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