Warehousing Development and Regulatory Authority (WDRA) was set up by the Government of India on 26th October 2010 to ensure implementation of the provisions of the Warehousing (Development & Regulation) Act, 2007. The main objective of the Authority is to implement the Negotiable Warehouse Receipt (NWR) system in the country, which would enable farmers to store their produce for safe and scientific storage and preservation in warehouses near their farms and to seek pledge loan from banks against the NWRs issued against deposit of their stocks. The main functions of the Authority are to make provisions for the development and regulation of warehouses which inter alia includes negotiability of warehouse receipts, registration of warehouses, promotion of scientific warehousing of goods, improving fiduciary trust of depositors and banks, enhancing liquidity in rural areas and promoting efficient supply chain.
WDRA initially implemented a paper-based NWR system in the country. The applicant warehouses fulfilling the prescribed norms of WDRA are registered and are eligible to issue NWRs on the security stationery of NWR supplied under the regulatory framework of WDRA.
There were many risks involved in the paper-based warehouse receipts viz. risk of mutilation, fudging, overwriting, damage, loss, issuance of WR without receiving goods, issuance of duplicate WR without following the procedure, issuance of multiple WRs for the same stock, possible delivery of stocks without surrender of the warehouse receipt, fraudulent overstatement of the value of stocks in the warehouse receipt, etc. Even many non-registered warehouses were issuing paper-based receipts wherein they could deliberately mention it as a negotiable warehouse receipt which would lack regulatory backup.
Pursuant to Para 127 of Budget Announcement, 2014-15, a Transformation Plan of WDRA implementation was commenced in December 2014 to streamline WDRA’s activities and introduce an IT-based platform for registration and monitoring of warehouses and setting up Repositories for issuance of NWRs in electronic form (e-NWR). All activities envisaged under the plan viz. conducting a market survey, re-writing of rules/regulations, strengthening of warehouse inspection and supervision framework and use of IT in registration & monitoring of warehouses, setting up Repositories for the issue of NWRs in electronic form have been completed.
On 26.09.2017 the electronic Negotiable Warehouse Receipt (eNWR) and WDRA Portal were launched by the Hon’ble Minister of Consumer Affairs, Food& Public Distribution. Two repositories, M/s CDSL Commodity Repository Limited (CCRL) sponsored by M/s Central Depository Services Limited (CDSL) and M/s National E -Repository Limited (NERL) sponsored by M/s National Commodity &Derivatives Exchange Limited (NCDEX) were issued certificate of registration for setting up electronic repository systems for creation and management of e-NWRs.
Following are the characteristics of an eNWR:
The NWR in electronic form could be issued either as an electronic Negotiable Warehouse Receipt (e-NWR)which has negotiability and can be used for deposit and withdrawal of commodities as well as trade transactions such as transfer and Pledge or in the form of an electronic Non-Negotiable Warehouse Receipt (e-NNWR)which can be used only for deposit and withdrawal of commodities (generally issued for goods received in the warehouse with pending final assaying reports or if assaying is not desired by the applicant) without the facility of trade/transfer.
Following are the users of a Repository system associated with the eNWR life cycle:
Rule 27 of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017 provide that with effect from such date as may be specified by the Authority, no warehouseman shall issue any negotiable warehouse receipt in physical form, and shall register with one or more repositories registered with the Authority for issuing negotiable warehouse receipts in electronic form. WDRA has since specified the date as 01st August 2019.
In order to be authorised for transacting on repository platform with respect to the following processes, the first step required is to get on boarded with one of the repositories:
Banks/FIs/Pledgee as defined under the guidelines may be onboarded by Repositories as Full-fledged Repository Participant / Pledgee-RP or only Pledgee client to RP by entering into the agreement. The Core Banking system of Banks / FI may interface with Repositories for better functioning
Commodity Derivative Exchanges / Electronic National Agriculture Market (e-NAM) /Auction Platforms may be provided with the interface by entering into an agreement with the Repository to provide e-NWR services to the extent as prescribed by the Authority.
Part/ full withdrawal /delivery of e-NWR/e-NNWR
Transfer of eNWR may take place during both, off-market and on market transaction, as per details given below:
Detailed process guidelines for trade and transfer of eNWRs on eNAM platform have been issued by the Authority as per Annexure I. It is necessary that the particular warehouse is notified as a market sub-yard of the concerned APMC before it starts transacting eNWRs on the respective eNAM portal.
Assuming that pledgor and pledgee have decided for loan transaction and the depositor has got necessary sanction from the Bank / FI for extending Pledge loan.
Assuming the Bank / FI has taken necessary steps such as issuance of Notices as laid down by the Bank Rules/ Sanction Terms & Conditions of pledge loan,
A warehouseman using the services of repository for eNWR based transactions shall be required to adhere to the following obligations expected of him:
A depositor/ titleholder of the eNWR using the services of repository for eNWR based transactions shall be required to adhere to the following obligations expected of him:
A financial institution which can be a Scheduled Commercial Bank as listed under Schedule 2 (as amended) of the Reserve Bank of India Act, 1934, Sponsored Banks, Small Industries Banks, State Financial Corporations, Cooperative Banks/ Societies, Non-Banking Financial Companies and any other financial institution defined or notified under the Reserve Bank of India Act, 1934 or a Clearing Corporation registered with Securities and Exchange Board of India (SEBI). The financial institutions may be associated with repositories for the purpose of pledge financing and pledge removal/pledge invocation or for collecting margin as per SEBI norms.
The following shall be the obligation of the financial institution on-boarded with the repository (ies):
The mission of the WDRA is to ensure that the interests of the farmers are protected through the growth and development in the warehousing sector. The main objectives are to improve the fiduciary trust of depositors and banks, increase liquidity in rural areas, encourage scientific warehousing of goods, lower the cost of financing, promote shorter and efficient supply chains, enhance reward for grading and quality and ensure better price risk management.
The negotiable warehouse receipts issued by the WDRA will help the farmers to seek loans from banks against the NWRs to avoid distress sales of agricultural produce during the peak marketing season and to avoid the post-harvest storage loss.
The Authority has notified 123 agricultural commodities including cereals, pulses, oil seeds, spices, rubber, tobacco, coffee, etc for issuing negotiable warehouse receipts and also 26 horticultural commodities for cold storage.
1902 warehouses of 105.5 lakh MT capacity have been registered with WDRA since inception. Out of which 274 warehouses are of CWC, 194 of SWC, 1164 are Private Warehouses, 261 are PACS/FPO and 9 are Cold Storages. As of now, 745 warehouses having a storage capacity of 62 lakh MT have valid registration.
To discourage distress sale by farmers and to encourage them to store their produce against warehouse receipts the benefit of interest subvention was made available to small and marginal farmers having Kissan Credit Cards for a period of six months @ 7% on negotiable warehouse receipts.
The Authority has launched an electronic Negotiable Warehouse Receipt from 26th September 2018 and thereby migrating to IT-based eNWR ecosystem, by licensing two Repositories namely, M/s CCRL (sponsored by CDSL) and M/s NeRL (sponsored by NCDEX). All the registered warehouses are on boarded to Repository System for issuing eNWR against the deposits. The depositor can use eNWR to get loans against underlying commodities from banks and the lien will be marked by the repository.
Section 3 sub section (1) and (2) of the Warehousing (Development and Regulation) Act, 2007 provides that no person shall commence or carry on the business of warehousing issuing negotiable warehouse receipts unless he has obtained a registration certificate after fulfilling the prescribed norms in respect of the concerned warehouse or warehouses granted by the Authority under this Act.
The warehouse operators which fulfill the following criteria can apply for registration of their warehouse with WDRA:
Details of the registration fee for different capacity of warehouses are as under:
| Unit of registration | Fee (non-refundable) |
| Each warehouse with a capacity of 10,000 Ton or less | Rs. 20,000 |
| Each warehouse with a capacity of more than 10,000 Ton but less than or equal to 25,000 Ton | Rs. 25,000 |
| Each warehouse with a capacity of more than 25,000 Ton | Rs. 30,000 |
Where the applicant/ warehouseman is a Farmer Producer Organisation or a Co-operative, the fee shall be Rs. 5,000 per warehouse.
