FMC/3/2014/C/82

No.1/2/2014/FC/NCDEX/MD-II Date: 23rd July, 2014

To,
Chief Operations & Compliance,
National Commodity and Derivatives Exchange Ltd.,
Akruti Corporate Park, 1st floor, LBS Road,
Kanjur Marg (West), MUMBAI 400 079.

Subject: Permission for Forward contracts in Maize and Sugar at

NCDEX-reg.
Sir,
I am directed to refer to your letter no. MWS/FMC-519 dated 17th July
2014 and MWS/FMC-520 dated 17th July, 2014 on the subject cited above
and to convey in pursuance of Bye-law 4.1 read with Bye-law 4.2 of the Bye-
laws of the Exchange, the approval of the Commission for Forward contracts
viz. Non-transferable Specific Delivery (NTSD) and Transferable Specific
Delivery (TSD) in Sugar and Maize as per the approved contract
specifications enclosed at Annexure I & Annexure II respectively.

2. I am to add that trading in the above said contracts shall be subject to

Rules, Bye-laws and Regulations and also contract specifications of Maize
and Sugar as approved by the Commission and also the directions issued by
the Commission from time to time.

3. The permission for the above contracts shall also be subject to:
(i) Once the contracts are commenced, no terms of the contract
specifications should be changed without prior approval of the Commission.
(ii) The Exchange shall intimate the Commission soon after the trading in
the above said contracts is commenced and forward the details of the trading
activity to the Commission at the close of Business hours every day.

4. Exchange shall send a monthly report on the functioning of the various

contracts in respect of the above mentioned commodities along with market
report to the Commission.
5. The Exchange, being the first tier of regulation shall ensure that there
is no unhealthy speculative trading in the market, which may result in
cornering or artificial rigging up or down the prices by particular class of
members. If trading in the above mentioned deliveries results in
excessive/unhealthy speculation, the Commission will intervene and impose
stern measures to deal with the situation and if the situation so warrants,
revoke the permission granted to any or all the contracts.

6. The Exchange should ensure that the quality of commodities comply with
the regulations laid down by the other authorities like Food Safety Standards
Authority of India, AGMARK and BIS etc.

7. The contents of this letter may please be notified to the trade

immediately and the circulars released by the Exchange from time to time
should also be sent to the Commission.

8. The Exchange should ensure wide publicity of this and also to ensure
that all the market participants are fully aware of the details. In addition to
the meetings, the Exchange should also use advertisements in electronic and
print media.

Yours faithfully,
Sd/-
(Usha Pralhad Pol)
Director

Encl: as above

 Annexure : I

CONTRACT DESIGN FOR SUGAR FORWARDS

i)Transferable Specific Delivery (TSD)

Type of contract Forward

Symbol SUGFWD/RAWFWD

Name of Commodity Sugar/ Raw Sugar

Duration of Forward For Reference price contract

Contract
Maximum : 180 working days

For Fixed price contract

Maximum of 60working days

Traded Price For Reference price contract.

Premium / Discount over Basis Price

For Fixed price contract

Basis Price

Basis Price For Reference price contract.

NCDEX Sugar futures contract

For Fixed price contract

Price agreed at time of trade

Quality Basis Bid & Offer Parameters

Pricing Date - Mutually Agreed

Name of Mill & Location Mutually Agreed

Packaging Mutually Agreed

Moisture - Mutually Agreed Maximum Value

 ICUMSA - < or = Mutually Agreed ICUMSA VALUE

Grade Mutually agreed i.e M or S

Crop Year - Mutually Agreed

Fixed parameters :

Polarisation 99.80% Min

Sulphur Content - 70 PPM Max

Grain Size :

M Grade S Grade

Medium with > or = 85% Small with > or = 70%

retention on 1.18 mm retention on 600 micron
sieve size as determined sieve size as determined
by the methods by the methods
prescribed in IS:498- prescribed in IS:498-
2003 2003

