www.nationalspotexchange.com cotton meet - 2008 by - girish raipuria senior vice president 20 th...

www.nationalspotexchange.com

COTTON MEET - 2008

By -Girish RaipuriaSenior Vice President20th December 2008

Compulsory Delivery based Electronic Spot

Trading in Cotton


• 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.

National Spot Exchange – A Project


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


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 ‘National Electronic Spot Trading’ (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

NEST SystemNEST System


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.


Network Platform


• 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.

Order BookOrder Book


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


Trader Workstation

• The trader workstation (TWS) is the terminal by which a member accesses the trading system.

• Each trader has a unique identification for log-in.

• 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.


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


NSEL

Warehousing / Logistics

Physical Delivery

SellerFarmer

Contract FarmerImporters

CooperativesGovernment

On – Line Terminal

BuyersCorporate

WholesalersExportersTraders

Government

Trading(Bid / Ask)

Matching

Clearing House

Clearing Bank

Settlement

Member/Broker Member/Broker

On – Line Terminal

Trading, Clearing and Settlement Trading, Clearing and Settlement Mechanism – a Flow ChartMechanism – a Flow Chart


• 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

Advantages of NSEL PlatformAdvantages of NSEL Platform


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

Advantage of NSEL Platform Advantage of NSEL Platform contd..contd..


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]

www.nationalspotexchange.com cotton meet - 2008 by - girish raipuria senior vice president 20 th...

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