Networth requirement for different capacity of warehouses is as under:
| Net worth Requirement | |
|---|---|
| Storage capacity (in tons) | Net worth (Rupees in crores) |
| Less than 1,000 | 0.1 |
| 1,001 – 3000 | 0.25 |
| 3,001 – 5,000 | 0.50 |
| 5,001 – 7000 | 1.00 |
| 7,001 – 10,000 | 2 |
| 10,001 – 15000 | 5 |
| 15,001 – 25,000 | 10 |
| 25,001 – 75,000 | 20 |
| 75,001 – 1,50,000 | 30 |
| 1,50,001 – 5,00,000 | 50 |
| 5,00,001 and above | 100 |
Where the applicant/ warehouseman is a Farmer Producer Organisation or a Co-operative, the net worth should be positive.
Following financial concessions are provided to Cooperative Societies and FPOs to encourage them for registering their warehouses:
Following relaxations have been provided for registration of small capacity warehouses operated by PACS:
“Repository” means a company that has received a Certificate of Registration under the guidelines issued by WDRA.
“Authority” means the Warehousing Development and Regulatory Authority (WDRA) established under the WDR Act 2007.
“User” means a depositor, holder, Financial Institution, Exchange, Clearing House, Warehouseman, Repository Participant or any other person to whom the Repository provides core services.
NERL i.e. National E Repository Limited is an NCDEX group company that has received a Certificate of Registration under the guidelines issued by WDRA to act as a Repository.
As mentioned in the Guidelines on Repositories and Creation and Management of Electronic Negotiable Warehouse Receipts issued by WDRA, a Repository may appoint any of the following as its RP.
Following are the various categories of RPs that will be empanelled in NERL
| Sr. No | Category | Net worth between Rs. 3 crore & Rs. 10 crore |
Net worth < 3 crore |
|---|---|---|---|
| 1 | General RP | Allowed with a cap of 50 times their Net Worth | Not allowed |
| 2 | Limited purpose RP | Allowed with a cap of 50 times their Net Worth | Not allowed |
| 3 | Members of stock exchange | Allowed with a cap of 50 times their Net Worth |
|
Following documents are required to become an RP:
| Sr. No | Documents required |
|---|---|
| 1 | KYC details |
| 2 | Interest-Free Security deposit |
| 3 | Directors details viz. name, email id, contact details |
| 4 | Net worth certificate in prescribed format |
| 5 | Board Resolution |
| 6 | Photographs of Authorized Signatories |
| 7 | List of authorized signatories verified by bank |
| 8 | Self-certified PAN Copy |
| 9 | Self-certified PAN Copies of Directors |
| 10 | Self-certified copy Certificate of Incorporation |
| 11 | List of major clients |
| 11 | Letter from a bank certifying a/c no and date from which operational |
| 13 | T Returns & Annual reports for last 3 years |
| 14 | Proof of Residence - Promoters / Directors |
Net worth certificate format and computation method should be as per Annexure C-1 and Annexure
C- 1A as mentioned below:
| A | Capital | |
| B | Free Reserves | |
| C | Less Non-allowable assets viz., | |
| (a) Fixed Assets | ||
| (b) Pledged Securities | ||
| (c) Member’s card | ||
| (d) Non-allowable securities (unlisted securities) | ||
| (e) Bad deliveries | ||
| (f) Doubtful Debts and Advances* | ||
| (g) Prepaid expenses, losses | ||
| (h) Intangible Assets | ||
| (i) 30% of Marketable securities | ||
| D | Total Net Worth(A+B-C) |
*Explanation:
Includes debts/advances overdue for more than three months or given to associates
For (Name of Accounting Firm)
Name of Partner/Proprietor Chartered Accountant
CA Stamp & Membership Number
A Repository interface with the clients through its agents called Repository Participants (RPs). If a client wants to avail the services offered by the Repository, the investor has to open an account with an RP. A list of RP’s empaneled by NERL are available on our website. Link: https://nerlindia.com
Some of the important factors for the selection of an RP can be:
You can approach any RP of your choice, fill up an account opening form and submit the required KYC documents. You can also refer to the Account opening manual available on our website www.nerlindia.com.
Yes, you can open more than one Repository accounts with the same DP.
Clients can open accounts with any Repository of their choice
Account opened by the client with an RP to avail services offered by a Repository can also be called as Beneficiary ID.
Ownership transfer can be done inside as well as outside RP’s.
WSP’s will be registered by WDRA. Kindly refer to the WDRA website for further details.
Electronic credit is reflected in the users’ RP account on a real-time basis after completion of all the requisite formalities/norms laid down by the Repository/WDRA.
eWR means Electronic Non-Negotiable Warehouse Receipt eNWR means Electronic Negotiable Warehouse Receipt
The term warehouse receipt has been defined by WDRA in WDR Act 2007. eWR is non-negotiable in nature i.e. ownership of the commodity represented by warehouse receipt cannot be transferred. eNWR is negotiable in nature i.e. eNWRs can be traded, sold, swapped and used as collateral to support borrowing.
There is no limit for the quantity to be deposited in a single eWR & eNWR
Only the warehouse approved & registered by WDRA are onboarded in Repository.
A list of Notified commodities is available on the WDRA website.
Can I deposit a commodity for which I don't want assaying to be done?
To convert eWR to eNWR and vice versa, you need to intimate the warehouse at the time of deposit. Once the deposit transaction is completed by the warehouse, conversion of eWR to eNWR and vice versa can be executed only by withdrawing the commodity from the warehouse and redepositing the same by following the complete deposit process laid down by the Repository/WDRA.
Any bank or Financial Institution that provides a loan against Electronic Warehouse Receipts can empanel with NERL as a Pledgee
The list of NERL empanelled Pledgee is available on NERL website www.nerlindia.com.
No, an auction is one of the means through which the Financial Institution can liquidate the commodity of the loan defaulter.
“Repository” means a company that has received a Certificate of Registration under the guidelines issued by WDRA.
“Authority” means the Warehousing Development and Regulatory Authority (WDRA) established under the WDR Act 2007.
“User” means a depositor, holder, Financial Institution, Exchange, Clearing House, Warehouseman, Repository Participant or any other person to whom the Repository provides core services.
NERL i.e. National E Repository Limited is an NCDEX group company that has received a Certificate of Registration under the guidelines issued by WDRA to act as a Repository.
As mentioned in the Guidelines on Repositories and Creation and Management of Electronic Negotiable Warehouse Receipts issued by WDRA, a Repository may appoint any of the following as its RP.
Following are the various categories of RPs that will be empanelled in NERL
| Sr. No | Category | Net worth between Rs. 3 crore & Rs. 10 crore |
Net worth < 3 crore |
|---|---|---|---|
| 1 | General RP | Allowed with a cap of 50 times their Net Worth | Not allowed |
| 2 | Limited purpose RP | Allowed with a cap of 50 times their Net Worth | Not allowed |
| 3 | Members of stock exchange | Allowed with a cap of 50 times their Net Worth |
|
Following documents are required to become an RP:
| Sr. No | Documents required |
|---|---|
| 1 | KYC details |
| 2 | Interest-Free Security deposit |
| 3 | Directors details viz. name, email id, contact details |
| 4 | Net worth certificate in prescribed format |
| 5 | Board Resolution |
| 6 | Photographs of Authorized Signatories |
| 7 | List of authorized signatories verified by bank |
| 8 | Self-certified PAN Copy |
| 9 | Self-certified PAN Copies of Directors |
| 10 | Self-certified copy Certificate of Incorporation |
| 11 | List of major clients |
| 11 | Letter from a bank certifying a/c no and date from which operational |
| 13 | T Returns & Annual reports for last 3 years |
| 14 | Proof of Residence - Promoters / Directors |
Net worth certificate format and computation method should be as per Annexure C-1 and Annexure
C- 1A as mentioned below:
| A | Capital | |
| B | Free Reserves | |
| C | Less Non-allowable assets viz., | |
| (a) Fixed Assets | ||
| (b) Pledged Securities | ||
| (c) Member’s card | ||
| (d) Non-allowable securities (unlisted securities) | ||
| (e) Bad deliveries | ||
| (f) Doubtful Debts and Advances* | ||
| (g) Prepaid expenses, losses | ||
| (h) Intangible Assets | ||
| (i) 30% of Marketable securities | ||
| D | Total Net Worth(A+B-C) |
*Explanation:
Includes debts/advances overdue for more than three months or given to associates
For (Name of Accounting Firm)
Name of Partner/Proprietor Chartered Accountant
CA Stamp & Membership Number
A Repository interface with the clients through its agents called Repository Participants (RPs). If a client wants to avail the services offered by the Repository, the investor has to open an account with an RP. A list of RP’s empaneled by NERL are available on our website. Link: https://nerlindia.com
Some of the important factors for the selection of an RP can be:
You can approach any RP of your choice, fill up an account opening form and submit the required KYC documents. You can also refer to the Account opening manual available on our website www.nerlindia.com.
