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Contract Specifications of Gold Petal

 17 Oct 2019

Know the contract specifications of gold petal and it covers 1) Contract Launch Calendar of Gold Petal 2) Delivery and Settlement Procedure of Gold Petal Contract 

Symbol

GOLDPETAL

Description

GOLDPTLMMMYY

Contract Listing

Contracts are available as per the Contract Launch Calendar.

Contract Start Day

1st day of contract launch month. If 1st day is a holiday

then the following working day.

Last Trading Day

Last calendar day of the contract expiry month. If last calendar day is a holiday then preceding the working day

Trading

Trading Period

Mondays through Fridays

Trading Session

Monday to Friday: 9.00 a.m. to 11.30/ 11.55 p.m.

Trading Unit

1 gram

Quotation/Base Value

1 gram

Price Quote

Ex-Mumbai (inclusive of all taxes and levies relating to import duty, customs but excluding GST, any other

additional tax, cess, octroi or surcharge as may be applicable)

Maximum Order Size

10 kg

Tick    Size    (Minimum    Price

Movement)

Re. 1 per 1 gram

Daily Price Limits

The base price limit will be 3%. Whenever the base daily price limit is breached, the relaxation will be allowed upto 6% without any 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 relaxed upto 9%

 

In case price movement in international markets is more than the maximum daily price limit (currently 9%), the same may be further relaxed in steps of 3% informed to

Regulator immediately.

Initial Margin*

Minimum 4% or based on SPAN whichever is higher

Extreme Loss Margin

Minimum 1%

Additional and/ or Special Margin

In case of additional volatility, an additional margin (on both buy & sell side) and/ or special margin (on either

buy or sell side) at such percentage, as deemed fit; will be imposed in respect of all outstanding positions.

 

 

Maximum     Allowable     Open Position

For individual clients: 5 MT or 5% of the market wide open position, whichever is higher for all Gold contracts combined together.

 

For a member collectively for all clients: 50 MT or 20% of the market wide open position, whichever is higher for all Gold contracts combined together.

Delivery

Delivery Unit

1 gram

Delivery Period Margin**

Delivery period margins shall be higher of: a.3% + 5 day 99% VaR of spot price volatility or

b. 25%

Delivery Center(S)

Mumbai and additional delivery centers at Ahmedabad

and New Delhi.

Quality Specifications

999 purity,

LBMA approved suppliers or other suppliers as may be approved by MCX, to be submitted along with supplier’s quality certificate/certicard which mentions the serial number and accompanies the

gold 1 gram coin.

Due       Date       Rate       (Final Settlement Price)

Exchange shall announce the DDR based on the Mumbai Spot price for Gold (10gms) 995 purity, which shall be converted to 999 purity (Gold Spot price 995 purity * 999/995), polled on the last day of the expiry of this Gold Petal contract by around 5.00pm. The arrived spot price will be converted for 1 gms Gold Petal (Gold spot price per 10 gms X 1/10).

 

No trading shall be allowed after the declaration of DDR

Delivery Logic

Compulsory

 

*The Margin Period of Risk (MPOR) shall be 2 days in accordance with SEBI Circular no. SEBI/HO/CDMRD//DRMP/CIR/P/2016/77 dated September 01, 2016 accordingly, the initial margin shall be scaled up by root 2.

**As per SEBI directive SEBI/HO/CDMRD/DRMP/CIR/P/2016/77 dated Sep 01, 2016

 

Contract Launch Calendar of Gold Petal

 

Contract Launch Months

Contract Expiry Months

July 2019

October 2019

August 2019

November 2019

September 2019

December 2019

October 2019

January 2020

November 2019

February 2020

December 2019

March 2020

 

(Reference Circular No. MCX/TRD/350/2019 dated June 28, 2019)

 

Delivery and Settlement Procedure of Gold Petal Contract

 

