Contract Specifications of Mustard Seed - MCX

Contract Specifications of Mustard SeedSymbolDescriptionJanuary ContractMUSTARDJPRMUSTARDJPRMMMYYContracts available for trading21 st June of the previous year to 20 th January of the contract yearFebruary contract21 st July of the previous year to 20 th February of the contract yearMay Contract21 st October of the previous year to 20 th May of the contract yearJune contract21 st November of the previous year to 20 th June of the contract yearJuly Contract21 st December of the previous year to 20th July of the contract yearAugust contract21 st January to 20 th August of the contract yearSeptember Contract21 st February to 20 th September of the contract yearOctober contract 21 st March to 20 th October of the contract yearNovember Contract 21 st April to 20 th November of the contract yearDecember contract 21 st May to 20 th December of the contract yearTrading periodTrading sessionTrading unitQuotation/Base ValuePrice QuoteMaximum order sizeTick size (minimumprice movement)TradingMondays through SaturdaysMonday to Friday: 10.00 a.m. to 5.00 p.m.Saturday: 10.00 a.m. to 2.00 p.m.10 MT20 kgDaily price limits 3%Initial margin 5%Special MarginEx- Jaipur (Exclusive of VAT/Sales Tax)1000 MT5 paise per 20 kgIn case of additional volatility, a special margin at such percentage, asdeemed fit, will be imposed immediately on both buy and sale side inrespect of all outstanding position, which will remain in force for next 2days, after which the special margin will be relaxed.Maximum allowableClient level : 20000 MT

open position Member level: 60000 MT or 15% of the open market position, whichever ishigher.Delivery unitFor near month contract :Client level: 6000 MTMember level: 18000 MT or 15% of the total near month open position,whichever is higher(As per FMC letter no. 6/1/2008-MKT-II dated February 11, 2008)Delivery10 MT (with tolerance limit of 200 kg) which means that if the seller deliversany quantity between 9.80 MT to 10.20 MT, it will be construed as adequatedischarge of his delivery obligation of 10 MT, though he will get the valueonly for actually quantity delivered by him.Delivery center(s)Additional DeliveryCenterDelivery periodmarginQuality Specifications1. Oil content at 5%moisture levelExchange designated warehouse at JaipurExchange designated warehouse at Sriganaganagar, Kota, Alwar, Hapur,Hisar, Morena25 %Basis: 42% (at 5% moisture content level)Acceptable upto 37% with 1:1 discountAcceptable above 42% with 1:1 premiumRejectable below 37%2. Foreign Matter Sand& Silica, DamagedSeed0.5%Acceptable upto 2% with 1:1 discountRejectable above 2%3. Moisture 5 %Acceptable upto 6.5% with 1:1 discountRejectable above 6.5%4. FFA 1.5% (maximum)Rejectable above 1.5%5. Other conditions It should be free from non-edible seeds such as Mahuas, Castor, Neem,Taramira and Argemone seeds.It should be free from any foul odour.6. Packing Mustard seed should be delivered in 86 Kg. gross weight basis with avariation of +/- 2 % in new/sound unmended A-Twill bags or once usedsugar bag without any spillage.Delivery LogicCompulsoryDelivery and Settlement procedure of Mustard SeedDelivery logicCompulsory delivery

