The physical deliveries shall be effected as per the process notified in the contract specifications/product notes of respective commodities
Pay in and Pay out for final physical settlement
All contracts materialising into physical deliveries are settled within a period of 2 days after delivery allocation i.e. on T/E+2 (where T is Tender date & E is Expiry date) or as per timelines specified in contract specification / product note. If the tender date is T/E, then the delivery pay-in and pay-out would take place on T/E+2 day. If such a T/E+2 day happens to be a Saturday, a Sunday or a holiday at the Exchange, Clearing Banks or any of the service providers, the pay-in and payout would be effected on the next working day.
The settlement day for each commodity is specified in the Settlement Calendar issued by Clearing Corporation periodically.
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/commodities with their respective Clearing member before “pay in”.
|Pay in and Pay out for Final Settlement in case of physical deliveries|
|On or before 12.00 hours||PAY-IN
Debit Buyer Member Settlement a/c for funds
|After 14.30 hours||PAY-OUT
Credit Seller Member Settlement a/c for funds
Supplementary Settlement for quantity and quality difference
Additionally the supplemental settlement will also be conducted on the same day (T/E+2) for
- Premium / discount adjustments relating to quality of the commodity delivered
- Difference in actual quantity of commodity delivered
- Close out for delivery shortages, if any
Clearing Members are required to maintain adequate fund balances in their respective accounts.
|Pay in and Pay out for supplemental settlement|
|Time (T/E + 2)||Activity|
|On or before 15.00 hours||PAY-IN - Debit Member Settlement a/c for funds|
|After 15.00 hours||PAY-OUT – Credit Member Settlement a/c for funds|
Supplementary Settlement for Goods and Service tax (GST)
NCCL will conduct a separate supplementary settlement three days after physical settlement date for completion of GST transactions on deliveries effected by the buyer and seller.
In order to facilitate issue of GST 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 details 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 GST|
|Time (T/E + 5)||Activity|
|On or before 11.00 hours||PAY-IN - Debit Member Settlement a/c for funds|
|After 11.00 hours||PAY-OUT – Credit Member Settlement a/c for funds|
Procedure for exchange of Physical Delivery information
The Clearing Corporation in order to simplify and strengthen the processes of GST settlement and exchange of Physical Delivery information has prescribed a process as detailed in Procedure for exchange of Physical Delivery information
A late fee is applicable in case the timelines notified are not adhered to, by the delivering clearing Member/it’s Constituent.
Penalty on delivery default
The penalty structure for failure to meet delivery obligations by the seller and appropriation of the said penalty amounts shall be as under:
1. Penalty on seller in case of delivery default (default in delivery against open position at expiry in case of compulsory delivery contracts, default in delivery after giving intention for delivery) shall be as follows:
i. Futures Contracts on agri-commodities:
3% of Settlement price + replacement cost (difference between settlement price and average of three highest of the last spot prices of 5 succeeding days after the commodity pay-out date, if the average price so determined is higher than settlement price, else this component will be zero.)
ii. Futures Contracts on non-agri commodities:
3% of settlement price + replacement cost (difference between settlement price and higher of the last spot prices on the commodity pay-out date and the following day, if the spot price so arrived is higher than settlement price, else this component will be zero.)
Norms for apportionment of penalty
i. At least 1.75% of Settlement Price shall be deposited in the Settlement Guarantee Fund of the clearing corporation
ii. Up to 0.25% of Settlement Price may be retained by the clearing corporation towards administration expenses
iii. 1% of Settlement Price + replacement cost shall go to buyer who was entitled to receive delivery
2. Buyers default is not permitted.
3. Any intentional / wilful delivery default by seller would be viewed seriously and NCCL / may take suitable penal / disciplinary action against such members over and above the prescribed penalty.
4. A seller who has got requisite stocks in the NCCL approved warehouses and / or has marked an intention during staggered delivery period is not allowed to default and any such delivery default by seller would be viewed seriously and an additional penalty of 3% over and above the penalty prescribed for delivery default shall be levied. In addition to the penalty, the NCCL / may take suitable penal / disciplinary action against such members.
5. Members are advised to ensure that necessary arrangements for pay-in of commodity on scheduled date are in place before marking any delivery intentions on behalf of Clients / own account during Staggered period