Delivery logic

Compulsory Delivery

Last       day       of

trading

Last calendar day of the contract expiry month. If last

calendar day is a holiday then preceding working day

Tender Period

5 preceding working days before the contract expiry month

Delivery Period

Two working days after the contract expiry

Tender       Period Margin

5% incremental margin for last 5 working days on all outstanding positions. Such margin will be addition to initial,

additional and special margin as applicable

Pay-in                 of

commodities (delivery            by seller member)

E+2 working days: 12.00 p.m. (E stands for expiry) except Saturdays, Sundays and Trading Holidays. The seller will have to do the delivery pay-in through ComRIS Account by earmarking his existing valid commodity balance in the ComRIS Account towards the pay-in obligation.

 

On expiry all the open positions shall be marked for delivery.

Funds Pay-in

E+2 working days: 12.00 p.m.

Delivery Pay-out

E+2 working days: 2.00 p.m.

Pay-out              of

Funds

E+2 working days: 2.00 p.m.

Packaging

1 Gram Gold Coin with tamper proof only.

 

Mode of communication

MCX eXchange

Delivery     Period Margin

Delivery period margins shall be higher of:

a. 3% + 5 day 99% VaR of spot price volatility Or

b. 25%

Exemption from margin during delivery period

Margin is exempted on receipt of delivery pay-in through ComRIS Account by earmarking existing valid commodity balance in the ComRIS Account towards the pay-in obligation.

Penal Provision

Seller Default:

 

3% of Settlement Price + replacement cost (difference between settlement price and higher of the last spot prices on the commodity pay-out date and the following day, if the spot price so arrived is higher than Settlement Price, else this component will be zero.)

 

Norms for apportionment of penalty –

 

  • At least 1.75% of Settlement Price shall be deposited in the Settlement Guarantee Fund (SGF) of the MCXCCL.
  • Up to 0.25% of Settlement Price may be retained by the MCXCCL towards administration expenses.
  • 1% of Settlement Price + replacement cost shall go to buyer who was entitled to receive delivery.

 

 

 

Over and above the prescribed penalty, MCXCCL shall take suitable penal/ disciplinary action against any intentional / wilful delivery default by seller.

 

Buyer default shall not be permitted.

Allocation          of

delivery

As per the DDR on the expiry day.

Delivery

Center(S)

Mumbai and additional delivery centers at Ahmedabad and

New Delhi.

Procedure for taking delivery at additional delivery centres

  1. Submission of intention by the buyers to take delivery at the additional delivery center by 3:00 pm 5 calendar days prior to the contract expiry. If it falls on Saturday, Sunday or any other trading holiday, then the preceding day will be considered.
  2. On same day, MCX/MCXCCL will broadcast on the Trader Work Station by 3.30 pm the total quantity and delivery center where the buyers are interested to take the delivery.
  3. Sellers interested to give delivery at such additional delivery center may send their intention to MCXCCL by 4.00 pm 5 calendar days prior to the contract expiry month. If it falls on Saturday, Sunday or any other trading holiday, then the preceding day will be considered. Delivery will be possible only if intention of the buyers and sellers matches for the additional delivery center.
  4. If intention of the buyers and sellers does not match, the delivery will be considered only at the base delivery center.
  5. Buyers to be informed about allocation of delivery at additional delivery center by 5.00 pm 5 calendar days prior to the contract expiry.
  6. On confirmation by MCXCCL, neither seller nor buyer shall withdraw from their commitment by squaring off their positions to the extent of the intention for delivery at additional delivery center. Failure to honour delivery obligation at the additional delivery center would be treated as a delivery default and subject to the penal provisions as defined in the relevant contract specification and the delivery settlement procedure.
  7. Pay-in/ pay-out of funds / commodities, timelines and penal provisions for delivery at additional delivery center shall be as applicable for the base delivery

center.

Deliverable grade                  of

underlying commodity

The selling members tendering delivery will have the option of delivering such grades as per the contract specifications. The buyer has no option to select a particular grade and the

delivery offered by the seller and allocation by the MCXCCL shall be binding on him.

