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Delivery Mechanism |
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Delivery
mechanism: |
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One of the methods of settling the
contracts is by taking or making delivery. Delivery period
at NMCE is during last three days of the
contract expiry date. During this period Members of the exchange
are not permitted to create any fresh position in the
expiring contracts. They can either square up their
position or take/give delivery to settle their outstanding
contracts. Various steps required to be followed by the
participants having outstanding position on 12th
of delivery month are as follows |
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Steps to follow |
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1) |
Sellers and buyers have to convey intention on or
before three days of the contract expiry date |
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2) |
The intentions are then matched and
assigned by the Exchange with the corresponding
buyers. As is the case universally, seller has freedom
to tender delivery during the delivery period at any
approved delivery centers. In other words, buyer
cannot demand delivery at delivery center of his
choice. When the seller gives intimation, a call is
made to the corresponding buyer to whom the delivery
is assigned by the Exchange. Delivery margin is
collected from both the buyer and seller |
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3) |
After matching the open positions of
relevant buyer and seller, the same is transferred
from the system and settled at the closing price of
the preceding day, so that mark to market (MTM) is not
levied or paid to the member |
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4) |
Within three days from the position
transfer, the buyer has to maintain the required funds
in their clearing & settlement account while the
seller has to tender the warehouse receipts to the
exchange along with the computation of warehouse
charges. On the 3rd day, the exchange makes pay-in &
payout simultaneously after retaining the warehouse
charges margin and sales tax margin from the buyer and
seller respectively |
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5) |
After the completion of pay-in and
payout, duly endorsed warehouse receipts are sent to
the buyer immediately |
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6) |
Settlement of warehouse charges,
margins and sales tax margins take place soon after
receipt of relevant documents (copies of sales bill,
sales tax form) from the member |
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DELIVERY MECHANISM OF NMCE
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