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Untitled Document

Untitled Document
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Frequently Asked Questions
 
  Do's & Don'ts in Commodity Futures Market
 
Membership
1 What are the benefits in futures trading in commodities?
2 Who can become member of NCDEX?
3 Can we apply for the membership under the HUF account?
4 Is NCDEX a separate legal corporate entity?
5 What are the member ship charges?
6 How is the net worth calculated for a new subsidiary?
7 Whether the networth of the holding company will be taken into consideration for the same?
8 How could a new company submit the 3 years balance sheet?
9 Who will certify the various certificates, which are required to be certified by the auditor of the company?
10 Is it a must that the individual should be a graduate?
11 What is the lock in period for the interest free security deposit?
12 When is the security deposit eligible for refund in case of surrender?
13 What is the essential requirement for collateral?
14 Are the course materials available for the proposed exam to be undertaken by the core dealer?
15 Whether we can apply for the membership of NCDEX in the same name in which we are holding the membership of NSEIL?
16 Whether exposure will be allowed against base capital and collateral?
17 What are the trading hours?
18 Please indicate the permissible brokerage structure and brokerage pattern.
19 Whether Regulators, i.e., Forward Market Commission, levy any turnover fee?
20 Is there any additional cost towards acquiring membership in addition to what has been specified in the application form?
21 Are the memberships to be taken afresh for each of the products to be traded in NCDEX from time to time?
22 Can one use the NSE terminal to trade in NCDEX?
23 Whether one can use the idle NSE terminal for trading on NCDEX?
24 What is the meaning of dominant promoter group?
25 What are the commodities identified for trading?
26 Which are the other multi commodity exchanges in the country?
27 How NCDEX is different from other exchanges?
28 Will the exchange plan to have market makers?
29 What is your membership scrutiny process?
30 What should be the main objective clause in the Memorandum of Association to aid in trading in commodity futures?
31 Whether a designated director in an entity having membership of BSE assume similar responsibility /designation in the new subsidiary formed for taking membership of NCDEX.
32 Whether qualifying director in entity being member of NSE assume similar responsibility /designation in the new subsidiary formed for commodity exchange?
33 At what point of time one has to comply with the Net worth requirements?
34 Can a partnership deed be used for address proof for partnership firm's registered office address?
35 IF Partnership Deed is notarized, in that case is it acceptable?
36 In case of Corporate opening a trading account to trade in commodities futures, Board Resolution authorizing one of the director or authorised person to sign all the documents for commodities future trading as well as place buy / sell orders will suffice or the same should be there in Memorandum & Articles of Association.?
37 In case of corporate opening a trading account to trade in commodities futures, only board resolution will suffice or the same should be there in Memorandum & Articles of Association.
 
 
Collaterals
1 To which address should the collateral related documents be sent?
2 Which are the approved banks that can issue Bank Guarantee?
3 What is the Period and validity of Bank Guarantee?
4 What should be the value of stamp paper on which BG is executed?
5 What are the discrepancies commonly observed in a Bank Guarantee?
6 When should the issuing bank confirm submission of collaterals?
7 Are the bank guarantee formats different for Base Capital / Security deposit and Additional Base Capital?
8 What is the process to be followed for Submission of FDR instead of Bank Guarantee towards Base Capital?
9 When are members disabled for requirements in Collateral deposits?
10 What are the indications given to members for renewal of their collaterals?
11 What are the reports given for information on collaterals?
 