Delivery ModeTender PeriodDelivery periodTender notice / DeliveryPay-inEarly Delivery Pay inMode of communicationIncremental MarginDelivery Period MarginExemption fromDelivery Period MarginDelivery allocation- Date- RateDelivery pay-inDelivery pay-outPay-in of fundsPay-out of fundsPenal ProvisionCompulsory DematLast 5 working days of the contract expiry and 1 st working day after expiryof the contractThree working days after expiry of the contractThe Seller Clearing Member will have to send a request to his DP todeliver the commodity to the exchange as per the scheduled delivery payin day.Any outstanding positions will be marked for delivery at the expiry of thecontract.Seller Clearing Member can make the delivery pay in on any of the tenderperiod days. In case if the early pay in is made on the scheduled deliverypay in day then it will not be treated as early pay in.Fax or courier3% incremental margin for last 5 days on all outstanding positions.25% on marked quantity.Delivery Period Margin is exempted after delivery pay in is received by theexchange in its CC pool account during the tender period.On contract expiry dateAt DDR (Due date rate)1 st working day after expiry of the contract by 5.00 pm. (Accordingly, themembers are required to submit the delivery instructions to their DPs wellin advance so as to adhere to the pay-in time of delivery)E+2 working days after 5.00 p.m. (E - Expiry date).E+1 working days by 11.00 a.m.E+2 working days after 5.00 p.m.In case the buyer opts for second sampling the funds pay-out will be doneonly after completion of sampling procedure but not later than 3 workingdays after the delivery pay-out.I – Seller DefaultSeller having open position on expiry of the contract has to compulsorilydeliver.If the seller fails to deliver, then the open position will be closed out athigher of the following two rates1. Due Date Rate (DDR) of the contract or2. Spot market price, as disseminated by the Exchange, on the date ofthe pay-in default/refusal by the seller to give delivery.Accordingly,If the spot market price is higher than DDR as mentioned above, thedifference between the two or 4% of DDR whichever is higher (asreplacement cost) will be debited to the seller.Additionally,Penalty of 2.5% of DDR will be debited from such defaulting sellerOut of penalty, 2% penalty will be credited to the IPF and 0.5% will becredited to the counter party.

Whereas, out of the close out amount / replacement cost as mentionedabove, 90% will be credited to the counter party and 10% of the same willbe retained by the Exchange towards administrative expenses.II – Buyer DefaultThe buyer will have to compulsorily take the delivery of goods andmake payment. Failing which, the Exchange will dispose such goodsin the market at the risk and cost of the buyer as per the Exchangeauction mechanism as prescribed in Annexure A.Penalties & charges to be debited to defaulting Buyer:S.NoWhereAuctionfullyconductedis1 Penalty @2.5% on DDR&2 Differencebetween DDR& Auction priceif Auction priceis lower thanDDRWhere Auction ispartly conductedPenalty @ 2.5% onDDR&Difference betweenDDR & Auction priceif Auction price islower than DDR tothe tune of auctionedquantityWhere no Auctionis conductedPenalty @ 2.5% onDDRNA&(includingproportionatequality andquantitydifferences)&(includingproportionate qualityand quantitydifferences)&3 NA Higher of,i) Close out amount /charges onunauctioned quantityas differencebetween DDR &Auction price, ifAuction price islower than DDRORii) Replacement costof minimum 4% onunauctioned quantityat DDR&Higher of,i) Close out amount /charges onunauctioned quantityas difference betweenDDR & Spot price ondate of Auction, ifSpot price is lowerthan DDRORii) Replacement costof minimum 4% onunauctioned quantityat DDR.Out of penalty of 2.5%, 2% penalty will be credited to the IPF whereas,0.5% will be credited to the counter party of un-auctioned quantity.Whereas, out of the close out amount for un-auctioned quantity as

