(As of October 9 th, 2018) Rubber Declared Delivery Procedure DISCLAIMER: This English translation is being provided for informational purposes only and represents a desire by the Exchange to promote better understanding of the Exchange by non-resident participants. While care has been taken to ensure that the translation is accurate and complete, Tokyo Commodity Exchange, Inc. accepts no liability or responsibility for any loss or damages, including trading losses, that may be incurred from any inaccuracy or omission in the English translation. In the event of discrepancies between the English version and the original Japanese version, the Japanese version shall prevail. Any dispute that may arise within or without a court of law with regard to the meaning of the words, provisions and stipulations of the rules, regulations and agreements shall be resolved in accordance with the Japanese texts. 1/9
Chapter 1 General Provisions Article 1 (Purpose) 1. This Procedure shall prescribe matters necessary for the handling of Declared Delivery ( Declared Delivery ) prescribed in Article 42 of the Rubber Delivery Detailed Rules ( Detailed Rules ). Article 2 (Definitions) 1. Declared Delivery means delivery carried out in a manner in which the Members (meaning Members provided for in Article 6.1 of the Market Rules; the same shall apply hereinafter), holding a position in the current contract month, conclude a written agreement, and the like, prescribing the terms of delivery, to be made under an agreement between the delivery parties prior to the last trading day of the current contract month, and make an application for such delivery to the Exchange. Article 3 (Eligible Persons) 1. Eligibility to make an application for Declared Delivery shall be limited to those who fall under either of the following items: (1) Members; (2) Commercials; or (3) The one deemed appropriate by the Exchange. Article 4 (Notice of Intention to Make Declared Delivery) 1. In cases where a Member holding a position in the first contract month seeks a counterparty to a Declared Delivery, the Member may notify the Exchange of its intention to make a Declared Delivery by submitting a document, prescribed by the Exchange, describing the delivery goods, delivery amount, delivery day, delivery point, effective period for the notice, and other terms and conditions of the delivery, within the period from the business day immediately following the last trading day of the previous contract month to 2:30 p.m. of the business day immediately preceding the last day of the application period, as prescribed in Article 42.1 of the Detailed Rules. 2. Upon receipt of the notice prescribed in the preceding paragraph, the Exchange shall, without delay, notify Member of the contents of the document submitted, pursuant to the provisions of the preceding paragraph. 3. If the Member who has made such notice intends to change any of the matters described in the document prescribed in Paragraph 1 (excluding the effective period for the notice and the proposed delivery amount), the Member shall submit a revised document to the Exchange. In this case, the Exchange shall notify the Member of the revisions without delay. Chapter 2 RSS Article 5 (Application Method and Approval, etc.) 1. The application method, approval, etc. for Declared Delivery shall be as follows: 2/9
(1) Members making an application for Declared Delivery shall submit the following documents to the Exchange by 2:30 p.m. of each business day falling within the application period prescribed in Article 42.1 of the Detailed Rules; provided, however, that the application shall be made by 2:30 p.m., two (2) business days prior to the delivery day; (2) If the Exchange determines that the Declared Delivery proposed in an application submitted pursuant to the preceding item would not be detrimental to market management, the Exchange shall approve the request, and upon such approval, the application shall be finalized and take effect; (3) The positions for which Declared Delivery has taken effect shall be excluded from the unrealized profit and loss calculation starting from the following Clearing Period; (4) The Exchange shall, without delay, notify Members of applications that have taken effect, and of the Delivery Payment and the amount of consumption tax applicable thereto (including local consumption tax; the same shall apply hereinafter) (the sum of the delivery payment and the amount of consumption tax applicable thereto shall be hereinafter referred to as Delivery Payment ); and (5) If Members who have made such an application intend to change any of the matters described in the application form prescribed in Item 1 (excluding the proposed delivery amount), the Members shall submit a revised application form and other required documents to the Exchange by 3:30 p.m. on the delivery day. In this case, the Exchange shall notify said Member of the Delivery Payment again without delay. Article 6 (Cancellation and Change of Application, etc.) 1. Members who have made a notice of intention to make Declared Delivery may not change the effective period of the notice or proposed delivery amount, nor cancel the notice, nor execute an offset transaction for the proposed delivery amount. However, this provision shall not apply in cases where no application for Declared Delivery has been made by the expiration of the effective period for the notice. 