Yes, you can open more than one Repository accounts with the same DP.
Clients can open accounts with any Repository of their choice
Account opened by the client with an RP to avail services offered by a Repository can also be called as Beneficiary ID.
Ownership transfer can be done inside as well as outside RP’s.
WSP’s will be registered by WDRA. Kindly refer to the WDRA website for further details.
Electronic credit is reflected in the users’ RP account on a real-time basis after completion of all the requisite formalities/norms laid down by the Repository/WDRA.
eWR means Electronic Non-Negotiable Warehouse Receipt eNWR means Electronic Negotiable Warehouse Receipt
The term warehouse receipt has been defined by WDRA in WDR Act 2007. eWR is non-negotiable in nature i.e. ownership of the commodity represented by warehouse receipt cannot be transferred. eNWR is negotiable in nature i.e. eNWRs can be traded, sold, swapped and used as collateral to support borrowing.
There is no limit for the quantity to be deposited in a single eWR & eNWR
Only the warehouse approved & registered by WDRA are onboarded in Repository.
A list of Notified commodities is available on the WDRA website.
Can I deposit a commodity for which I don't want assaying to be done?
To convert eWR to eNWR and vice versa, you need to intimate the warehouse at the time of deposit. Once the deposit transaction is completed by the warehouse, conversion of eWR to eNWR and vice versa can be executed only by withdrawing the commodity from the warehouse and redepositing the same by following the complete deposit process laid down by the Repository/WDRA.
Any bank or Financial Institution that provides a loan against Electronic Warehouse Receipts can empanel with NERL as a Pledgee
The list of NERL empanelled Pledgee is available on NERL website www.nerlindia.com.
No, an auction is one of the means through which the Financial Institution can liquidate the commodity of the loan defaulter.
Any person commencing or carrying on the warehousing business and intending to issue Negotiable Warehouse Receipts (NWRs) has to get the warehouse registered with the Warehousing Development & Regulatory Authority (WDRA). The Warehousing (Development & Regulation) Act, 2007 and the Warehousing (Development & Regulation) Registration of Warehouse Rules, 2017 are available under the Section “Act and Rules” of the WDRA Portal. Amendments to the Rules and Regulations and the relevant circulars on insurance and guidelines on empanelment of inspection agencies and inspection of warehouses are also available on the Authority’s website. Since a system of online registration of warehouses has been put in place from November 1, 2017, all applications for warehouse registration have to be submitted online. Detailed instructions for online registration of warehouses are available on the WDRA portal.
Procedure
Application fee (non-refundable) for registration of warehouse or renewal thereof is as follows and payable by way of online payment while submitting the warehouse registration application:
| Unit of registration | Fee (non-refundable) |
|---|---|
| Each warehouse with a capacity of 10,000 Ton or less | Rs. 20,000 |
| Each warehouse with a capacity of more than 10,000 Ton but less than or equal to 25,000 Ton | Rs. 25,000 |
| Each warehouse with a capacity of more than 25,000 Ton | Rs. 30,000 |
| S.No. | Document to be submitted |
|---|---|
| i | Photograph of Authorized/Associate Authorized Representative |
| ii | Applicant's proof of identity as required at Fifth Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017 |
| iii | dentity and address proof of Authorized/Associate Authorized Representative (in case of non-individual entities) |
| iv | Standard Operating Procedures |
| v | Document in support of net-worth as required under Rule 18 (5) of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017 and as amended on 20.03.2018. |
| vi | Copy of Insurance policies as prescribed under Rule 17 of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017. Details are available on the WDRA portal under Documents-Circular section vide Circular dated 27.4.2017 |
| vii | Layout Plan of the warehouse(s) |
| viii | Basic Data Sheet in case of cold storage |
| ix | Proof about technical standards under which cold storage has been constructed |
| x | List of equipment for the preservation of goods available at the warehouse |
| xi | List of equipment for assaying goods available at the warehouse |
| xii | List of equipment for weighing goods available at the warehouse (details of an internal or external lorry weighbridge is also required to be provided) |
| xiii | Fire Safety arrangements at the warehouse |
| xiv | If the warehouse is owned: Copy of the Records of Rights or registered title deed in respect the land on which warehouse concerned is located as per the Sixth Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017 |
| xv | Document to demonstrate effective control over the Warehouse, any of the following ( as per the First Schedule of the Warehousing (Development and Regulation) Registration of Warehouses Rules, 2017): (i) lease deed or rent agreement, (ii) sub-lease agreement and lease deed indicating that subleasing is permitted, (iii) revenue sharing agreement, (iv) NOC from Municipal Corporation/ Panchayat/ local body ( as the case may be), (v) lease agreement from concerned APMC, (vi) copy of allotment letter from State Government For each warehouse listed in the application separately. |
a)Compliance with registration requirements.- A warehouseman shall at all times:
b) Know your depositor requirements.-
The warehouseman shall maintain the know your depositor (KYD) details with respect to various depositors as specified under the registration rules.
c) General obligations of a warehouseman.-
In the conduct of its warehousing business, a warehouseman shall
d) Information contained in warehouse receipts.-
A warehouseman must ensure that all warehouse receipts issued by it, negotiable or otherwise, comply with the requirements of section 11 of the Act and the rules, regulations, and notifications made thereunder.
e) Mandatory registration with e-negotiable warehouse receipt repository.-
With effect from June 1, 2019, no warehouseman shall issue any negotiable warehouse receipt in physical form and shall register with one or more repositories registered with the Authority for issuing negotiable warehouse receipts in electronic form.
Disclosure of information.-
i)A warehouseman shall make written disclosure to the Authority of any of the following events, namely:-
ii)The Authority may, by order, require the warehouseman to make any additional disclosures and stipulate the form and manner in which disclosure is required to be made.
g)Submission of information regarding warehouse receipts.-
iii)A warehouseman shall submit monthly reports to the Authority in such form and manner, including in electronic form, as may be specified by the Authority on this behalf.
iv)The monthly reports to be submitted under this rule shall contain the following details of warehouse receipts in respect of the preceding month, namely:–
v)The Authority may require additional information regarding the (electronic) negotiable warehouse receipts issued by the warehouseman, or the goods stored by the warehouseman in registered warehouses.