mentioned above and the replacement cost recovered, 90% will becredited to the counter party and 10% of the same will be retained by theExchange towards administrative expenses.Taxes, Duties, Cess andLeviesClose out of openpositionsDue Date RatePremium and discountsapplicable at additionaldelivery centersOdd lot TreatmentAdjustment ofTransportation CostAdjustment for OilcontentAdjustment of weightaccording to moisturediscountWarehouse, fumigation,insurance andtransportation ChargesBuyer’s option forlifting of DeliveryFurther, if the defaulting (original) buyer fails to make arrangement of payinof the penalty, replacement cost, close out amount, etc., before 9.45 amon E+4 day will render liable for such other actions as Exchange deemsappropriate including deactivation of his trading terminals.Local taxes/ VAT wherever applicable is to be paid by the seller to thesales tax/VAT authorities on all contracts resulting in delivery. Accordinglythe buyer will have to pay the taxes/VAT to the seller at the time ofsettlement.In case of sales tax exemption, such exemption certificate should besubmitted before settlement of the obligation.Incase of Inter-State movement, Buyer has to submit requisite forms orpay CST as applicable.All outstanding positions not settled by way of delivery on the expiry ofcontract shall be closed out at Due Date Rate and respective pay-in andpay-out of funds of such close out shall be effected on 1 st day after the lasttrading day by 11.00 a.m. along with penalties as per penal provision.Exchange shall take spot prices from a panel of different entities from spotmarket and shall compute the daily average price. DDR will be calculatedby way of taking the simple average of last 3 day spot market prices socomputed.Further, the Govt’s procurement price or minimum support pricewill not be considered for this purpose.Sriganganagar: (-)7Kota: At ParAlwar: At ParHapur: At ParHisar: (-)3Morena: At ParNot applicableNot applicableFor adjustment relating to oil content, the price of mustard oil prevailing onthe date of delivery, as determined by the Exchange, will be considered.For example, if on the date of delivery, the price of mustard seed is Rs.320 per 20 Kg, price of mustard oil is Rs. 40 per Kg, and the seller deliversmustard seed of 40 % oil content, then discount will be calculated asfollows:• Price of mustard seed per quintal—Rs. 1600 i.e. (320 * 5)• Price of 2 Kg i.e. (42 % - 40 %) mustard oil = Rs. 80 i.e (40 * 2)So, discount would be Rs. 80 /5 = Rs. 16 Hence, the seller will get Rs.320- Rs. 16 = Rs. 304.00 per 20 Kg.Quantity to be delivered to the buyer at the time of lifting shall be adjustedin proportion to the moisture discount with base moisture of 5%.For example:Inward moisture is 6%, Inward quantity is 100 kg. If outward moisture is5% then buyer will receive 99 kg instead of 100 kg since buyer is alreadycompensated for 1 kg on moisture discount.-Borne by the seller upto commodity pay-out date-Borne by the buyer after commodity pay-out dateBuyer will not have any option about choosing the place of delivery andwill have to accept the delivery as per allocation made by the Exchange.

Delivery CenterAdditional DeliveryCenterDelivery Order (Sellergiving delivery to theExchange)Delivery GradesEvidence of Stock inpossessionSampling and Analysisat the time of DeliverySampling ProcedureExchange designated warehouse at JaipurExchange designated warehouse at Sriganaganagar, Kota, Alwar, Hapur,Hisar, MorenaSeller submits the Delivery order in specified format giving details ofMembers / Registered Non-Members who shall perform delivery.Each delivery order (ICIN) issued shall be in multiples of minimum deliverylots and shall be designated for only one delivery center and one locationin such center. Further, the goods being delivered under the said ICINshould be valid for a period of 15 days after the expiry of the contract (i.e.ICIN should be valid till 5 th day of the following month)It shall be accompanied with Invoice. Delivery order once submittedcannot be withdrawn or cancelled or changed unless so agreed by theExchange in writing.The members tendering delivery will have the option of delivering suchgrades of goods as permitted by the Exchange under the contractspecifications. The buyer will not have any option to select a particulargrade and the delivery offered by the seller and allocated by the Exchangeshall be binding on him.At the time of issuing the delivery order, the member must prove to theExchange that he holds stocks of the quantity and quality specified in thedelivery order at the declared delivery center. This should be substantiatedby way of producing warehouse receipt.In case the buyer does not agree to the Surveyor's report as to the qualityof the commodity, he shall desire for second sampling and intimate theExchange in writing within 48 hours of the pay-out date.The system of drawing of samples tendered for delivery will be asprescribed in the Bureau of Indian Standards procedure.. Three Samplesshall be drawn as under:• First Sample - for the buyer• Second Sample - for the seller• Third Sample - for final reference, if it becomes necessaryIf the first sample collected by the buyer and analyzed by the surveyorappointed by him, conforms to the specifications, then the goods tenderedfor delivery shall be accepted and no subsequent claims from the buyerregarding quantum of rebate or any other indemnification shall beadmissible nor sellers shall be obliged to pass any sealed samples to thebuyer if requested subsequently. The sampling methods to be adopted foranalysis will be decided by the Exchange.

