NCDEX receives approval to reduce staggered delivery period
NCDEX, the country's leading agri-commodity exchange, has received approval from the commodity markets regulator; Forward Markets Commission (FMC) for the reduction of staggered delivery period to the last 10 days of the expiry in all the agricultural futures contracts in which staggered delivery system has been in existence.
July 03, 2013 / 17:34 IST
NCDEX, the country's leading agri-commodity exchange, has received approval from the commodity markets regulator; Forward Markets Commission (FMC) for the reduction of staggered delivery period to the last 10 days of the expiry in all the agricultural futures contracts in which staggered delivery system has been in existence. This will be applicable with effect from August 2013 expiry onwards.
Staggered Delivery System was introduced by the Exchange in 2012 with a view to discourage excessive speculation in the near month contracts and to encourage convergence with the underlying physical markets. Under the Staggered Delivery Mechanism Sellers could tender delivery any time from the 5th of the expiring month till the expiry date; giving them a 15-day window up to the expiry of a near-month contract. Data shows that this has facilitated orderly expiry of contracts and has also benefitted both sellers and buyers.The Exchange has been working closely with the value chain participants to improve the market structure and based on a study and market survey done by the Exchange, the Exchange recommended to the Regulator that reduction in the Tender period from 15 days to 10 days was necessary. The FMC has accordingly approved the reduction in Staggered Delivery Period to 10 days.Speaking on this development, Mr. Samir Shah, MD in Charge, NCDEX said "The Exchange has always remained engaged with the Regulator to broad base the commodities futures market, we believe this measure will further strengthen and deepen the market. Further we have also taken up the issue of exemption of hedgers from Special and Additional margins and has also sought approval of the FMC for introduction of Exchange For Physical (EFP) in the contracts traded on the Exchange platform. We believe that this will help in addressing counterparty and business risks inherent in the bilateral transactions in the physical market. We expect to hear from FMC soon on this too." Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