Revised procedure for the requirement of Security Deposit for registration of warehouses with the Authority:
The total security deposit of a sum of A and B for warehouseman having total warehouse capacity of all warehouses registered with WDRA up to 2000 MT, will be limited to total security deposit as detailed in column C, as given in Table I below:-
| Total registered Warehouse Capacity (in MT) for warehousemen | Fixed Security Deposit | Dynamic Security Deposit | Total Security Deposit Limited to the amount. |
|---|---|---|---|
| A | B | C | |
| Upto 100 MT | Rs. 50,000/- per warehouse | NIL | Total Limited to Rs. 50,000/- |
| 101 – 500 MT | Rs. 50,000/- per warehouse | 3% of T | Total Limited to Rs.2.50 lakh |
| Upto 100 MT | Rs. 50,000/- per warehouse | NIL | Total Limited to Rs.5.00 lakh |
| Upto 100 MT | Rs. 50,000/- per warehouse | NIL | Total Limited to Rs.7.50 lakh |
| Upto 100 MT | Rs. 50,000/- per warehouse | NIL | Total Limited to Rs.10.0 lakh |
| Slab | Dynamic Security Deposit | Fixed Security Deposit | |
|---|---|---|---|
| X | Y | Z | |
| T is less than or equal to Rs.25 crore | 0 | 3% of T | Rs. 1 lakh per warehouse |
| T is above Rs.25 crore and up to 250 crore | Rs. 75 lakh | 1.5% of the excess of T over Rs. 25 crore | Rs. 1 lakh per warehouse |
| T is above Rs.250 crore and up to 2,500 crore | RRs. 4.125 crore | 1% of the excess of T over Rs. 250 crore | Rs. 1 lakh per warehouse |
| T is above Rs.2,500 crore | Rs. 26.625 crore | 0.5% of the excess of T over Rs. 2500 crore | Rs. 1 lakh per warehouse |
Director (Administration & Finance)
Warehousing Development and Regulatory Authority (WDRA) NCUI Building (4th Floor),
3, Siri Institutional Area, August Kranti Marg,
Hauz Khas, New Delhi – 110016 (With due stamp duty as applicable)
............................................ (Date of expiry of guarantee)
Dated the............................ day of 20
Name of Authorized Signatory/ Manager For (Name of the Bank)
Branch
Seal of the bank
This indemnity is executed by deed on the day of 201 by _(an entity created under the Act of the Parliament or of the State Legislative) hereinafter called “ENTITY” in favour of the Warehousing Development and Regulatory Authority (WDRA) hereinafter called “AUTHORITY”
| Slab | Dynamic Security Deposit | Fixed Security Deposit | |
|---|---|---|---|
| A | B | C | |
| T is less than or equal to Rs.25 crore | 0 | 3% of T | Rs. 1 lakh per warehouse |
| T is above Rs.25 crore and up to 250 crore | Rs. 75 lakh | 1.5% of the excess of T over Rs. 25 crore | Rs. 1 lakh per warehouse |
| T is above Rs.250 crore and up to 2,500 crore | Rs. 4.125 crore | 1% of the excess of T over Rs. 250 crore | Rs. 1 lakh per warehouse |
| T is above Rs.2,500 crore | Rs. 26.625 crore | 0.5% of the excess of T over Rs. 2500 crore | Rs. 1 lakh per warehouse |
Note: - Here ‘T’ is referred in the above Table as the highest value of total outstanding negotiable warehouse receipts in over the preceding month for all the warehouses registered by the warehouseman.
NOW therefore M/s …………………………..(name of the entity) established under ……………………………… Act, agrees and undertakes at all times to save, defend, and indemnify and keep indemnified the Authority from and against all actions, suits, proceedings, accounts, claims and demands whatsoever for an amount of Rs………(Rupees only) (as detailed at Annexure) to the extent of limits to be worked out as per Para ‘c’ above and as per the conditions of this indemnity bond noted below: -
EXECUTOR NAME:
DESIGNATION:
ORGANISATION:
(With Seal)
In the presence of witnesses: -
1)
2)
| Sl. No. | Name and Address of the Warehouse | Capacity in MT |
|---|---|---|
Application fees for registration and renewal with the Authority
| Unit of registration | Fee |
|---|---|
| Each warehouse with a capacity of up to 500 Ton | Rs. 5,000/- |
| Each warehouse with a capacity of more than 500 Ton but less than or equal to 1,000 Ton | Rs. 7,500/- |
| Each warehouse with a capacity of more than 1,000 Ton but less than or equal to 2,500 Ton | Rs. 10,000/- |
| Each warehouse with a capacity of more than 2,500 Ton but less than or equal to 5,000 Ton | Rs. 15,000/- |
| Each warehouse with a capacity of more than 5,000 Ton but less than or equal to 10,000 Ton | Rs. 20,000/- |
| Each warehouse with a capacity of more than 10,000 Ton but less than or equal to 25,000 Ton | Rs. 25,000/- |
| Each warehouse with a capacity of more than 25,000 Ton | Rs. 30,000/- |
Where the applicant or warehouseman is a Farmer Producer Organisation or a Primary Agricultural Cooperative Credit Society, the fee shall be Rs. 5,000 per warehouse.”
Minimum net worth requirements for registration with the Authority
| Upto 500 | 0.04 |
|---|---|
| 501 – 1,000 | 0.08 |
| 1,001 – 1,500 | 0.12 |
| 1,501 – 2,000 | 0.16 |
| 2,001 – 2,500 | 0.20 |
| 2,501 – 5,000 | 0.40 |
| 5,001 – 7,000 | 1.00 |
| 7,001 – 10,000 | 2.00 |
| 10,001 – 15,000 | 5.00 |
| 15,000 – 25,000 | 10.00 |
| 25,001 – 75,000 | 20 |
| 75,001 – 1,50,000 | 30 |
| 1,50,001 – 5,00,000 | 50 |
| 5,00,001 and above | 100 |
Where the applicant or warehouseman is a Farmer Producer Organisation or a Primary Agricultural Cooperative Credit Society, the net worth shall be positive.”
National Commodity Clearing Limited (NCCL) is a wholly-owned subsidiary of the National Commodity & Derivatives Exchange Ltd. (NCDEX) which is India’s leading agri-commodity exchange. NCCL is responsible for clearing and settlement services of all trades executed on the exchange and is committed to providing a robust and transparent risk management platform for the collective benefit of the agri-ecosystem.
List of empaneled WSPs is available on the website of NCCL and can be found at the following link https://nccl.co.in/warehousing/wsp/exchange-empanelled-wsps
The list and details of the contact person of warehouses approved by NCCL for delivery is available on the website of NCCL and can be found in following link https://nccl.co.in/warehousing/warehouse-data under the description ‘Approved warehouses for delivery as on
Warehouse and Assaying charges are available on the NCCL website at the following link https://nccl.co.in/warehousing/warehouse-data under the description ‘Indicative storage and assaying charges’.
Yes, you should open a repository account with any of the repository participants of National E- repository Limited (NeRL)before physically depositing goods in warehouses approved with NCCL. “Repository Account Opening Manual” is available on NeRL website at the link http://nerlindia.com/wp- content/uploads/2020/01/NERL-ACCOUNT-OPENING-MANUAL-v1.3.pdf and may be referred for general guidelines and other requirements for opening an account.
Yes, it is mandatory to book space before depositing goods in the Warehouses approved by NCCL. For this, you need to use the Warehouse Space Reservation system (WSR) and initiate a booking request through your e-Repository login credentials into NERL Warehouse Space Reservation System (URL: https://wsr.erepository.in). The detailed process with respect to WSR is available in “WSR User Manual” on NeRL Website.
What are the rules related to the Warehouse Space Reservation system?
Yes, it is mandatory to submit information as required in the Know Your Depositor (KYD) form. KYD forms are available on the website of respective warehouse service providers. Any person or entity desirous of depositing goods in the approved warehouse of NCCL must submit information in the prescribed formats. You may refer to the website of the respective WSP for the formats. The gist of the required KYD forms and their respective frequency of submission is detailed below:
| Format | Frequency | To be filled by |
|---|---|---|
| Annexure 1 | One time for each WSP | Any resident individual (including a sole proprietor) who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary) |
| Annexure 2A | One time for each WSP | Any non-individual (i.e., Company or LLP) who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary) |
| Annexure 2B | One time for each WSP | Any non-individual (i.e., Partnership firm) who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary) |
| Annexure 3 | At the time of each deposit covered by a single Warehouse Space Reservation Request(WSR) | Any individual/non-individual who deposits goods (irrespective of whether he deposits the goods on his own account or on behalf of another beneficiary) |
Yes, you need to contact the warehouse before sending your trucks. It is advised to take a schedule of deposit from the warehouse to avoid delays in the unloading of your trucks at the warehouse.
Yes. The WSP will acknowledge receipt of physical goods in its warehouse. Corresponding electronic credit after applicable deductions will also be affected by the WSP in your repository account in the due course of time.