BID & Offer Parameters (Raw Sugar)

Pricing Date - Mutually Agreed

Name of Mill & Location Mutually Agreed

Packaging Mutually Agreed

Moisture - Mutually Agreed Maximum Value

ICUMSA - < or = Mutually Agreed ICUMSA VALUE

Crop Year - Mutually Agreed

Polarisation Mutually Agreed

Note: All mutually agreed parameters should not be

violative of any applicable law and compliance of all
Laws including that of FSSAI standards in that regard
will be that of the respective Seller and Buyer and the
Exchange shall not be responsible or liable in any
manner whatsoever.

Minimum Trading / 10 MT
Delivery Unit
Pricing Date For Reference price Contract

As agreed between buyer and seller prior to trade but

not more than 180 working days from date of trade

For Fixed price Contract

As agreed between buyer and seller but not more than

60 working days.

Delivery location Rake point (FOR)/Truck (FOT)/Free on Board (FOB)/

Cost & Freight (CFR) and Exchange approved
warehouse as mutually agreed within 100 km of agreed
location.

Minimum Bid Quantity 10 MT and multiples of 10 MT thereafter

Quotation/base value Rs per quintal

Tick size Re 1/- per quintal

Buyer Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis Price

Fixed Price Contracts: 7.5 % of the trade value in case

of priced contracts of duration upto 30 days and 10 %
for duration beyond 30 days and upto 60 days .

Seller Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis Price

Fixed Price Contracts: 7.5 % of the trade value in case

of priced contracts of duration upto 30 days and 10 %
for duration beyond 30 days and upto 60 days.

Incremental Margin Reference Price Contracts:

Recomputed every Monday and the Exchange would

make a call for Incremental Margin based on price
movement.

In case the linked futures price has moved more than 3

% from the day of trade, incremental margin would be
recomputed earlier than the next Monday and if
required at greater frequency intervals.

Fixed Price Contracts: In case of fixed price contracts,

the Exchange shall intimate the incremental margins to
be brought in on the outstanding obligations based on
the volatility and at a frequency determined by the
Exchange.
Delivery logic Compulsory Delivery

Settlement Transferable Specific Delivery (TSD - End of day

position shall result in delivery)

Delivery Margin The initial margin and incremental margin blocked, if

any would be converted to delivery margin on the day
of pricing the contract.

Buyer Pay-in Second working day from pricing date

Delivery of goods 10 working days from pay in

Buyer / Seller Default 90 % of the margins blocked (Initial and Incremental)

from defaulting party will be passed to the counter
party as compensation and 10 % of the margins
blocked (Initial and Incremental) will be retained as
transaction charges by the Exchange.

Quantity Variation +/- 5%

Trade Timings Monday to Friday.

10 A.M. to 8 P.M.

Price Limits No price Limits

 Annexure: I contd..

i) Non-Transferable Specific Delivery (NTSD) of Sugar at NCDEX

Type of contract Forward

Symbol SUGFWD/RAWFWD

Name of Commodity Sugar/ Raw Sugar

Duration of Forward For Reference price contract

Contract
Minimum : 12 working days

Maximum : 180 working days

For Fixed price contract

Minimum : 12 working days

Maximum of 60 working days

Traded Price For Reference price contract.

Premium / Discount over Basis Price

For Fixed price contract

Basis Price

Basis Price For Reference price contract.

