected on the next working day. The sellers can give their intention to give delivery during the tender period up to the expiry of the contract. Delivery specification Delivery Logic Closing of contract Opening of contracts No. of active contracts Price limit If a seller, who has given intentions to deliver, fails to meet their respective obligations, the penalty structure will be as per the circular no. NCDEX/TRADING 091/2007/235 dated October 04, 2007. Seller s Option 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 1 st day of the month. If the 1 st day happens to be a non-trading day, contracts would open on next trading day As per Launch calendar Daily price fluctuation limit is (+/-) 3%. If the trade hits the prescribed daily price limit there will be a cooling off period for 15 minutes. Trade will be allowed during this cooling off period within the price band. Thereafter the price band would be raised by (+/-) 1% and trade will be resumed If the price hits the revised price band (4%) again during the day, trade will only be allowed within the revised price band. No trade / order shall be permitted during the day beyond the revised limit of (+ / -) 4% Position limits The position limits will be applicable on Exchange wise basis Member level: 150,000 MT or 15 % of market wide open interest in the commodity, whichever is higher Client level: 30,000 MT -20-
Quality Delivery) Allowance(for 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/TRADING-100/2005/219 dated October 20, 2005. Near month limit The following limits would be applicable from 1st day of every month in which the contract is due to expire. If 1st happens to be non-trading day, the near month limits would start from the next trading day. Member level: 40,000 MT or 15% of the near month Market wide open interest in the commodity whichever is higher Client level: 8,000 MT Quality delivery with variation shall be acceptable with discount as under: Moisture: From 10-12% accepted at 1:1. Above 12% rejected Foreign Matter: From 2-4% accepted at discount of 1:1, from 4-5% accepted at discount of 1:2. Above 5% rejected (The term 'foreign matter' would, in-general, mean anything other than Soy Bean e.g. sand, silica, pebbles, stalks and other seeds) Damaged Seed: From 2-5% accepted at 2:1. Above 5% rejected Green Seed: Above 7% rejected Free from non-edible seeds such as Mahua, Castor and Neem and any toxic substances. Should be free from any foul odour. Special Margin Final Settlement Price In case of additional volatility, a special margin at such other percentage, as deemed fit, will be imposed in respect of outstanding positions, which will remain in force as long as the volatility exists, after which the special margin may be relaxed. 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% -21-
Tolerance limit Commodity: SOYBEAN-A (Applicable for contracts expiring in the month of September, October, November, December and January) Commodity Specifications Basis Acceptable quality range as per contract specification Permissible Tolerance Moisture 10% for Soybean-A (8% for soybean-b) From 10-12% accepted at 1:1 discount. Above 12% rejected (Soybean-A). From 8-10% accepted at 1:1 discount. Above 10% rejected (Soybean-B) Foreign Matter 2% Basis From 2-4% accepted at 1:1 discount. From 4-5% accepted at discount of 1:2 Above 5% rejected 0.25% Damaged 2% Basis From 2-5% accepted at 2:1 discount. Above 5% rejected 0.25% Green Seed 7% Max 0.5% Max Tolerance (for all characteristics) 0.5% Note: Tolerance limit is applicable only for outbound deliveries. Variation in quality parameters within the prescribed tolerance limit as above will be treated as good delivery when members/clients lift the materials from warehouse. These permissible variations shall be based on the parameters found as per the immediate preceding test certificate given by NCDEX approved assayer. Contract launch calendar of Soybean: Contract Launch Month Contract expiry month April 2014 October 2014 May 2014 November 2014 June 2014 December 2014-22-
SOYBEAN - B (Applicable for all contracts expiring in the months of March 2014, April 2014, May 2014, June 2014 and July 2014) 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 Soy Bean SYBEANIDR NCDEX Trading System Ex-Warehouse Indore exclusive of Sales taxes 10 MT 10 MT 500 MT Rs per quintal 50 Paisa Moisture : 8 % Foreign Matter : 2 % Damaged : 2 % Green Seed : 7 % Quantity variation +/- 2% Delivery center Additional delivery center Trading hours Due date/expiry date Tender Period Indore (within a radius of 50 km from the municipal limits) Akola, Nagpur,(Maharashtra);Itarsi, Sagar, Vidisha, Mandsaur (MP); and Kota (Rajasthan) Location Premium/Discount as notified by the Exchange from time to time. As per directions of the Forward Markets Commission from time to time, currently - Mondays through Fridays :10:00 AM to 05:00 PM Saturdays : 10.00 AM to 2.00 PM The Exchange may vary the above timing with due notice 20th day of the delivery month. If 20th happens to be a holiday, a Saturday or a Sunday then the due date shall be the immediately preceding trading day of the Exchange, which is not a Saturday. The settlement of contract would be by a staggered system of Pay-in and Pay-out including the last pay-in and pay-out which would be the final settlement of the contract. Tender Date T Tender Period: The tender period shall start on 11 th of every month in which the contract is due to expire. In case 11 th happens to be a Saturday, a Sunday or a holiday at the Exchange, the tender period would start from the next working day. -23-