Yes, you are permitted to carry out a physical inspection of your goods in NCCL approved Warehouses if you are having commodity balances in your electronic repository account. You will have to submit a request to NCCL for permitting physical inspection. The process to be followed for the purpose of requesting physical inspection is available on the NCCL website is given in the link below. https://nccl.co.in/warehousing/wsp/process-for-physical-inspection-of-goods-in-approved- warehouses-by-holders
Yes. You will have to make a request to NCCL for appointing an assayer for allowing sampling at the time of lifting of goods from the Warehouse and testing of these samples by the NCCL appointed assayer for the purpose of verification of the quality of commodity which is received by you against a buy obligation on the Exchange platform. It is important to note that such requests should be made before the EDD of the goods stored in NCCL approved Warehouses and reflected in your repository account. Further, such a request should be made on the submission of all documents to the WSP. The framework for sampling at the time of taking physical delivery is available on our website at https://nccl.co.in/warehousing/wsp/frame-work-for-sampling-at-the-time-of-taking-physical-delivery
Your presence during Remat Testing is not mandatory. You may appoint and authorize your representative for witnessing the procedures. Alternately, as the assayer appointed by the Clearing Corporation is an Independent Assayer, you may also choose to inform the Remat Assayer to go ahead with the testing in your absence.
A report indicating the average value of quality parameters of selective commodities stored in NCCL approved warehouses is updated on the NCCL website on a fortnightly basis. The report named “Average value of quality parameters of selective commodities” is available at the following link https://nccl.co.in/warehousing/warehouse-data
A report indicating details of space booking requests received through the Warehouse Space Reservation (WSR) system is published on the NCCL website on a daily basis. The report named “Warehouse Space Reservation (WSR) Details” is available at the following link https://nccl.co.in/warehousing/warehouse- data
Such information is contained in the report called “Withdrawal Status” updated by NCCL on a quarterly basis available at the following link https://nccl.co.in/warehousing/warehouse-data
National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally managed online multi commodity exchange. The shareholders of NCDEX comprises of large national level institutions, large public sector bank, and companies.
Farmers Producer Organisation means any legal entity formed by farmers and registered as a producer Organisation under the below Acts:
Futures are financial contracts requiring the buyer to purchase an asset or the seller to sell an asset, such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. It is also a temporary sell or buy position taken by the seller or the buyer before an actual sell or buy transaction takes place.
Long position: When a buy position is created in any contract it is termed as a long position, i.e. Buys or Purchases contract on the Futures exchange.
Short position: When a sell position is created in any contract it is termed as a short position, i.e. Sells contract on the Futures exchange.
Margin in the futures market refers to an initial good faith deposit – essentially, a down payment on the full contract value. The exchanges set the minimum amount of money a Buyer or a Seller must deposit with an Exchange account to trade in futures contracts.
For example: Chana near-month futures price is Rs. 4000/quintal. The minimum trading lot size of Chana at NCDEX is 10 MT, so the value of one lot (10 MT) is Rs. 4,00,000. The minimum initial margin to trade in NCDEX Chana futures is 4%. Accordingly, if FPO wishes to sell at Rs. 4000/quintal they have to deposit Rs. 16,000(4,00,000 * 4%) before initiating the sell trade.
The outstanding (already created) positions in the Futures contract has to be marked to market daily based on the Daily Settlement Price (DSP) as determined by the Exchange at the end of each trading day. There are two counterparties on either side of a futures contract - a buyer and a seller. If at the end of the day, the futures contract in which the position is created goes down in value, the buyer account will be debited and the seller account credited to reflect the change in the value of the position. Conversely, an increase in value results in a credit to the buyer and debit to the seller.
FPO has to deposit the initial margin before initiating a trade (position).
FOne can refer to www.ncdex.com -> Products -> Agri products -> select desired commodity -> links -> 1) contract specs
Yes, in a few commodities there is quality premium and discount depending on the nature of the parameter. One can check the same on the NCDEX website. www.ncdex.com -> Products -> Agri Products -> Select the commodity -> Links -> Contract Specs
Agricultural commodities are perishable in nature i.e. after a certain time period the quality starts going down – deteriorate. This leads to a time frame or validity, after which the commodity is not usable in its current form.
Yes, NCDEX has defined the commodity-wise validity structure for all commodities. It varies between 4-9 months from commodity to commodity.
Yes, NCDEX has defined the commodity-wise validity structure for all commodities. It varies between 4-9 months from commodity to commodity.
An indicative list of documents is provided below:
Every depositor has to book the desired warehouse space through the warehouse space reservation system. The booking window in WSR operates between 10 am to 4:30 pm. A user guide explaining more details of this process is given on the NERL website www.nerlindia.com -> Comtrack -> Downloads -> Warehouse space booking request https://www.nerlindia.com/comtrack/downloads/WSR%20Client%20User%20Guide%20Mobile%2 0App%20new.pdf
An excel sheet is attached with this note detailing the commodity-wise quality of bags accepted for deposits in NCDEX.
Warehouse charges levied by Exchange differ from commodity to commodity. Commodity wise warehouse charges is given on NCDEX website www.ncdex.com - > Clearing -> Others -> Indicative warehouse charges To support participation, NCDEX endeavours to reduce the warehouse rent for FPOs
FPO will have to take back the commodity lot from the relevant warehouse after paying the applicable warehouse charges.
The commodity holding balance can be checked in the Repository a/c through their Repository Participant/Member
Exchange levies maximum of 0.006% as Transaction charges, 0.004% as Risk management fees, and 0.15% as delivery charges. GST is charged on all the above-mentioned charges @18%.
To take physical delivery from the warehouse, FPO will have to submit a withdrawal request to its Repository participant (where the Repository a/c is opened). Repository participant will pass on that request to NERL (National E-Repository Ltd.) and the WSP (Warehouse Service Provider) for verification. Post verification, the FPO can go to the relevant warehouse with an appropriate vehicle and withdraw the commodity after confirmation from the warehouse.
FPO has to generate the invoice and with the help of clearing member (where the trading a/c is opened) upload it on the National Clearing Corporation Ltd (NCCL) portal. The uploaded invoice has to be approved by the buyer within the stipulated time frame. Post-approval of invoice by the buyer, FPO will dispatch the invoice to its clearing member, who will then dispatch the invoice to the buyer's clearing member.
FPO needs to open Trading and Repository a/c with Exchange and Repository Participants respectively. The list of documents needed to open the a/c are:
‘Early pay-in’ (EPI) is a facility provided to market participants permitting them to deposit certified goods in the NCCL approved warehouse against relevant futures contracts sold and tender goods towards their settlement obligation before the due date to avail benefits of early pay-in.
Short positions against which early pay-in has been made by the FPO client shall be exempt from imposition of all types of margins except concentration margin.
All the following types of margins shall be exempted against early pay-in of commodities including:
The margins exemption shall be available on the quantity tendered in early pay-in subject to the short open position in the contract against which such early pay-in is marked. So the maximum quantity which shall be considered for calculating margin exemption will be lower of EPI quantity or short open position in the contract against which EPI has been marked. Example: Client has a short open position of 100 MT and against this position marks EPI of 150 MT, the margin exemption shall be available only on 100 MT position. Similarly, if a member gives an EPI of 50 MT against its client’s short open position of 100 MT, the margins exemption shall be available only on 50 MT position.
Yes. Members are required to inform NCCL, the details of clients under the FPO category to claim the benefit of ‘Early pay-in’ before marking an EPI.
The members for their FPO clients can make ‘Early pay-in’ of a commodity at any time for a short position in a contract after the start of trading in such contract on the NCCL platform.
Members are required to submit early pay-in (EPI) requests using the Web NCFE system of the Clearing Corporation. While marking EPI members are required to select contract expiry in which the client is holding the short positions, after the start of trading in the respective contract. Example: In case the client intends to make an Early Payin against a short position in December 2018 Contract (Expiry date – 20th December 2018) say on 5th of September 2018, the member while marking EPI needs to select the Expiry date i.e. 20th December 2018. If the client wants to tender delivery during the tender period of December 2018 Contract member shall mark the delivery intention accordingly. The EPI marked on the 5th of September 2018 shall be considered towards commodity pay-in.