Failure of First SampleIf the first sample as examined by the buyer's surveyor fails to conform tothe quality standards specified, the buyer shall intimate the seller within 72hours of collection of sealed sample along with a copy of the analyst'sreport. The seller shall immediately send the second sealed sample to anapproved laboratory, which is also agreed by the buyer. The result of thesame shall be binding on both the parties. In the event the buyer and sellerdo not mutually reach agreement with the results of the second sampletest, then the Exchange shall send the third sealed sample to any one ofthe approved laboratories / surveyor, as decided by the Exchange.Final Surveyor’s ReportThe analyst's report of the approved and agreed independent laboratoryshall be forwarded by the Exchange to the parties immediately on receiptof the same. In such case, the final payment to the seller will be made onthe basis of test report received by the Exchange pursuant to the third test.The Exchange will also direct the party, in whose favour the result isdeclared to collect the cost of tests and detention charges from the otherparty. In case the commodity stands rejected then it will tantamount tofailure on the part of the seller to give delivery, which shall be closed outas per the due date rate treating the same as shortage.Obligations of theIndependent AnalystIn order to ensure that tests are exactly comparable and that the resultsare consistent, the independent analyst shall determine the particularanalytical test by applying the methods specified in relevant IS. Theanalyst shall be required to append a certificate to that effect to theanalysis report issued by him.Legal ObligationExtension of DeliveryPeriodApplicability ofBusiness RulesThe member will provide appropriate tax forms wherever required as perlaw and as customary and neither of the parties will unreasonably refuseto do so.As per the Exchange decision due to a force majeure or otherwise.The general provisions of Byelaws, rules and Business Rules of theExchange and decisions taken by Forward Markets Commission, Board ofDirectors and Executive Committee of the Exchange in respect of mattersspecified above will form and integral part of this contract. The Exchangeor FMC, as the case may be, may further prescribe additional measuresrelating to delivery procedures, warehousing, quality certification,margining, risk management from time to time. (The interpretation orclarification given by the Exchange on any terms of this contract shall befinal and binding on the members and others.)Note:

1. Kindly refer circular no. MCX/366/2005 dated October 27, 2005 and MCX/367/2005dated October 27, 2005 or any subsequent circulars, regarding Standard deductions andDelivery centers respectively, if applicable.2. Proprietary account of a member is treated as client account. Please refer circular no.MCX/T&S/052/2008 dated February 5, 2008.Auction Procedure on Buyer defaultIn case of Buyers default in funds pay-inApplicability of AuctionBroadcast of Auction ableQuantity through TWS.Submission of Offer/s byinterested Buyer/s.Declaration of Successful Bids& funds pay-in by auction (new)BuyersAllocation / Distribution ofaccepted auction quantity tooriginal seller/s & defaultingbuyer/sPay-out of funds to originalSellersDelivery pay-out to auction(new) buyersAuction PriceDefault by the Auction-buyerWhen the buyer/s fail to honour funds pay-in on Funds Pay-indate within the scheduled time fully or partly or wheninformed to the exchange about his inability to make pay-in, itwill be treated as buyer’s default and therefore, liable forapplicability of Auction procedure.Exchange will conduct auction and broadcast auction- ablequantity, through TWS, in the morning of E+3 day.(E=Expirydate of the contract) (excl. Saturdays and Bank Holidays)New Buyer/s willing to bid may send the bid/s only in theprescribed Format (refer Annexure 1).Time of submission of bid is till 12.00 noon on auction day.i.e.E+3The Exchange will inform the member/s whose bids areaccepted as successful bids, being the highest bids.The (new) Buyers will be required to make funds pay-in fortheir bid quantity accepted latest by 11:00 a.m. on the nextday (i.e. E+4).If total auctioned quantity is lower than auction-able quantity,accepted/auctioned quantity will be allocated to the originalseller/s on random basis. Un-auctioned quantity (i.e.remaining quantity that could not be auctioned) will be closedout with the remaining seller/ and against defaulting buyer/s.E+4 by 6:00 pm, to the tune of quantity auctioned providedthat the auction (new) buyer has fulfilled his funds pay-inobligation.E+4 by 7:00 pm, to the tune of the auction quantity acceptedprovided that such new buyer has fulfilled his funds pay-inobligation.Auction price will be the weighted average price of all the bidsaccepted for this contract.If the member participating in the Auction fails to fulfill hisfunds pay-in obligation in time, his position will be closed out@ 20% of Auction price plus 2.5% penalty, out of which2.00% will be credited to IPF , 0.50% to counter party and out

