| Type of Contract |
Futures Contract Specifications
for Certified Emission Reduction Units (CERs) |
| Name of Commodity |
Certified Emission Reduction (CER)
– Carbon Credits |
| Ticker symbol |
CERNCDEX |
| Trading System |
NCDEX Trading System |
| Basis |
Mumbai (NCDEX) - Exclusive
of all Taxes, Levies and Duties |
| Unit of trading |
One lot of 500 CERs
(Carbon Credits) |
| Delivery unit |
One lot of 500 CERs
(carbon Credits) |
| Quotation/base value |
Rs. per CER |
| Tick size |
Rs. 0.20 |
| Quality
specification |
Certified Emission
Reduction (CERs) is a unit pursuant to Article 12 and requirements
there under, as well as the relevant provisions in the CDM modalities
and procedures and is equal to one metric tonne of carbon dioxide
equivalent, calculated using global warming potentials defined by
decision 2/CP.3 or as subsequently revised in accordance with Article
5 of the Kyoto Protocol or its successor agreements or decisions under
United Nations Framework Convention on Climate Change. |
| Quantity variation |
Up to +/- 250 CERs |
| Delivery center |
At notified delivery centre at
MUMBAI |
| Hours of Trading |
As per directions
of the Forward Markets Commission from time to time. Currently,
Mondays through Fridays: 10:00 a.m. to 11:30 p.m.
10:00 a.m. to 11:55 p.m. (during US day light saving period)
Saturdays: 10:00 a.m. to 2:00 p.m.
The Exchange may vary the above timing with due notice |
| Opening of contract |
As per launch calendar |
| Closing of contract |
All open positions
for which delivery intentions have not been received or for which
delivery intentions have been rendered but remain unmatched for want
of counterparty to settle delivery, will be cash settled at Final
Settlement Price. |
| Maximum price fluctuation |
Base daily price fluctuation
limit is (+/-)4%. If the trade hits the prescribed base daily price
limit, the limit will be relaxed up to (+/-)6% without any break/
cooling off period in the trade. In case the daily price limit of
(+/-)6% is also breached, then after a cooling off period of 15 minutes,
the daily price limit will be further relaxed up to (+/-) 9%. Trade
will be allowed during the cooling off period within the price band
of (+/-)6%. In case of price movement in International markets which
is more than the maximum daily price limit (currently 9%), the same
may be further relaxed in steps of 3% with the approval of FMC. |
| Position limits |
Member level limit:
66000 lots or 15% of market wide open position which ever is higher
Client: overall 11000 lots
The above limits will not apply to bona fide hedgers. |
| Initial margin |
6% |
| Special margins |
In case of additional volatility,
a special margin at such other percentage, as deemed fit, will be
imposed in respect of outstanding positions, which will remain in
force as long as the volatility exists, after which the special margin
may be relaxed. |
| Due date/Expiry of
contract |
10th day of the delivery
month.
If 10th day happens to be a Saturday, Sunday or Holiday, then the
due date shall be the immediately preceding trading day of the Exchange
|
| Delivery logic |
Both options |
| 10 days prior to expiry |
Buyer Clearing Members with open
long position may seek any specific additional requirement/information
from Seller Clearing Member though the Exchange system. Any such request
for additional information will be considered at the discretion of
the Exchange and any information made available by the seller can
be conveyed to all the Clearing Members with open long position subject
to any terms and condition that may be imposed by the Exchange. |
| Between 5 and 3 days prior to
expiry |
The delivery intention can be
given during three business days (excluding Saturday) from fifth business
day to third business day prior to the expiry of the contract. The
Clearing Member with short open position can give their intention
to deliver CERs along with the "compulsory requirement / information
from seller". Seller may also submit additional information as
sought by the Buyer Clearing Members through Exchange system. Seller
Clearing Member can also submit any special terms and conditions of
sale of CER as may be permitted by the Exchange on the Exchange trading
system. |
| From 2 days prior to expiry |
The Buyer Clearing Member with
the long open position can give their intention to take delivery and
record their rejection of projects which they do not intent to consider
for buying CERs. |
| At Expiry |
The Exchange will match the intention
of the buyers and sellers and will allocate CERs for delivery. The
actual delivery will be effected to the extent of matched quantity
and unmatched quantities will be closed out at the Final Settlement
Price at the expiry of the contract. |
| Expiry +1 day |
If the Expiry Date is E then,
Pay-in and Pay-out for unmatched intentions would happen on E+1 day.
If such a E+1 day happens to be a Saturday, a Sunday or a holiday
at the Exchange, clearing Banks, Pay-in would be effected on the next
working day. |
| Expiry +5 day |
The seller and the buyer Clearing
Members will submit required documents and complete "Post Expiry
Formalities" as laid down by the Exchange. The Pay-in from the
buyer, Payout to Sellers and transfer of CERs to Buyers will happen
for those CERs where the formalities are completed, on Fifth Business
day (excluding Saturday, Sunday or a holiday at the Exchange, Clearing
Banks) after expiry of the contract. The failure of the Seller or
Buyer to complete the formalities will be considered as “failure
to meet delivery obligations” and the defaulter(s) will be liable
to pay penalty as specified by the Exchange. The decision of the Exchange
will be final and binding on both Buyer and Seller Clearing Member
and their clients as the case may be. |
| Pay-in and Pay-out |
Schedule for pay-in and pay-out
will be declared by the Exchange from time to time. |
| Penalty structure |
The penalty structure for failure
to meet delivery obligations will be as per Circular no. NCDEX/TRADING-091/2007/235
dated October 4, 2007 The Exchange will have right to change the penalty
structure. |
| Change of Delivery Structure |
The Exchange reserves the right
to change the delivery procedure in the interest of the market participants
after approval of the Forward Markets Commission. |
| Final Settlement Price |
The Exchange proposes to do price
polling for the guaranteed deliverable CERs for the corresponding
contract expiry date from the national and international sources to
decide the Final Settlement Price. International polled prices will
be converted into India Rupee equivalent on the basis of Exchange
rate as notified by the Reserve Bank of India on that particular day |