Those constituents who are Institutions / Domestic Corporate Bodies and such other entities, etc., as may be approved by NCCL, desirous of clearing the trades through the Professional Clearing Member (PCM)/Strategic Trading cum Clearing Member (STCM) are required to approach the PCM / STCM registered with NCCL. The PCM / STCM, upon its satisfaction and after obtaining the prescribed documents, shall forward the same to NCCL along with the prescribed fees, as may be prescribed. Upon approval by NCCL, such entities would be allotted a Custodial Participant code, hereinafter referred to as “CP Code”. Such approved entities can have a facility to execute trades through one or more than one Trading Member (TM) / Trading cum Clearing Member (TCM) / Strategic Trading Cum Clearing Member (STCM) and settle such trades through a Professional Clearing Member (PCM) or Strategic Trading Cum Clearing Member (STCM). Such entities who have been allocated a Custodial Participant code shall be termed as Custodial Participant (CP). NCCL shall allot a CP code and upon receipt of same, the CP shall intimate the CP code allotted to him to the TM/TCM/STCM through whom he desires to trade on NCDEX.
A. Procedure for appointment of Clearing Member (PCM/STCM) by Custodial Participant:
- Custodial Participant shall enter into an agreement as per format prescribed with a Clearing Member (PCM / STCM).
Prescribed format – Clearing Member –Constituent (Custodial Participant) agreement
- The Clearing Member shall apply to the NCCL in the format prescribed in along with a copy of the agreement, for allotment of CP code.
Prescribed format – Application from Clearing Member for allotment of Custodial Participant (CP)
B. Procedure for settlement of obligations on account of Custodial Participant:
- Trading Members (TM/ TCM/STCM) who place orders on behalf of a CP in the trading system of NCDEX shall enter the CP code, along with the order details including the client code allotted to the CP.
- Trades resulting out of the orders with CP codes shall be made available by NCDEX to the relevant Clearing Member (PCM / STCM), for approval or rejection.
- Clearing Member of CP shall approve or reject such trades within the stipulated time, on the same day in such manner and through such facility as provided to the Clearing Member.
- All such trades which have been approved by Clearing Member shall form part of the obligation of the Clearing Member concerned and such Clearing Member shall be fully and completely responsible for all obligations arising out of such trades including the payment of margins, penalties, charges, any other levies and settlement of such obligations.
Trades of CP which have not been approved by Clearing Member shall be considered as trades pertaining to the respective Trading Members under such client codes as keyed in by the trading member who executed such trades and shall form part of the obligation of those Clearing Members who clear and settle for such Trading Members.