NCDEX Sugar futures contract

For Fixed price contract

Price agreed at time of trade

Quality Basis Bid & Offer Parameters

Pricing Date - Mutually Agreed

Name of Mill& Location Mutually Agreed

Packaging Mutually Agreed

Moisture - Mutually Agreed Maximum Value

ICUMSA - < or = Mutually Agreed ICUMSA VALUE

Grade Mutually agreed i.e M or S

Crop Year - Mutually Agreed

 Fixed parameters :

Polarisation 99.80% Min

Sulphur Content - 70 PPM Max

Grain Size :

M Grade S Grade

Medium with > or = 85% Small with > or = 70%

retention on 1.18 mm retention on 600 micron
sieve size as determined sieve size as determined
by the methods by the methods
prescribed in IS:498- prescribed in IS:498-
2003 2003

BID & Offer Parameters (Raw Sugar)

Pricing Date - Mutually Agreed

Name of Mill& Location Mutually Agreed

Packaging Mutually Agreed

Moisture - Mutually Agreed Maximum Value

ICUMSA - < or = Mutually Agreed ICUMSA VALUE

Crop Year - Mutually Agreed

Polarisation Mutually Agreed

Note: All mutually agreed parameters should not be

violative of any applicable law and compliance of all
Laws including that of FSSAI standards in that regard
will be that of the respective Seller and Buyer and the
Exchange shall not be responsible or liable in any
manner whatsoever.

Minimum Trading / 10 MT
Delivery Unit

Pricing Date For Reference Price Contract

As agreed between buyer and seller prior to trade but

not less than 12 working days from date of trade and
not more than 180 working days from date of trade
 For Fixed Price Contract

As agreed between buyer and seller but not less than

12 working days and not more than 60 working days.

Delivery location Rake point (FOR)/Truck (FOT)/Free on Board (FOB)/

Cost & Freight (CFR) and Exchange approved
warehouse as mutually agreed within 100 km of agreed
location.

Minimum Bid Quantity 10 MT and multiples of 10 MT thereafter

Quotation/base value Rs per quintal

Tick size Re 1/- per quintal

Buyer Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis Price

Fixed Price Contracts: 7.5 % of the trade value in case

of priced contracts of duration upto 30 days and 10 %
for duration beyond 30 days and upto 60 days.

Seller Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis Price

Fixed Price Contracts: 7.5 % of the trade value in case

of priced contracts of duration upto 30 days and 10 %
for duration beyond 30 days and upto 60 days .

Incremental Margin Reference Price Contracts:

Recomputed every Monday and the Exchange would

make a call for Incremental Margin based on price
movement.

In case the linked futures price has moved more than 3

% from the day of trade, incremental margin would be
recomputed earlier than the next Monday and if
required at greater frequency intervals.

Fixed Price Contracts: In case of fixed price contracts,

the Exchange shall intimate the incremental margins to
be brought in on the outstanding obligations based on
the volatility and at a frequency determined by the
Exchange.

Delivery logic Compulsory Delivery

Settlement Non-transferable Specific Delivery (NTSD)

 Delivery Margin The initial margin and incremental margin blocked, if
any would be converted to delivery margin on the day
of pricing the contract.

Buyer Pay-in Second working day from pricing date

Delivery of goods 10 working days from pay in

Buyer / Seller Default 90 % of the margins blocked (Initial and Incremental)

from defaulting will be passed to the counter party as
compensation and 10 % of the margins blocked (Initial
and Incremental) will be retained as transaction
charges by the Exchange.

Quantity Variation +/- 5%

Trade Timings Monday to Friday.

10 A.M. to 8 P.M.

Price Limits No price Limits

The participants shall be liable for all taxes and other regulatory requirements of State/
Central laws in relation to the forward contracts undertaken by them.

As this is a compensation guarantee contract it is deemed that the Participant/s entering

into this contract has/have indemnified the Exchange (NCDEX), protect, and hold harmless
the Exchange, its directors, officers, affiliates, employees and agents from and against any
and all losses, liabilities, judgments, suits, actions, proceedings, claims, damages, costs
(including legal costs) resulting from the trade in the Forward contracts undertaken by
them on the Exchange platform.