Buyer’s

obligation

Buyer default shall not be permitted.

Close      out      of

All outstanding positions on the expiry of contract, not settled by

 

outstanding

positions

way of delivery in the aforesaid manner, will be settled as per the due date rate with penalty as per penal provisions.

Verification by the Buyer at the time of release of delivery

At the time of taking delivery, the buyer can check his delivery in front of designated vault personnel. If he is satisfied with the quantity and quality of material, then Vault will release the goods. If Buyer is not satisfied with the quality, he can request for assaying by any of the MCXCCL approved Independent Assayers. If the buyer chooses for assaying, designated vault person will carry the goods to the Assayer’s facilities, get it assayed and bring it back to designated vault along with assayer’s certificate. The report shall be final and binding on both buyer and seller. In case of Variation in quality in the Independent Assayer’s report from the original report submitted, the buyer and seller will have to mutually negotiate the final settlement proceeds within 1 working day from receipt of assayer’s report. The cost of this assaying as well as cost of transportation from designated vault  to assayer’s facilities to and fro will be borne by the buyer. The vault charges during such period will be borne by the buyers. If the buyer does not opt for assaying at the time of lifting delivery, then he will not have any further recourse to challenge the quantity or quality subsequently and it will be assumed that he has received the quantity and quality

as per the delivery obligation by the seller.

Validation Process

On receipt of delivery, the designated vault personnel will do the following validations:

  1. Whether the person carrying 1 Gram Gold Coin is the designated clearing agent of the member.
  2. Whether the selling member is a bonafide member of the MCXCCL.
  3. Whether the quantity being delivered is from MCXCCL approved refinery
  4. Whether the serial no is present on the certificate/ certicard accompanying the gold 1 gm coin.

 

Any other validation checks, as they may desire.

Delivery Process

In case any of the above validation fails, the designated vault will contact the MCXCCL office and take any further action, only as per instructions received from the MCXCCL in writing. If all validations are through, then the designated vault personnel will put the 1 Gram Gold Coin in the vault. Then the custodian of designated vault will issue appropriate

receipt for having received the goods.

Quality Adjustment

The price of 1 Gram Gold Coin is on the basis of 999 purity. In case a seller delivers 9999 purity, he would get a premium. In such case, the sale proceeds will be calculated by way of

Due Date Rate * 9999/ 999

Procedure of taking delivery from the Vault

For the purpose of taking delivery of goods fully or partially, the Member shall raise withdraw request in ComRIS and send an Authority letter on his letter head to the MCXCCL, authorising a representative on his behalf to take the delivery. The Authority letter sent by the Member shall consist of the following details:

  1. Name of the authorised representative.
  2. Name of the Commodity along with quantity.
  3. Name of the Vault along with the location.

 

 

  1. Signature of the authorised representative.
  2. Proof of Identity viz. PAN card, driving license, Election ID.
  3. Photo identity proof duly attested by the Member.

 

The above-mentioned details are required to be sent to the MCXCCL. Once the MCXCCL receives the above-mentioned details, the MCXCCL will send it to the Vault authorities directly.

 

Based on the said details, the Vault will issue the requested quantity to the authorised representative who has to present himself personally at the Vault along with the requisite photo identity proof in original, the copy of which was sent / communicated to the MCXCCL by its Member.

 

The Vault officials will, upon final scrutiny/checking of the identity, deliver goods to the representative of the Member. The Vault officials in case of any discrepancy or doubt or any other reason may refuse to issue the goods to the representative under the intimation to the MCXCCL.

 

The delivery given to the representative shall be final & binding to the Member and their constituents at all times.

Taxes,       duties, cess and levies

Ex-Mumbai, Inclusive of all charges/ levies relating to import duty, customs to be borne by Seller. But excluding GST, any other additional tax, cess, octroi or surcharge as may become due & payable under any law, rules or regulations,

applicable from time to time, to be borne by the buyer.