of 20% close out amount, 90% to counter party(original seller)& 10% to Exchange.Conditions1. Defaulting Buyer/s will not be allowed to participate in theAuction process of that contract.2. Defaulting buyer will not be entitled to any credits,whatsoever.3. The bid price of any or all bids, if in the opinion of theExchange is found unreasonable or unrealistic, the Exchange,without assigning any reasons thereto, shall have the absoluteright to reject such bid/s.4. Offers, once submitted, cannot be cancelled but can bemodified subject to increasing the quantity and/or increasingthe bid price.5. On acceptance of the Auction Buyer’s bid/s, 25% of the bidamount will be blocked from the deposit with the exchangeand the funds pay-in amount is required to be paid before11.00 a.m. on the next day of the auction day.Exchange’s DecisionThe decision of the Exchange will be final and binding to allthe Buyers as well as Sellers and the Auction participants.Further, the Exchange has the right to add, modify, delete anyor all provisions mentioned above in the interest of the marketand reserve the right to cancel the auction process at anytime.Annexure 1FORMAT FOR GIVING BID IN AUCTION(On the letterhead of the Member)Date:Delivery Dept.Multi Commodity Exchange of India Ltd.MumbaiSub: Auction bid for taking delivery of ___________(Mention the Name of the Commodity)Member ID: _____________We hereby submit our bid to take delivery of _________(Mention the name of the commodity).Our bid details are as below :Sr. No. BID QTY (in kg) BID RATE (Rs.per kg)Figures

WordsYours faithfully,For ________________________(Authorized Signature(s)Seal)Note :1. Bid once given can be revised (refer annexure 2) but, downward revision in bid quantityor bid rate will be rejected.2. Bid once given can’t be cancelled.3. Bid should not be hand written.4. This letter has to be signed by authorized signatory only.Annexure 2FORMAT FOR REVISING BID ALREADY GIVEN FOR AUCTION(On the letterhead of the Member)Date:Delivery Dept.Multi Commodity Exchange of India Ltd.MumbaiSub: Revision in Auction bid for taking delivery of ___________(Mention the Name of theCommodity)Member ID: _____________We hereby revise our bid to take delivery of _________(Mention the name of the commodity).Our revised bid details are as below :FiguresORIGINALBID QTY(in kg)REVISED BID QTY (inkg)ORIGINAL BIDRATE (Rs. perkg)REVISED BIDRATE(Rs. per kg)Words

Yours faithfully,For ________________________(Authorized Signature(s)Seal)Note :1. Downward revision in bid quantity or bid rate will be rejected.2. Bid once given can’t be cancelled.3. Bid should not be hand written.4. This letter has to be signed by authorized signatory only.