In case either the buyer or the seller fails to provide towards an incremental margin call
the concerned party shall be granted a grace period of 2 additional working days. In case
the buyer / seller has still not provided for the same, the trade shall be deemed to be
cancelled and the margin blocked amount shall be forfeited. 90 % of such amount collected
from the defaulting party shall be paid as compensation to the counterparty and 10 %
shall be retained by the Exchange as transaction charges.
 Annexure II:

CONTRACT DESIGN FOR MAIZE FORWARDS at NCDEX

i) Transferable Specific Delivery (TSD)

Type of contract Forward

Symbol MAIZEFWD

Name of Commodity Maize

Duration of Forward Contract For Reference price contract

Maximum : 180 working days

For Fixed price contract

Maximum of 60 working days

Traded Price For Reference price contract.

Premium / Discount over Basis Price

For Fixed price contract

Basis Price

Basis Price For Reference price contract.

NCDEX Maize futures contract

For Fixed price contract

Price agreed at time of trade

Quality Basis Bid & Offer Parameters

Pricing Date Mutually Agreed

Location - Mutually Agreed

Packaging- Mutually Agreed

Moisture Mutually Agreed Maximum Value

 Broken/Damage - Mutually Agreed

Grain Count- Mutually Agreed

Foreign Matter Mutually Agreed

Note: All mutually agreed parameters should not

be violative of any applicable law and compliance
of all Laws including that of FSSAI standards in
that regard will be that of the respective Seller
and Buyer and the Exchange shall not be
responsible or liable in any manner whatsoever

Minimum Trading / Delivery 10 MT

Unit

Pricing Date For Reference price Contract

As agreed between buyer and seller prior to trade

but not more than 180 working days from date of
trade

For Fixed price Contract

As agreed between buyer and seller but not more

than 60 working days.

Delivery location/point Approved rake point / truck & Exchange approved

warehouse as mutually agreed within 100 km of
agreed location.

Minimum Bid Quantity 10 MT and multiples of 10 MT thereafter

Quotation/base value Rs per quintal

Tick size Re 1/- per quintal

Buyer Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis
Price

Fixed Price Contracts: 7.5 % of the trade value in

case of priced contracts of duration upto 30 days
and 10 % for duration beyond 30 days and upto
60 days.
Seller Initial Margin Reference Price Contracts: 5 % of the trade value
determined based on the Trade Price and Basis
Price

Fixed Price Contracts: 7.5 % of the trade value in

case of priced contracts of duration upto 30 days
and 10 % for duration beyond 30 days and upto
60 days.

Incremental Margin Reference Price Contracts:

Recomputed every Monday and the Exchange

would make a call for Incremental Margin based
on price movement.

In case the linked futures price has moved more

than 3 % from the day of trade, incremental
margin would be recomputed earlier than the next
Monday and if required at greater frequency
intervals.

Fixed Price Contracts: In case of fixed price

contracts, the Exchange shall intimate the
incremental margins to be brought in on the
outstanding obligations based on the volatility and
at a frequency determined by the Exchange.

Delivery logic Compulsory Delivery

Settlement Transferable Specific Delivery (TSD - End of day

position shall result in delivery)

Delivery Margin The initial margin and incremental margin

blocked, if any would be converted to delivery
margin on the day of pricing the contract.

Buyer Pay-in Second working day from pricing date

Delivery of goods 10 working days from pay in

Buyer / Seller Default 90 % of the margins blocked (Initial and

Incremental) from defaulting party will be passed
to the counter party as compensation and 10 %
of the margins blocked (Initial and Incremental)
will be retained as transaction charges by the
Exchange.
Quantity Variation +/- 5%

Trade Timings Monday to Friday.

10 A.M. to 8 P.M.

Price Limits No price Limits

 Annexure : II cond..

ii) Non-Transferable Specific Delivery (NTSD) of Maize at NCDEX

Type of contract Forward

Symbol MAIZEFWD

Name of Commodity Maize

Duration of Forward Contract For Reference price contract

Minimum : 12 working days

Maximum : 180 working days

For Fixed price contract

Minimum : 12 working days

Maximum of 60 working days

Traded Price For Reference price contract.