 
Settlement
1 Is NCDEX going to have its Clearing Corporation?
2 Who maintains and the Settlement Guarantee Fund?
3 How would contracts settle?
4 What would be the settlement period?
5 Would you be providing for deliveries?
6 Are deliveries compulsory?
7 Would additional margins be levied for deliverable positions?
8 How would the settlement take place in commodity futures market?
9 How would a buyer take physical delivery?
10 How would a seller get the electronic balance for the physical holdings?
11 How would the seller give an invoice to the buyer?
12 How many warehouses would be there?
13 How would you accredit warehouses?
14 Whether the accredited warehouses would be dedicated warehouses?
15 Who would decide the warehousing charges?
16 Would health checks and inventory verification be carried out?
17 What happens to the sales tax?
18 How would the buyer give a declaration for re-sale in case of last point collection of tax?
19 How will you ensure uniformity in delivered grades / varieties?
20 Would there be any premium / rebates for the difference in quality
21 Who will be certifying / assaying agencies. Will they also give the time validity for the commodities certified?
22 What happens when the commodities reach the validity date?
23 Would commodities be accepted without assayer's certificate?
24 Can commodities be re-deposited in the warehouse after the validity period of the assayer's certificate?
25 What would be transaction charges?
26 What is the procedure for handling bad delivery / part delivery?
27 How would disputes be resolved?
28 Who would be the clearing bankers?
29 Who would be the depository participants?
30 What is the procedure for entering / modifying / canceling delivery intention in Trader (NEAT) trading terminal?
31 What is the procedure for entering / modifying / canceling delivery intention in Tradex trading terminal?
 
Technology
1 Would the same technology infrastructure of NSE be used?
2 Why is the same network of NSE not being considered?
3 Are VSATs compulsory?
4 Which protocol is being used?
5 Who would provide the services?
6 When would the payment be made?
7 Is there a facility of buy back of VSAT in case of surrender of membership?
   
Sales Tax
1 Does the trading / clearing member need to have sales tax registration?
2 Do the clients/participants need to have sales tax registration?
3 In which state sale tax registration is to be obtained?
4 What is rate of sales tax applicable?
5 Who is responsible for payment of sales tax?
6 When is the sales tax payable by the buyers?
7 Can sales tax exemptions be availed? How?
8 What are the procedure for submission of the support documents /certificates / declarations for availing the sales tax exemptions?
9 If a client/participant trades in more than one commodity having delivery centers in different States does he need sales tax registration in each of such states?
10 How should the client/participant move the commodities into the designated warehouses?
 
Stamp Duty
1 Where can a person verify the percentage of stamp duty applicable on futures contract?
2 How is stamp duty applicable?
3 Can a member pay stamp duty in states other than where the client is registered and trading?
4 How is the Stamp Duty to be paid, Is it State Wise?
5 Can a member pay stamp duty of all his clients at one location?
6 If Stamp Duty is applicable in two states, one where the Client is registered and the other i.e. the registered office then, Is he required to pay stamp duty at both places?
7 Is stamp duty applicable for Pro Trading also?


Service Tax
1 What is Service Tax? How many services are covered?
2 Who is liable to pay service tax?
3 What is the rate of Service Tax?
4 On what basis service tax is payable - on the amount billed or received?
5 Is it compulsory to register as a service provider?
6 Whether registration should be done for each service provided by the service provider?
7 How to get registration?
8 How to pay Service Tax?
9 What is the time limit for payment of Service Tax?
10 In case of delayed payment, whether interest is to be paid?
11 What are the records to be maintained by the service provider (member)?
12 When can the member claim CENVAT credit?


CTCL Terminal
1 How many CTCL Terminals can be created on one CTCL user id?


Certified Emission Reductions (CERs)
1 What are Greenhouse Gases (GHGs)?
2 Which are the major greenhouse gases (GHGs) and what is a carbon dioxide equivalent (CO2e)?
3 What is Carbon Trading?
4 Why are GHGs traded?
5 What are UNFCCC and Kyoto Protocol?
6 What alternative mechanisms for GHG emission reductions does the Kyoto Protocol (KP) provide for? How do developing countries participate in these mechanisms?
7 What is CDM?
8 What are Certified Emission Reductions (CERs) and how are they issued?
9 What are Emission Allowances?
10 What is the market potential of CERs?
11 Which other exchanges are organizing trading of CERs?
12 What is so unique about the NCDEX initiative?
13 What will be major features of NCDEX CER futures contract?
14 How will deliveries of CERs take place?
15 Why is the NCDEX CER futures contract a DEC expiry contract?
16 What are the price indicators for CERs?
17 Who are the major buyer and sellers of carbon credits?

 
 
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