The daily mark to market gains/losses on FPO positions where early pay-in is marked shall be accumulated by NCCL for a deferred settlement till the completion of delivery settlement for such FPO positions. The Clearing Corporation shall compute the amount to be debited/credited based on daily settlement price/trade price from the date when EPI is marked in the system for such short positions. Accordingly, the MTM losses shall be funded by NCCL from its own sources and MTM gains shall be retained by the NCCL.
NCCL shall continue to compute obligations at the member level as per the existing process. The daily obligation of the Member will include the MTM obligation of the FPO client for the short open position against which early pay-in is marked. The clearing member would be required to settle the entire obligation amount.
However, on daily basis, NCCL shall transfer an amount equivalent to the MTM pay-in arising out of FPO clients’ position to respective clearing members’ settlement account. Conversely, in the case of MTM gains, NCCL shall debit the members’ settlement account with an amount equivalent to the MTM pay-out (gains) of the FPO client.
Example:
| Day 1 | Day 2 | Day 3 | Day 4 | |
|---|---|---|---|---|
| Client 1 | 30,000 | -10,000 | 20,000 | -10,000 |
| Client 2 | 40,000 | -20,000 | 10,000 | -20,000 |
| Client 3 (FPO Client EPI position ) | 30,000 | -50,000 | -60,000 | -30,000 |
| Client 4 | 10,000 | -10,000 | 10,000 | -20,000 |
| MTM Obligation of Member | ||||
| Pay-in | 20,000 | 80,000 | ||
| Payout | 50000 | 10000 | ||
| Debit/Credit in Members Settlement account with respect to FPO Clien | ||||
| Debit | 50000 | |||
| Credit | 30000 | 60000 | 30000 |
Daily mark-to-market profit/ loss for the FPO client for the short open position against which early pay-in is marked shall be accumulated by the Clearing Corporation for a deferred settlement till the completion of delivery settlement. Accordingly, on daily basis NCCL shall debit the Members Settlement account in case of MTM gains of FPO client and credit the Members Settlement account in case of MTM loss to the FPO client on positions against which EPI is marked. NCCL shall continue to compute obligations at the member level as per the existing process. The settlement obligation of the Member will include the Final Settlement obligation of the FPO client for the short open position against which early pay-in is marked. Upon final delivery, the net amount funded by NCCL towards MTM loss shall be debited from the Members account or the MTM gains retained by NCCL shall be credited in the members’ account.
No. The members have to mark delivery intentions separately as per the schedule provided in the Settlement calendar issued by the Clearing Corporation. Early pay-in would not in any manner be automatically construed as delivery intention.
No. Daily settlement on account of losses arising on account of FPO shall be made good from NCCL’s own resources. NCCL shall transfer an amount equivalent to the MTM pay-in arising out of FPO clients’ position to respective clearing members’ settlement account. The member shall post such credit to the account of the FPO client and accordingly, there is no need for the FPO client to bring in funds towards MTM Pay in obligation.
Yes. The funding from NCCL for Mark-to-market settlement for the FPO client shall be capped at Rs.25 lakhs for a single FPO and Rs 500 lakhs across all FPOs, until further review. Mark to Market settlement in excess of the defined exemption limits shall be collected from the Clearing Member, who in turn would be required to collect the same from the FPO client.
Yes. On daily basis members account will be debited or credited based on the MTM for FPO client for the specific transaction against which early pay-in has been made. The member shall post such credit or debit to the account of the FPO client. The MTM obligation funded by NCCL can be considered towards compliance of the collection of MTM for margin reporting.
Members applying for exemption shall ensure that the short open position of such FPOs are not squared off after claiming such exemption. In the event of square-off, the cumulative net Mark to Market settlement from the time the EPI has been marked till the date of square-off would be computed. In case of cumulative losses, the MTM funded by NCCL shall be recovered from the member and in case of cumulative gains, the same shall be paid to the member.
In case the open position is squared off after marking an early pay-in, such EPI lots will be returned to the member after the Expiry of the contract.
No. It is mandatory only for those members who are trading on account of their clients, for others i.e. members indulge only in PRO trade can take such policy as per their requirement. Please refer Circular no. NCDEX/MEMBERSHIP-009/2008/264 dated November 21, 2008 for further details.
No. Separate member client agreement is to be executed for each of the commodity Exchange for which member is offering broking services to the client.
Yes. Please refer circular no. NCDEX/Legal-005/2004/091 dated July 22, 2004 on Issue of Contract Notes under Digital Signature. For maintenance of copies (soft or hard copies) of the digital contract notes so issued, may be confirmed from Inspection Section.
As per the guidelines issued by the Exchange, prior approval of the Exchange is required to be taken by the member for using the logo. Please refer to circular no. NCDEX/LEGAL-003/2005/046 dated February 22, 2005 for further details. Please also refer circular no. NCDEX/LEGAL-007/2004/158 dated November 5, 2004 on Use of NCDEXs Logo.
No, members may not insist upon copies of income tax return. Please refer Circular no. NCDEX/COMPLIANCE-001/2009/045 dated February 13, 2009 for further details.
Neither our Rules/Bye Laws/Regulations nor Forward Contracts (Regulation) Act prohibits members from undertaking any other business activities. Please refer to circular no. NCDEX/COMPLIANCE-003/2008/285 dated December 23, 2008 restricting portfolio management and advisory services by the member. However, there are restrictions on the members, who are registered with Stock Exchanges, to deal in other than securities.
The Exchange has so far not stipulated the appointment of Compliance Officer as mandatory and the member need not communicate the same to the Exchange.
There is no directive or a circular by the Exchange on any limit on the Commission/Brokerage that can be charged by the member. There is no minimum brokerage prescribed by the Exchange till date
Please refer circular no. NCDEX/COMPLIANCE-002/2006/238 dated September 19, 2006 on Display of details at members office.
Guidelines for issue of advertisement by the members are given in circular no. NCDEX/LEGAL-003/2005/046 dated February 22, 2005. Please refer to the same.
Members should not undertake any advisory services in the nature of portfolio advisory services, portfolio management services and similar such other advisory services resulting in fund based portfolio management services to clients for investment in commodities future contracts. Please refer circular no. NCDEX/COMPLIANCE-003/2008/285 dated December 23, 2008 for further details.
In case of inoperative client code/accounts any new requests for orders to trade should be accepted only on receipt of specific written request from the client for permission to trade along with completion of all required formalities of KYC, if necessary. Please refer circular no. NCDEX/MEMBERSHIP-001/2008/076 dated April 4, 2008 for further details.
Please refer circular no. NCDEX/LEGAL-003/2004/045 dated April 21, 2004 for Revised Contract Note Format
No.As per the provisions of our Bye Laws 6.7.1 and Regulation 4.1, read along with Bye law 7.2 regarding prohibition on trading members to trade through another trading member unless approved by the Exchange. Even member allowing other member to trade through him as a client would face similar penal action. Please refer circular no. NCDEX/Compliance-001/2005/103 dated May 4, 2005 for the penal provisions.
No Prior approval of the Exchange is required only in case the member is not following the guidelines issued by the Exchange in this regard or the member wish to use the logo of the Exchange. Please refer to circular no. NCDEX/LEGAL-003/2005/046 dated February 22, 2005 for further details.
There are many CTCL vendors and the number of CTCL Terminals provided on one CTCL user id would be decided by the CTCL vendor.
The course module and the study materials is being complied and the same will be made available on our website. The core dealer is expected to pass the exam on or before the date stipulated by NCDEX.
No, the membership availed at the first instance is composite one and will be valid for all the products which are to be traded on NCDEX.
No, the membership availed at the first instance is composite one and will be valid for all the products which are to be traded on NCDEX.
Upon the provisional admission as NCDEX member and being advised on the same by NCDEX, the prospective members are required to comply with the networth requirements in 2-3 weeks time.
Separate VSat connectivity is required.
No, HUF is currently not permitted for NCDEX membership.
In case of newly formed companies, only current balance sheet needs to be submitted.
Net worth of the new entity should be Rs 50 lacs. Please follow the procedure explained in detail in Annexure C-1A of the application form to calculate the networth.
