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Days after slashing transaction charges, the National Commodity and Derivatives Exchange (NCDEX) has re-launched the gold and silver futures with additional delivery centres to boost trading volumes.
expiry date
The exchange has aligned the expiry date of the new gold contracts to that of currency futures, unlike its competing exchange MCX which tracks the Comex, the commodity trading platform of the New York Mercantile Exchange.
The one kg gold and 30 kg silver 30 contracts with expiry in October, December and February 2014 are available for trading.
Vijay Kumar, Chief Business Officer, NCDEX, said the new precious metal contracts allow participants to hedge more effectively, since the tender period are one day after the expiry of currency futures contracts on other exchanges, besides providing an opportunity to take delivery before the expiry of gold contracts in other exchanges.
steel contracts
The exchange also plans to re-launch its steel contract with quality specification from the Bureau of Indian Standard.
Additionally, the exchange has two delivery centres in Mumbai and Delhi, apart from the existing Ahmedabad centre.
guarantee fund
On the new settlement guarantee fund, Ananda Kumar, Chief Corporate Affairs, NCDEX, said the exchange has Rs 2.41 crore as settlement guarantee fund sourced from the three per cent penalty collected from errant investors.
“We split the penalty and deposit 1.7 per cent into the investor protection fund, 0.25 per cent to the settlement guarantee fund, while one per cent is given as compensation to members who had suffered a loss,” he said.
However, the Forward Markets Commission has made it mandatory for exchanges to set aside five per cent of their gross revenue recorded in the last five years as settlement guarantee fund.
Following this, Ananda Kumar said considering that the exchange has registered Rs 600 crore revenue in the last five years, it has to keep aside Rs 30 crore as the settlement guarantee fund.
In order to improve the quality of goods delivered on the exchange platform, NCDEX has decided to test all the goods entering the exchange warehouse twice, by different agencies.
As an abundant caution, it will also test the goods while it is being taken out of the warehouse by the buyers.
> suresh.iyengar@thehindu.co.in
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