Seller shall have an option of marking an intention of delivery on any day during the tender period up to the expiry of the contract and corresponding buyers matched by the process put in place would have to take delivery. Pay-in and Pay-out: On a T+2 basis. If the tender date is T, then pay-in and pay-out would happen on T+2 day (excluding Saturday). If such a T+2 day happens to be a Saturday, a Sunday or a holiday at the Exchange, clearing banks or any of the service providers, pay-in and pay-out would be effected on the next working day. The sellers can give their intention to give delivery during the tender period up to the expiry of the contract. Delivery specification Delivery Logic Closing of contract Opening of contracts No. of active contracts Price limit If a seller, who has given intentions to deliver, fails to meet their respective obligations, the penalty structure will be as per the circular no. NCDEX/TRADING 091/2007/235 dated October 04, 2007. Seller s Option 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 1 st day of the month. If the 1 st day happens to be a non-trading day, contracts would open on next trading day As per launch calendar Daily price fluctuation limit is (+/-) 3%. If the trade hits the prescribed daily price limit there will be a cooling off period for 15 minutes. Trade will be allowed during this cooling off period within the price band. Thereafter the price band would be raised by (+/-) 1% and trade will be resumed If the price hits the revised price band (4%) again during the day, trade will only be allowed within the revised price band. No trade / order shall be permitted during the day beyond the revised limit of (+ / -) 4% The position limits will be applicable on Exchange wise basis Member level: 150,000 MT or 15 % of market wide open interest in the commodity, whichever is higher Client level: 30,000 MT Position limits 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/TRADING-100/2005/219 dated October 20, 2005. Near month limit The following limits would be applicable from 1st day of -24-
Quality Delivery) Allowance(for every month in which the contract is due to expire. If 1st happens to be non-trading day, the near month limits would start from the next trading day. Member level: 40,000 MT or 15% of the near month Market wide open interest in the commodity whichever is higher Client level: 8,000 MT Quality delivery with variation shall be acceptable with discount as under: Moisture: From 8-10% accepted at 1:1. Above 10% rejected Foreign Matter: From 2-4% accepted at discount of 1:1, from 4-5% accepted with a discount of 1:2. Above 5% rejected (The term 'foreign matter' would, in-general, mean anything other than Soy Bean e.g. sand, silica, pebbles, stalks and other seeds) Damaged Seed: From 2-5% accepted at 2:1. Above 5% rejected Green Seed: Above 7% rejected Free from non-edible seeds such as Mahua, Castor and Neem and any toxic substances. Should be free from any foul odour. Special Margin Final Settlement Price In case of additional volatility, a special margin at such other percentage, as deemed fit, will be imposed in respect of outstanding positions, which will remain in force as long as the volatility exists, after which the special margin may be relaxed. 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% -25-
Tolerance limit of Commodity: SOYBEAN-B (Applicable for all contracts expiring in the months of February, March, April, May, June, July, August) Commodity Specifications Basis Acceptable quality range as per contract specification Permissible Tolerance Moisture 10% for Soybean-A (8% for soybean-b) From 10-12% accepted at 1:1 discount. Above 12% rejected (Soybean-A). From 8-10% accepted at 1:1 discount. Above 10% rejected (Soybean-B) Foreign Matter 2% Basis From 2-4% accepted at 1:1 discount From 4-5% accepted at discount of 1:2. Above 5% rejected 0.25% Damaged 2% Basis From 2-5% accepted at 2:1 discount. Above 5% rejected 0.25% Green Seed 7% Max 0.5% Max Tolerance (for all characteristics) 0.5% Note: Tolerance limit is applicable only for outbound deliveries. Variation in quality parameters within the prescribed tolerance limit as above will be treated as good delivery when members/clients lift the materials from warehouse. These permissible variations shall be based on the parameters found as per the immediate preceding test certificate given by NCDEX approved assayer. Contract launch calendar of Soybean: Contract Launch Month October 2013 March 2014 November 2013 April 2014 December 2013 May 2014 January 2014 June 2014 February 2014 July 2014 Contract expiry month 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, s, circulars, directives, notifications of the Exchange as well as of the Regulators, Governments and other authorities. Members and market participants trading on the Exchange in the commodity contracts shall be deemed to be aware of applicable laws and amendments thereof from time to time, including provisions and rates relating to the sales tax, value added tax APMC Tax, Mandi Tax, octroi, excise duty, stamp duty, etc., applicable on the underlying commodity of any contract offered for trading. -26-