Delivery Mechanism

Delivery Mechanism One of the methods of settling the contracts is by taking or making delivery. Delivery period at MEXM is last 5 days of the contract expiry month. After schedule for expiry of contract members can either square up their position or give delivery to settle their outstanding contracts. Detail delivery provision and its manual shall make available separately. Delivery related arrangements shall be based upon clearing member. Various steps required to be followed by the participants having outstanding position on last 5 days of contract expiry month are as follows.

Steps to follow

  • Sellers have to convey intention on 3 days prior to trading expiry of contract for trade on the delivery month
  • The intentions are then matched and assigned by the Clearing House Department with the corresponding buyers. As in the case universally, seller has freedom to tender delivery during the delivery period at any approved delivery centers. In other words, buyer cannot demand and enforce for delivery and about to delivery center of his choice. When the seller gives intimation, a call is made to the corresponding buyer to whom the delivery is assigned by the Clearing House Department. Delivery margin is collected from the buyer.
  • Within three days from the position transfer, the buyer has to maintain the required funds in their clearing & settlement account while the seller has to tender the certified receipts to the exchange along with the computation of warehouse charges. On the 3rd day, the exchange makes pay-in & payout simultaneously after retaining the warehouse charges margin, governmental duties and other tax from the buyer. Seller has to complete the payment formalities of warehouse charges.
  • After the completion of pay-in and payout, duly endorsed certified receipts are sent to the buyer immediately.
  • Settlement of warehouse charges, margins, duties and tax margins take place soon after receipt of relevant documents (copies of sales bill, tax form) from the Member/Trader.
  • A detail delivery provision shall make available in this regards. CM shall notify to all relevant parties about delivery details. That shall mention delivery location, period, grading system, dispute settlement procedure and all other requisites.