2. Members who have made an application for Declared Delivery may not change the proposed delivery amount, nor cancel the application, nor execute an offset transaction for the proposed delivery amount. However, this provision shall not apply in cases where the Exchange has refused to approve an application, pursuant to the provisions of Item 2 in previous Article. Article 7 (Good Delivery Material) 1. Notwithstanding the provision prescribed in Article 2 and Article 3 of Detailed Rules, the Good Delivery Material shall be the raw rubber (exclude TSR) that the customs formalities for import have been completed and agreed upon by the delivery parties: Article 8 (Delivery Points) 1. The delivery points shall be located in Japan and are agreed upon by the delivery parties. Article 9 (Weight of Delivery Goods) 1. The weight of the delivery goods shall be based on the numerical value stated in the application form prescribed in Article 5.1.1. Article 10 (Relationship Between the Weight of Delivery Goods and the Number of Delivery Lots) 1. The number of delivery lots shall be converted from the weight of the delivery goods, to 3/9
delivery units, as prescribed in Article 17 of the Market Rules. However, when converting the weight of the delivery goods into delivery units, any resulting fraction exceeding 50% of the minimum delivery unit may be deemed to be the minimum delivery unit for the purpose of settlement of the positions. Article 11 (Delivery Date and time) 1. The delivery day shall be agreed upon between the delivery parties within the period from the first business day of the current contract month to the last business day of the current contract month. 2. The delivery time on the delivery day, as prescribed in the preceding paragraph, shall be by noon on the relevant business day. Article 12 (Delivery Price) 1. The delivery price shall be equal to the settlement price of the first contract month on the day on which the Declared Delivery takes effect. Article 13 (Delivery Method) 1. The delivery method shall be as follows: (1) The seller shall deliver to the Exchange the documents, etc. that assure the delivery, by noon on the business day immediately preceding the delivery day, and will receive the Delivery Payment at the time of delivery ; and (2) The buyer shall, by noon on the delivery day, deliver the Delivery Payment to the Exchange, and will receive the documents prescribed in the preceding item in exchange therefore from the Exchange. Chapter 3 TSR Article 14 (Application Method and Approval, etc.) 1. The application method, approval, etc. for Declared Delivery shall be as follows: (1) Members making an application for Declared Delivery shall submit an application form designated by the Exchange that has been co-signed by the seller and buyer to the Exchange by 2:30 p.m. of each business day falling within the application period prescribed in Article 42.1 of the Detailed Rules; provided, however, that the application shall be made by 2:30 p.m., two (2) business days prior to the shipping date; (2) If the Exchange determines that the Declared Delivery proposed in an application submitted pursuant to the preceding item would not be detrimental to market management, the Exchange shall approve the request, and upon such approval, the application shall be finalized and take effect; (3) The positions for which Declared Delivery has taken effect shall be excluded from the unrealized profit and loss calculation starting from the following Clearing Period; (4) The Exchange shall, without delay, notify Members of applications that have taken effect, and of the Delivery Payment; and (5) If Members who have made such an application intend to change any of the matters described in the application form prescribed in Item 1 (excluding the proposed delivery amount), the Members shall submit a revised application form and other required documents to the Exchange by 3:30 p.m., two (2) business days prior to the shipping date. In this case, if there is any change in the Delivery Payment, the Exchange shall notify said 4/9
Member of the Delivery Payment again without delay. Article 15 (Cancellation and Change of Application, etc.) 1. Members who have made a notice of intention to make Declared Delivery may not change the effective period of the notice or proposed delivery amount, nor cancel the notice, nor execute an offset transaction for the proposed delivery amount. However, this provision shall not apply in cases where no application for Declared Delivery has been made by the expiration of the effective period for the notice or in cases where situations that correspond to the provisions of Article 38.1 through 3, 5, and 6 of the Detailed Rules have arisen. 