Endorsement of delivery order/delivery

The buyer member can endorse delivery order/delivery to a constituents or any third party with full disclosure given to the

MCXCCL. Responsibility for contractual liability would be with the original assignee.

Vault, Insurance and

Transportation charges

Borne by the seller till the date of pay-out of delivery and the buyer after the date of pay-out.

Extension          of

delivery period

As per MCXCCL decision due to a force majeure or

otherwise.

Making    charges for                taking

Delivery

Buyer shall have to pay Rs.100/- (over and above the DDR) per 1 Gram Gold Coin as a making charges, which

shall be paid to the seller.

Legal obligation

The members will provide appropriate tax forms wherever required as per law and as customary and neither of the

parties (seller member and buyer member) will unreasonably refuse to do so.

Applicability      of Regulations

The general provisions of Byelaws, Rules and Regulations of the MCXCCL and decisions taken by SEBI/ the Board of Directors/ Relevant Authority of the MCXCCL in respect of matters specified in this document shall form an integral part

of this contract. The MCXCCL or SEBI, as the case may be, may further prescribe additional measures relating to delivery

 

 

procedures, vaulting, quality certification, margining, and risk management from time to time.

 

Members and market participants who enter into buy and sell transactions on MCX need to be aware of all the factors that go into the mechanism of trading and clearing, as well as all provisions of the MCXCCL’s Bye Laws, Rules, Regulations, circulars, directives, notifications of the MCXCCL as well as of the Regulators, Government and other authorities.

 

It is the sole obligation and responsibility of the Members and market participants to ensure that apart from the approved quality standards stipulated by the MCX, the commodity deposited / traded / delivered through the Approved warehouses/Vaults of MCXCCL is in due compliance with the applicable regulations laid down by authorities like BIS, Orders under Packaging and Labelling etc., as also other State/Central laws and authorities issuing such regulations in this behalf from time to time, including but not limited to compliance of provisions and rates relating to GST, APMC Tax, Mandi Tax, LBT, octroi, stamp duty, etc. as may become due & payable under any law, rules or regulations, applicable from time to time on the underlying commodity of any contract offered for deposit / trading / delivery and that MCX/MCXCCL shall not be responsible or liable on account of any non-compliance thereof.

 

All the Sellers giving delivery of goods and all the buyers taking delivery of goods shall have the necessary GST Registration as required under the Goods & Service Tax (GST) Act and obtain other necessary licenses, if any.

 

In respect of all contracts executed by the Members on MCX, it shall be the responsibility of the respective members to pay all applicable statutory fee, stamp duty, taxes and levies in respect of all deliveries as well as futures contracts directly to the concerned Central/State/Local Government Departments and the MCX/MCXCCL shall not be held liable or accountable or responsible on account of any non- compliance thereof.

 

The buyer shall have to lodge their claim against quality and/or quantity of goods/ delivery allocated to them while retaining disputed goods in the designated vault itself (without lifting them out of the vault), if any, within 48 hours from the date of scheduled pay out of the MCXCCL and failing which, no claim shall be entertained by the MCXCCL thereafter.

 

The MCXCCL is not responsible and shall not be held liable or accountable or responsible for value of the goods/stock of the

commodities stored/lying in MCXCCL designated warehouse/s, vault agency and which is fully/partially confiscated / seized by

 

 

any local or statutory or any other authority for any reason whatsoever or for any deterioration in quality of the goods stored due to above reason or which have passed the Final Expiry date and continue to remain in the MCXCCL accredited warehouse.

The decision of the MCXCCL shall be final and binding to all Members and their constituents in this regard. (The interpretation or clarification given by the MCXCCL on any terms of this delivery and settlement procedure shall be final and binding on the members and other market participants.)

 

(Reference Circular no. MCXCCL/C&S/147/2019 dated Jun 28, 2019).

 

Original Link: https://www.mcxindia.com/docs/default-source/products/contract-specification/gold-petal/gold-petal-october-2019-contract-onwards.pdf?sfvrsn=c728a190_0

 

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