Delivery and Settlement Procedure

Basis Delivery Centre - Three working days prior to expiry of contract including expiry day. Additional Delivery Centre – Starts from 25th day of the preceding month to the expiry month. If 25th day is non-working day, the tender period will start from next working day.

In case of Gold Futures, for both Base and Additional Delivery Centre - Three working days prior to expiry of contract including expiry day.  

The seller will have to provide a valid delivery pay-in instruction through NSE Clearing Interface towards the pay-in obligation.

On Tender Days:
On any tender days by 7.30 p.m. except Saturdays, Sundays and Trading Holidays. Marking of delivery will be done on the tender days based on the intentions received from the sellers after the trading hours.

On Expiry:
On expiry all the open positions shall be marked for delivery. Delivery pay-in will be on E + 1 basis by 11.00 a.m. except Saturdays, Sundays and Trading Holidays.

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 CSGF of Clearing Corporation.
• Up to 0.25% of Settlement Price may be retained by Clearing Corporation 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, Clearing Corporation shall take appropriate penal/ disciplinary action against any intentional / wilful delivery default by seller.          Any seller having open position on the expiry date fails to deliver on the next day then a penalty as per the penal provision will be imposed to the defaulting seller.   Buyer default shall not be permitted

Buyer Default:

• Penalty on buyer in case of default by buyer in the obligations arising out of compulsory delivery contract for non-agriculture commodity shall be as follows:
• 3% of Settlement Price
• Replacement Cost (difference between settlement price and lower of the last spot prices on the commodity pay-out date and the following day, if the spot price so arrived is lower 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 CSGF of the Clearing Corporation.

• Up to 0.25% of Settlement Price will be retained by the Clearing Corporation towards administration expenses.
• 1% of Settlement Price + replacement cost shall go to seller.

Penalty for Repeated Default:

For each instance of repeated default, an additional penalty shall be imposed on the buyer or seller which shall be as follows:

• 3% of the value of the delivery default. (value of delivery default shall be computed as short quantity multiplied by the settlement price. 3% shall be levied on the value of default.
• Repeated default shall be defined as an event, wherein a default on delivery obligations takes place 3 times or more during a six-month period on a rolling basis. For this purpose, period of 6 months shall be 6 calendar months including the current month in which the default has taken place. Default in each expiry shall be counted as an instance.

Buyer default shall not be permitted

(only for Gold 1g Futures): In case of buyer default, the Clearing Corporation shall review the loss incurred by the non-defaulting Party, i.e. Seller, at its sole discretion, and accordingly, levy penalty on the defaulting buyer. However, such penalty shall be within the overall cap of delivery margins collected by the CC, from such defaulting buyer.

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 metal, he can insist for assaying. The clearing member in such case is required to submit assaying request to the Clearing Corporation within 48 hours of receiving the metal.

If the receiving member chooses for assaying, Clearing Corporation shall communicate the same to vault. Designated vault person will then carry the commodity to the assayer’s facilities as specified by Clearing Corporation, get it assayed and bring it back to the 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 one 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.

1. Whether the person carrying Gold/ Silver is the designated clearing agent of the member
2. Whether the selling member is the bonafide member of the Exchange/ Clearing Corporation
3. Whether the quantity being delivered is from Clearing Corporation approved refinery
4. Whether the serial numbers of all the bars is mentioned in the packing list provided
5. Whether the individual original quality certificates are accompanied with the Gold/ Silver Bars

Any other validation checks, as they may desire.

In case any of the above validation fails, the designated vault will contact NSE Clearing office and take any further action only as per instructions received from the Clearing Corporation in writing.

If all validations are through, then the designated vault personnel will put the Gold/ silver in the vault. Then the custodian of designated vault will issue appropriate receipt for having received the goods. Designated vault in front of the selling member’s clearing agent, will deposit the said metal into their vault and enter the details of the commodity in NSE Clearing Interface.

For the purpose of taking delivery of goods fully or partially, the Member shall raise withdraw request in the NSE Clearing Interface and send an Authority letter on his letter head to the CC, 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 authorized representative
2. Name of the Commodity along with quantity
3. Name of the Vault along with the location
4. Signature of the authorized representative
5. Proof of Identity viz. PAN card, Driving License, Election ID card
6. Photo identity proof duly attested by the member.

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

Based on the said details, the Vault will issue the requested quantity to the authorized 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 Exchange/CC 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 Exchange/CC.

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

The general provisions of Byelaws, Rules and Regulations of the Exchange/CC and decisions taken by Regulator of Commodity Exchanges and Clearing Corporation, Board of Directors/ Relevant Authority of the Exchange/CC in respect of matters specified above will form an integral part of this contract. The Exchange/CC or Regulator of Commodity Exchanges and clearing corporation as the case may be 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 need to be aware of all the factors that go into the mechanism of trading and clearing, as well as all provisions of the Exchange/CC's Bye Laws, Rules, Regulations, circulars, directives, and notifications of the Exchange/CC 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 Exchange, the commodity deposited / traded / delivered through the Approved warehouses/Vaults of Exchange/CC is in due compliance with the applicable regulations laid down by authorities like Food Safety Standard Authority of India , 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 the Exchange/CC shall not be responsible or liable on account of any non-compliance thereof.

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

In respect of all contracts executed by the Members of the Exchange, 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 Exchange/CC 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/withdrawing them out of the vault), if any, within 48 hours from the date of scheduled pay out of the Exchange/CC and failing which, no claim shall be entertained by the Exchange/CC thereafter.

The Exchange/CC 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 CC designated warehouse/s, vault agency/ Clearing House 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 CC accredited warehouse/vault. The decision of the Exchange shall be final and binding to all Members and their constituents in this regard. (The interpretation or clarification given by the Exchange/CC on any terms of this contract shall be final and binding on the members and others.)