2. Members who have made an application for Declared Delivery may not change the proposed delivery amount, nor cancel the application, nor execute an offset transaction for the proposed delivery amount. However, this provision shall not apply in cases where the Exchange has refused to approve an application, pursuant to the provisions of Item 2 of the preceding article. Article 16 (Good Delivery Material) 1. Notwithstanding the provisions prescribed in Article 24 and Article 25 of the Detailed Rules, the Good Delivery Material shall be raw rubber for which the customs formalities for import have not been completed and which have been agreed upon by the delivery parties. Article 17 (Delivery Points) 1. The delivery points shall be ports located in Thailand, Malaysia, Indonesia, Singapore, Vietnam, or the like and agreed upon by the delivery parties. Article 18 (Weight of Delivery Goods) 1. The weight of the delivery goods shall be based on the numerical value stated in the application form prescribed in Article 14.1. Article 19 (Relationship between the Weight of Delivery Goods and the Number of Delivery Lots) 1. The number of delivery lots shall be converted from the weight of the delivery goods to delivery units, as prescribed in Article 17 of the Market Rules. However, when converting the weight of the delivery goods into delivery units, any resulting fraction exceeding 50% of the minimum delivery unit may be deemed to be the minimum delivery unit for the purpose of settlement of the positions. Article 20 (Delivery Price) 1. The delivery price shall be equal to the settlement price of the first contract month on the day on which the Declared Delivery takes effect. Article 21 (Delivery Method) 1. The delivery method shall be as follows: (1) The delivery method shall be free on board ( FOB ). The seller shall load the delivery goods to the vessels designated by the buyer at the delivery port agreed upon between the delivery parties, for the destination designated by the buyer. 5/9
(2) If the buyer requests the delivery to be made separately for each delivery units, the seller shall do so. (3) The shipping date of the Good Delivery Material shall, in principle, be the day the buyer designates and the seller agrees upon within the period from the day falling on two (2) business days after the day on which the Declared Delivery takes effect to the end of the current contract month. If the buyer designates a shipping date, the buyer shall promptly notify the seller to that effect. In this case, the buyer shall provide the seller the number of days necessary for shipment according to commercial custom. (4) The seller and buyer shall co-sign and submit the shipping advice designated by the Exchange to the Exchange by noon on the day seven (7) business days prior to the planned shipping date. If the shipping date is changed, a shipping advice revised accordingly shall be promptly submitted to the Exchange. (5) The shipping date of the delivery goods shall be the shipment completion date shown in the bill of lading. (6) The seller and buyer shall co-sign and submit the delivery notice designated by the Exchange to the Exchange by noon on the day falling on five (5) business days after the next business day of the shipping date of the delivery goods. In this case, the seller shall submit a copy of the delivery documents prescribed in the following item to the buyer and the Exchange. (7) The seller shall submit the original copy of those of the following delivery documents that are designated by the buyer to the Exchange by noon on the day falling on four (4) business days after the day of submission of the delivery notice. However, the seller may submit the original copy of said delivery documents to the buyer, subject to consent of the buyer. a. Bill of lading b. Invoice c. Quality inspection certificate d. Quality/Weight certificate e. Certificate of origin f. Packing list g. Other documents generally used as delivery documents in international rubber transactions (8) The delivery documents submitted pursuant to the provisions of the preceding item shall satisfy the following criteria: a. They contain the matters prescribed in national laws, ordinances, etc., related to international agreements, commercial custom, or delivery b. They contain all terms and conditions necessary for the transfer (in the case of bills of lading) c. They contain the procedures, etc. required by customs (in the case of documents necessary for customs formalities) d. Other matters generally required for international rubber transactions (9) The buyer shall make the Delivery Payment to the Exchange by noon on the shipping date, and receive the delivery documents prescribed in the preceding item on the delivery day. (10)The buyer shall submit the delivery completion notice designated by the Exchange by 3:30 p.m. on the day falling on two (2) business days after the delivery day. (11)The Delivery Payment shall be made to the seller by noon on the day falling on the next business day after the day on which the delivery completion notice prescribed in the preceding item is submitted to the Exchange (which shall have been received by the Exchange by 3:30 p.m. on each business day). (12)Notwithstanding the provisions of Item 6 and Item 7, with agreement between the delivery parties, the delivery may be completed with the delivery documents being substituted by a delivery report that contains the detailed statement of the delivery. In this case, the delivery report shall contain a statement to the effect that the requirements for the delivery 6/9