Premium / Discount over Basis Price

For Fixed price contract

Basis Price

Basis Price For Reference price contract.

NCDEX Maize futures contract

For Fixed price contract

Price agreed at time of trade

Quality Basis Bid & Offer Parameters

Pricing Date Mutually Agreed

Location - Mutually Agreed

Packaging- Mutually Agreed

 Moisture Mutually Agreed Maximum Value

Broken/Damage - Mutually Agreed

Grain Count- Mutually Agreed

Foreign Matter Mutually Agreed

Note: All mutually agreed parameters should

not be violative of any applicable law and
compliance of all Laws including that of FSSAI
standards in that regard will be that of the
respective Seller and Buyer and the Exchange
shall not be responsible or liable in any manner
whatsoever

Minimum Trading / Delivery Unit 10 MT

Pricing Date For Reference Price Contract

As agreed between buyer and seller prior to trade

but not less than 12 working days from date of
trade and not more than 180 working days from
date of trade

For Fixed Price Contract

As agreed between buyer and seller but not less

than 12 working days and not more than 60
working days.

Delivery location/point Approved rake point/truck & Exchange approved

warehouse as mutually agreed within 100 km of
agreed location.

Minimum Bid Quantity 10 MT and multiples of 10 MT thereafter

Quotation/base value Rs per quintal

Tick size Re 1/- per quintal

Buyer Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis
Price
 Fixed Price Contracts: 7.5 % of the trade value in
case of priced contracts of duration upto 30 days
and 10 % for duration beyond 30 days and upto
60 days.

Seller Initial Margin Reference Price Contracts: 5 % of the trade value

determined based on the Trade Price and Basis
Price

Fixed Price Contracts: 7.5 % of the trade value in

case of priced contracts of duration upto 30 days
and 10 % for duration beyond 30 days and upto
60 days.

Incremental Margin Reference Price Contracts:

Recomputed every Monday and the Exchange

would make a call for Incremental Margin based
on price movement.

In case the linked futures price has moved more

than 3 % from the day of trade, incremental
margin would be recomputed earlier than the next
Monday and if required at greater frequency
intervals.

Fixed Price Contracts: In case of fixed price

contracts, the Exchange shall intimate the
incremental margins to be brought in on the
outstanding obligations based on the volatility and
at a frequency determined by the Exchange.

Delivery logic Compulsory Delivery

Settlement Non-transferable Specific Delivery (NTSD)

Delivery Margin The initial margin and incremental margin

blocked, if any would be converted to delivery
margin on the day of pricing the contract.

Buyer Pay-in Second working day from pricing date

Delivery of goods 10 working days from pay in

Buyer / Seller Default 90 % of the margins blocked (Initial and

Incremental) from defaulting party will be passed
to the counter party as compensation and 10 %
of the margins blocked (Initial and Incremental)
 will be retained as transaction charges by the
Exchange.

Quantity Variation +/- 5%

Trade Timings Monday to Friday.

10 A.M. to 8 P.M.

Price Limits No price Limits

The participants shall be liable for all taxes and other regulatory requirements of State/
Central laws in relation to the forward contracts undertaken by them.

As this is a compensation guarantee contract it is deemed that the Participant/s entering

into this contract has/have indemnified the Exchange (NCDEX), protect, and hold harmless
the Exchange, its directors, officers, affiliates, employees and agents from and against any
and all losses, liabilities, judgments, suits, actions, proceedings, claims, damages, costs
(including legal costs) resulting from the trade in the Forward contracts undertaken by
them on the Exchange platform.

In case either the buyer or the seller fails to provide towards an incremental margin call
the concerned party shall be granted a grace period of 2 additional working days. In case
the buyer / seller has still not provided for the same, the trade shall be deemed to be
cancelled and the margin blocked amount shall be forfeited. 90 % of such amount collected
from the defaulting party shall be paid as compensation to the counterparty and 10 %
shall be retained by the Exchange as transaction charges