Transcript COTTON MEET - 2008 Compulsory Delivery based Electronic Spot Trading in Cotton

COTTON MEET - 2008
Compulsory Delivery
based Electronic Spot
Trading in Cotton
By Girish Raipuria
Senior Vice President
20th December 2008
www.nationalspotexchange.com
National Spot Exchange – A Project
•
A National level Electronic Transparent institutionalized spot market.
•
A market place where farmers, traders, corporates, processors and
importers can sell and buy at the best possible and competitive rates.
•
Provides counter party guarantee in respect of all trades.
•
Provides services like quality certification, storage of goods and other
customized value added services.
•
With the launch of NSEL, the canvass of commodity trading would be
complete – India has both spot and futures market available on
electronic platform with national reach.
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Features of NSEL
• Demutualised Exchange
• Capital Adequacy Norms for the Members
• Transparency in operations and decision making
• Dissemination of real time price and trade information
• Delivery based Market
• Settlement Guarantee
• Counter Party Risk
• Efficient clearing and settlement system
• Experience in handling commodity markets
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Automated Trading
• NSEL introduces - for the first time in India
- automated screen based trading in commodities
- resulting into compulsory delivery
• NSEL uses a modern, fully computerized trading
system designed to offer the market participants
- across the breadth and length of the country
- a safe and easy way to trade in commodities
• NSEL trading system is called as
Electronic Spot Trading’ (NEST) System.
‘National
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NEST System
• An order driven trading system
• National reach
• Identity of the trader undisclosed
• Flexibility for placing orders
• Transparent, Objective and Fair system for
automatic order matching
• Complete Online Market Information
• Price Ticker - flexible speed & customized portfolio
• Square-off facility
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Connectivity for Market Access
• Secured access to Trader Workstation (TWS)
through – Very Small Aperture Terminal
– Leased Line
– Internet
• Mapping with reference to networking
• Unique Member ID and User ID
• Password of Member Admin terminal and Trader
Workstation to be changed within 14 days.
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Network Platform
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Order Book
• Orders are first validated before acceptance.
• Orders are first numbered and time-stamped
on receipt and then immediately processed for
potential match.
• Orders are matched based on - Price Time Priority
- Best Buy and Best Sell
• If a match is not found, then orders remain in
the system.
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Market Timings
• Trading in the commodities takes place on
all the days except Sunday and Exchange
specified Holidays.
• Timings for the agri-commodities are:
* Monday to Friday: 10.00 am to 6.00 pm
(till 11.30 pm for other commodities)
* Saturday:
10.00 am to 2.00 pm
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Trader Workstation
• The trader workstation (TWS) is the terminal by
which a member accesses the trading system.
• Each trader has a unique identification for login.
• A member can have several user IDs allotted to
him for accessing TWS concurrently.
• Daily Turnover limits for each User for normal
market as well as for auction market.
• A member can set-up his network across the
country.
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Clearing and settlement
• Delivery both in physical and demat
• Delivery and pay in dates:
– Gold and Silver: T + 1
– Agri commodities: T + 3 / T + 4….,
commodity-specific, depending upon time lag
in quality checking
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Trading, Clearing and Settlement
Mechanism – a Flow Chart
NSEL
On – Line Terminal
Trading
(Bid / Ask)
On – Line Terminal
Matching
Member/Broker
Seller
Farmer
Contract Farmer
Importers
Cooperatives
Government
Clearing House
Clearing Bank
Settlement
Member/Broker
Buyers
Corporate
Wholesalers
Exporters
Traders
Government
Warehousing / Logistics
Physical Delivery
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Advantages of NSEL Platform
• Desktop Monitoring – operational ease
• Efficient Warehousing and logistics support
• Transparency in transaction and settlement
• Timely disbursement of commodities and funds
• Guaranteed Trade with Weighment and Quality assurance
• Complete end-to-end solution
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Advantage of NSEL Platform contd..
Transaction fee:
• Non delivery based transactions:
Rs. 10 to Rs. 5 per lakh based on turnover slabs
• Storage charges:
Rs. 2/- per bale per day
• Lesser cost of intermediation
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Thank You.
National Spot Exchange Limited
102 - A, Landmark,
Suren Road, Chakala, Andheri (East)
Mumbai - 400093.
Tel: +91-22-67619900 Fax: +91-22-67619931
Email: [email protected]
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