have been satisfied and the transfer of ownership has been completed and contain said detailed statement of the delivery, shall be co-signed by the buyer and seller, and shall be submitted to the Exchange by noon on the day falling on the business day before the delivery day. Upon submission of the delivery report, it shall be deemed that the delivery completion notice has been submitted to the Exchange. Article 22 (Arrangement for Vessels, etc.) 1. The vessels and containers prescribed in Item 1 of the preceding article shall be arranged for by the buyer, unless arranged for by the seller. In this case, the buyer shall arrange for vessels that satisfy the criteria for port entrance permits prescribed by the delivery point. 2. Upon completion of arrangement for vessels, the buyer shall promptly notify the seller to that effect. 3. The seller shall, upon receiving notice from the buyer pursuant to the preceding paragraph, provide cooperation so that any and all processes performed by the buyer in accordance with the rules of said delivery point such as preparation for shipment to the vessels and containers arranged for by the buyer will be completed by the shipping date. 4. For shipment of the delivery goods, the seller and buyer shall handle cargo in accordance with commercial custom for general export procedures for raw rubber. 5. If the delivery is performed with goods other than the Good Delivery Material prescribed in Article 24 of the Detailed Rules or the delivery is performed at a delivery point other than the delivery points prescribed in Article 27 of the Detailed Rules, the delivery shall be decided upon through agreement between the delivery parties notwithstanding the provisions of each preceding paragraph. Article 23 (Scope of Responsibility of the Seller) 1. The scope of responsibility of the seller for the delivery shall extend to the point in time when the full quantity of the delivery goods has been loaded. 2. If the delivery is performed with goods other than the Good Delivery Material prescribed in Article 24 of the Detailed Rules or the delivery is performed at a delivery point other than the delivery points prescribed in Article 27 of the Detailed Rules, the delivery shall be decided upon through agreement between the delivery parties notwithstanding the provisions of the preceding paragraph. Article 24 (Burden of Expenses for Delivery) 1. Expenses for the delivery shall be borne as follows: (1) Fees for use of container terminals that accrue for shipment and expenses related to shipment work, etc. that accrue up to completion of shipment of the full quantity of the delivery goods shall be borne by the seller. (2) Expenses for arrangement for vessels and containers and expenses that accrue after completion of shipment of the full quantity of the delivery goods shall be borne by the buyer. (3) Other expenses not prescribed in the Market Rules or this Procedure shall be decided upon through consultation between the delivery parties in accordance with commercial custom. 2. For shipment of the delivery goods, the seller and buyer shall handle cargo in accordance with commercial custom for general export procedures for raw rubber. 3. If the delivery is performed with goods other than the Good Delivery Material prescribed in Article 24 of the Detailed Rules or the delivery is performed at a delivery point other than the delivery points prescribed in Article 27 of the Detailed Rules, the delivery shall be decided upon through agreement between the delivery parties notwithstanding the provisions of Paragraph 1. 7/9
Chapter 4 Miscellaneous Provisions Article 25 (Claim of Deficiency) 1. The buyer may not submit a claim for deficiency with respect to the delivery goods delivered to the buyer by way of Declared Delivery. Article 26 (Recording on the Statutory Book) 1. Members who have carried out Declared Delivery shall record the delivery in the statutory book in a manner that clearly indicates that the delivery was made by way of Declared Delivery. Article 27 (Others) 1. Matters not prescribed in this Procedure shall be determined by mutual agreement between the delivery parties. Article 28 (Application Mutatis Mutandis of the Rubber Delivery Detailed Rules) 1. The provisions of Article 7 of the Detailed Rules shall apply mutatis mutandis to Declared Delivery. Article 29 (Revision or Abolition) 1. Revision or Abolition to this Procedure shall be approved by the President & CEO. 8/9
Supplementary Provisions This Procedure shall be in effect as of January 1, 2018. Supplementary Provisions Newly established Chapter 1 (General Provisions), Chapter 2 (RSS), Chapter 3 (TSR), Chapter 4 (Miscellaneous Provisions), Article 14 (Application Method and Approval, etc.), Article 15 (Cancellation and Change of Application, etc.), Article 16 (Good Delivery Material), Article 17 (Delivery Points), Article 18 (Weight of Delivery Goods), Article 19 (Relationship Between the Weight of Delivery Goods and the Number of Delivery Lots), Article 20 (Delivery Price), Article 21 (Delivery Method), Article 22 (Arrangement for Vessels, etc.), Article 23 (Scope of Responsibility) and Article 24(Burden of Expenses for Delivery), and the revisions to Article 1 (Purpose), Article 4 (Notice of Intention to Make Declared Delivery), Article 5 (Application Method and Approval, etc.), Article 6 (Cancellation and Change of Application, etc.), Article 7 (Good Delivery Material), Article 14 (Claim of Deficiency), Article 15 (Recording on the Statutory Book), Article 16 (Others), Article 17 (Application Mutatis Mutandis of the Rubber Delivery Detailed Rules) and Article 18 (Revision or Abolition) shall be in effect as of October 9, 2018 and applied to the delivery of November 2018 contract and subsequent contract months. 9/9