NCDEX is a professionally managed, nation wide, on-line multi-commodity exchange promoted by ICICI Bank Ltd, National Bank for Agriculture and Rural Development (NABARD), Life Insurance Corporation of India (LIC), and National Stock Exchange (NSE). NCDEX is a technology driven de-mutualised commodity exchange with an independent board of directors and professionals not having any vested interest in commodity markets. It is committed to provide a world class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by the best global practices of professionalism and transparency. ; The four institutional promoters of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nation wide reach, technology and risk management skills.
It is desirable, however, we will consider waiving the same in case of persons having adequate experience in commodity market, financial markets.
National Commodity and Derivatives Exchange Ltd (NCDEX) is a public limited company registered under The Companies Act, 1956 with the Registrar of Companies, Maharashtra in Mumbai on April 23,2003. The registration no of NCDEX is U51909 MH 2003 PLC 140116
There are no additional costs other than what is stated in the application form.
The exchange does not stipulate any directives in this regard and it is free to be bilaterally decided between client and member of the exchange.
Futures trading in commodities results in transparent and fair price discovery on account of large scale participations of entities associated with different value chains and reflects views and expectations of wider section of people related to that commodities. This also provides effective platform for price risk management for all segments of players ranging from the producers, the traders, processors, exporters/importers and the end users of the commodity. The trading on futures contract on our platform will be facilitated on an online platform for market participants to trade in a wide range of commodity derivatives driven by the best global practices of professionalism and transparencies. We have provided with more details on the entire gamut of commodity trading in India in general and on NCDEX in particular in our website under "Presentations". Please visit our website www.ncdex.com.
Subject to Forwards Market Commission approval, 9 commodities, viz, Gold, Silver, Cotton, Soyabean, Soyaoil, Rape/Mustardseed, Rape/Mustard oil, Crude Palm Oil and RBD Palmolein are the commodities that will be traded in the first phase. NCDEX proposes to trade in all the major commodities approved by FMC.
For trading cum clearing member (TCM) the criteria is as follows: Net worth of Rs 50 lacs Interest free deposit of Rs 15 lacs towards base capital Collateral deposit of Rs 15 lacs in form of bank guarantees, fixed deposit. GOI securities.
The trade timings of the exchange are 10.00 a.m. to 4.00 p.m. It is also proposed to have after hours trading also.
The trade timings of the exchange are 10.00 a.m. to 4.00 p.m. It is also proposed to have after hours trading also.
Collateral security could be in the form of bank guarantee, RBI Bonds, fixed deposits and Government of India Securities. These certificates have to be deposited with the NCDEX and the same will be refunded on relinquishment of the membership.
The lock in period for the interest free security deposit fee is three years and three months.
The dominant promoter group stipulation is applicable in case of partnership firms, private limited companies and unlisted public companies. As per this stipulation, a group of not more than 4 individuals (who directly / indirectly hold more than 51% of capital in the firm / company) need to be identified as the key promoters of the entity. This exercise is an effort by NCDEX to identify and understand the individuals, who are the driving forces of the entities applying for membership on NCDEX
The membership forms will be processed at our end and in case of any additional information, the same will be called for. If found in order, the applicants will be subsequently called for personal interaction with the membership committee of NCDEX. Successful applicants will be intimated by NCDEX.
The main objective clause to be inserted in the Memorandum of Association is : To carry on the business of trading in agricultural products, metals including precious metals, precious stones, diamonds, petroleum and energy products and all other commodities and securities, in spot markets and in futures and all kinds of derivatives of all the above commodities and securities. To carry on business as brokers, sub brokers, market makers, arbitrageurs, investors and/or hedgers in agricultural products, metals including precious metals, precious stones, diamonds, petroleum and energy products and all other commodities and securities, in spot markets and in futures and all kinds of derivatives of all the above commodities and securities permitted under the laws of India. To become members and participate in trading, settlement and other activities of commodity exchange/s (including national multi - commodity exchange/s) facilitating, for itself or for clients, trades and clearing/settlement of trades in spots, in futures and in derivatives of all the above commodities permitted under the laws of India.
The interest free security deposit will be refunded to the TCM, when they express their intention to relinquish their membership rights after a cooling period of 6-12 months of surrendering the membership rights. The minimum lock in period for membership is three years and three months.
While taking membership of BSE the designated directors have executed undertaking to following effect "We hereby undertake that on name of corporate entity starting business in the Stock Exchange, Bombay, we shall cease to do any other business or render professional services in any other capacity or work as an employee".; In view of undertaking as above it is suggested that designated director on entitiy having membership of BSE does not assume responsibility as qualifying director in corporate entity seeking membership of NCDEX. However entity having membership of BSE can seek membership of NCDEX through subsidiary route.
Exposure will be permitted against base capital and collateral however a portion of the same will utilized for formation of Settlement Guarantee Fund
One can use the dish and other hardware with concurrence of NSE and service provider.
Yes, in case of NSE there is no such bar.
Currently, there is no provision to charge any fee.
No, the networth of the holding company is not taken into consideration for reckoning the networth of the entity applying for membership.
The existing stock broking company cannot apply in the same and need to form separate entity for seeking membership of NCDEX.
Forward Markets Commission has accorded in principle approval for the following national level multi commodity exchanges in the country apart from NCDEX National Board of Trade Multi Commodity Exchange of India National Commodity & Derivatives Exchange of India Ltd
An individual, partnership firm, Private limited company, public limited Company, co-operative societies are eligible to become members of NCDEX.
The certificate and statements need to be certified by a Qualified Chartered Accountant who has audited the same.
We are in dialogue with large scale players in commodity market for voluntary market making like in case of gold and silver major bullion importing banks have agreed fro market making. Similarly large commodity trading houses have agreed to do market making in commodities they are dealing in.
Yes. The participants can avail of the exemptions, if any entitled to them. The buyers will have to indicate their ability to give supporting documents / certificates / declarations prescribed under the respective State sales tax laws at the time of giving requests for taking delivery and will have to be submitted before the supplemental settlement day. Submission of incomplete or invalid declarations / certificates would amount to defaults on the part of the seller.
No. The member need not have a sales tax registration. However, if the member wants to undertake proprietary trading and take the delivery of the commodities, then he needs to have sales tax registration under the provisions of the relevant State sales tax law.
Those clients who trade with the intention of taking/giving delivery should have sales tax registration before settlement of the delivery based trades. Deliveries given by clients/participants who are not registered under the relevant State sales tax law or whose registration is not valid on the date of sale / delivery, will amount to defaults.
The client / participant are responsible to move the commodities from their warehouse into the warehouses designated by the Exchange. Such movement may be by way of stock transfers from place outside the State for which the client / participant will be responsible for issuance of certificate in Form F under the Central Sales Tax Act, 1956 to his dispatching branch. The client / participant will also be responsible for payment of octroi, entry tax, cess, etc. on entry of the goods into the local areas in the State where the designated warehouse is located and for obtaining check post declaration forms from the sales tax department. If the client / participant move the commodities from another State pursuant to a fructified sale transaction, there could be liability for payment of Central sales tax in the State from where the inter-State movement of the commodities commences. The client/participant will be responsible for the payment of the Central sales tax in such cases. The clients/participants are being advised to move the commodities into the designated warehouses well in advance and ensure compliance of provisions of law.
Yes, the client/participant will have to register in all those states where the delivery center for the commodities is located.
The amount will is reflected in the SL -01 for the buyer member and for the Seller member he has to export the data in excelsheet from Web NCFE module to view the details.
Sales tax registration is to be obtained in the State where the delivery center for the commodity is located.
Yes, inclusive of all taxes and levies means sales tax is added in the amount traded on the Exchange platform. Hence, to raise the sales invoice and to comply with local sales tax requirements member/client or appointed agent has to be registered with local sales tax authority.
At the time of supplemental settlement the buyers will have to confirm their eligibility for availing exemption from payment of sales tax. The party will have to physically deliver the support documents to their respective clearing members within 5 business days and the clearing members will forward the same to the relevant parties within the next two days thereafter.
