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Other than FPOs
- Early pay-in’ facility shall be provided to market participants permitting them to deposit certified goods in NCCL approved warehouse against relevant futures contracts sold. For such short positions against which early pay-in has been made, NCCL shall exempt imposition of all types of margins. However, NCCL shall continue to collect mark to market margins from such market participants against such positions.
- The member can make ‘Early pay-in’ of commodity at any time for a short position in the near month contracts after the beginning of the near month period (as per contract specification) i.e. with start of the applicability of near month limit for that contract (the information will be processed at the end of day).
- In case of compulsory delivery and seller’s option contracts, delivery to the extent of open position at the expiry of the contract shall be mandatory after claiming early pay-in facility on the position.
Early Pay-in Facility for Farmer Producer Organisation (FPO)
- The Members for their FPO clients can make ‘Early pay-in’ of commodity at any time for a short position in a contract after the start of trading in such contract on the Exchange platform (the information will be processed at the end of day)
- For such short positions against which early pay-in has been made, NCCL shall exempt imposition of all types of margins.
- With respect to Mark to Market margin, NCCL continue to compute obligations at member level as per the existing process. Daily mark-to-market profit/ loss for the exempted FPO positions shall be accumulated by NCCL for a deferred settlement till the completion of delivery settlement. Accordingly, the MTM losses shall be funded by NCCL from its own sources and MTM gains shall be retained by the NCCL. .
- NCCL shall transfer an amount equivalent to the MTM pay-in arising out of FPO clients’ position to respective clearing members settlement account.
- NCCL shall compute amount to be transferred based on daily settlement price / trade price from the date when EPI is marked in the system for such short positions. Conversely, in case of MTM gains on such positions amount equivalent to MTM pay-in funded by NCCL shall be debited from the members settlement account.
- On daily basis members account will be debited or credited based on the MTM for FPO client for the specific transaction against which early pay-in has been made. The member shall post such credit or debit to the account of FPO client and accordingly, there is no need to make any MTM call for the FPO client.
- In case the short position is squared off, the deferred Mark to Market settlement would be done with the Member on the date of square off.
- Deferred mark-to-market settlement shall be capped at Rs.25.00 lakhs for a single FPO and Rs 500.00 lakhs across all FPOs, until further review. Mark to Market settlement in excess of the defined exemption limits shall be collected from the Clearing Member, who in turn would be required to collect the same from the end client (FPO).
- The MTM obligation funded by NCCL shall be considered towards compliance of collection of MTM for margin reporting.
- Upon final delivery, the net amount funded by NCCL shall be debited from the Members account.
- Members will be required to inform the NCCL details of clients under FPO category to claim the benefit of ‘Early pay-in’ as above.
- The above facility shall be available only to Farmers Producer Organization (FPO) clients. A Farmers Producer Organization (FPO) means any entity registered as a Producer Company under Section 581(C) of Companies Act, 1956, a Company under Section 8 of Companies Act 2013, Society Registration Act, 1860, Public Trusts registered under Indian Trusts Act, 1882, Multi-State Cooperative Society Act, 2002 or Cooperative Societies Act/ Autonomous or Mutually Aided Cooperative Societies Act of the respective State.