AMC Certificate is a settlement related document which is to be provided by seller in the commodities which has delivery centers in Andhra Pradesh for e.g., Chilli, Turmeric, & Maize. Seller & Buyer both has to be registered with the Market Committee where the delivery takes place. Seller will provide AMC certificate to the corresponding buyer and the buyer will have to deposit the same with the market authorities and issue ] a fresh AMC certificate through a book provided to him by the market authorities and in case both buyer & seller are from same market place a seller will have to provide a declaration form to the buyer.
Anugya patra is a settlement related document which is to be provided by seller. Eg. In case of "Chana" at Indore. It is a document which proves that seller had paid "Mandi tax" at Indore Mandi. Mandi tax has to be paid to the Mandi authority when the seller deposits Chana for the first time. Depositor will get Anugya patra from Mandi authorities which are to be passed on to the corresponding buyer. In case, if both seller and the buyer are registered at same Mandi, the seller has to write Anugya patra. Number on the invoice which will be provided to the buyer.
Rates of sales tax for commodities differs from State to State. In the case of trades culminating into delivery, sales tax as per the delivery center/state will be payable. Many States as per the sales tax laws, also provide for levy of additional tax, turnover tax, resale tax, etc. which may or may not be recoverable from the buyer depending on the provisions of the local State sales tax law.
On the day of settlement the sales tax incidence on the trades settled would be notified to the clearing members, which will be settled on the supplemental settlement day, which is normally two (2) days after the actual settlement day.
t is obligatory on the part of the seller to collect the sales tax from the buyer and deposit the same into the Government Treasury. However, in the case of commodities which are liable to tax on purchases only and not on sales, the buyer will have to discharge the liability for payment of tax. In all other cases, payment of taxes will be the sole responsibility of the seller.
Get in touch with the relevant department of Govt. who will register and issue the service tax registration no. and certificate.
The Service Tax shall be paid in the specified branches of designated banks.
In case of delay in payment of service tax, interest @1.25% per month or part thereof should be paid which may vary and will have to be confirmed with the relevant department.
All the persons providing taxable services shall register with the Central Excise Department of the concerned jurisdiction (Local Area). The registration shall be for each premise where billing is done. Only one registration is needed even if the service is provided in more than one premise provided the bills are raised in one place. If bills are raised in different premises, the registration should be obtained separately for each such premise where billing is done.
Service Tax is payable on the amount actually received i.e. Total Amount received by the Member.
No specific mention is made in the Act. However, records like invoice copy and books of account which constitute sufficient evidence for calculation of service tax liability and payment of service tax shall be maintained.
Service Tax is a form of indirect tax imposed by the Government on specified services called 'taxable services'. Presently it covers 58 services (for detailed information the Member will have to Contact the local Services Tax Office).
12.5% on the value of taxable service (i.e.) gross amount received by the service tax provider (member) for the services rendered by Member to the Client.
No. Only one registration is required even if the service provider provides more than one taxable service.
The service tax shall be paid by the service provider (ie. the Member)
No. The buyer and the seller have to express their intention for delivery. Deliveries would be matched randomly at client level. Contracts not assigned delivery would be settled in cash
Yes, provided they are re-validated by the assayer.
To start with, we are looking at only one delivery center for each commodity and only one warehouse in that location. Over a period of time, we would be adding warehouses to the list.
The exchange will specify, in its contract description, the particular grade / variety of a commodity that is being offered for trade. A range will be specified for all the properties and only those grades / varieties, which fall within the range, will be accepted for delivery. In case the properties fall within the range, but differ from the benchmark specifications, the Exchange will specify a premium / rebate
Any buyer intending to take physicals would have to put a request to its Depository Participant, who would pass on the same to the registrar and the warehouse. On a specified day, the buyer would go to the warehouse and pick up the physicals.
The seller intending to make delivery would have to take the commodities to the designated warehouse. These commodities would have to be assayed by the Exchange specified assayer. The commodities would have to meet the contract specifications with allowed variances. If the commodities meet the specifications, the warehouse would accept them. Warehouses would then ensure updating the receipt in the depository system giving a credit in the depositor's electronic account.
All open contracts not intended for delivery and non-deliverable positions at client level would be cash settled.
Any disputes in regard to the quality / quantity will be referred to the Arbitration committee set up for the purpose.
The buyer intending to take delivery would give declaration for re-sale at the time of giving intention for delivery. Accordingly the seller would issue the invoice, exclusive of sales tax. The declaration form duly signed by the buyer would be forwarded through the buyer's clearing member to the seller's clearing member within a specified time after pay-in and payout.
The seller would give the invoice to its clearing member, who would courier, the same to the buyer's clearing member.
For open positions on the expiry day of the contract, the buyer and the seller can give intentions for delivery. Deliveries would take place in electronic form. All other positions would be settled in cash.
NCDEX would prescribe the accreditation norms, comprising of financial and technical parameters, which would have to be met by the warehouses. NCDEX would take assayer's/Structural Engineer's certificate confirming the compliance of the technical norms by the warehouses.
NCDEX has tied-up with NCCL for clearing the trades
Prices quoted for the futures contracts would be basis warehouse and exclusive of sales tax applicable at the delivery center. For contracts materializing into deliveries, sales tax would be added to the settlement amount. The sales tax would be settled on the specified day after the payout.
Those commodities will not be available for delivery on the clearing corporation. Hence the deliverable electronic balance would be automatically reduced. Warehouse would place the commodities in a separate area, indicating that they are not available for electronic trading.
Partial delivery as well as bad delivery would be considered as default. Penalties would be levied.
All contracts settling in cash would be settled on the following day after the contract expiry date. All contracts materializing into deliveries would settle in a period of 2-7 days after the expiry. The exact settlement day would be specified for each commodity.
Rs.6/- per Rs100, 000/- i.e. 0.006% of the trade value.
In case of grains/seeds, warehouses would earmark a definite storage capacity within the warehouse premises for members of NCDEX, while in case of oils, specified tankers would be earmarked for NCDEX participants.
Settlement guarantee fund would be maintained and managed by NCDEX.
We are looking at following assayers: SGS India Pvt. Limited, Geo-Chem Laboratories, Dr. Amin Superintendents & Surveyors Pvt Ltd., Calib Brett and Stewart. Only certificates given by specified assayers by NCDEX will be accepted. All the certificates issued will have time validity
Following banks have agreed to act as clearing bankers: ; Canara Bank HDFC Bank ICICI Bank UTI Bank
We have approached Bank of Baroda Canara Bank Global Trust Bank HDFC Bank ICICI Bank IDBI Bank Indusind Bank UTI Bank
The warehouse concerned would decide the warehousing charges. However the warehouse charges would be made available on our website
Yes. The assayers and or other experts on behalf of NCDEX would carry out surprise health checks and inventory verification.
Yes. These would be pre-defined and made available on the website. The settlement obligation would be impacted on account of the premium / rebates in case of deliverable positions. The parameters which would be considered for premium / rebate computation as well as the methodology would be specified by NCDEX
No, He has to pay stamp duty in the state where the client is registered and is trading, irrespective` of the where the registered office of the member is located and contract notes are printed.
No, he has to pay in individual states depending on where his client is trading. E.g.: If the Client is trading in Mumbai, and the main office is based in Delhi from where the Contract Notes are printed, then Stamp duty is applicable according the Maharashtra Stamp Duty Act for the particular Client and is to be paid in the State of Maharashtra.
Stamp Duty is applicable on the Value of the Contract note and is calculated on the percentage specified by the stamp duty authority of the relevant state.
Yes, it is to be paid state wise as all state govt. has specified certain value of stamp duty to be paid for futures contracts.
No, he has to pay stamp duty whichever is higher and pay in the state which has higher stamp duty.
Yes. As per Article 51 A of the amended Bombay Stamp Act, 1958, Members/Constituents in Maharashtra have been requested to pay stamp duty on all transactions in forward contracts in commodities at the rate of Re 1 per lack or part thereof. Please refer to our circular no. NCDEX/LEGAL- 005/2005/109 dated May 12, 2005 in this regard. As stamp duty is levied under State law and if there is a contention by a member that the stamp duty is not leviable, members may raise contention before the State stamp duty authorities.
He has to check with the relevant stamp duty authorities in the Stamp duty office of the relevant state.