Guidelines for warehousing norms for agricultural/agri-processed goods and non-agricultural goods (only base/industrial metals) underlying a commodity derivatives contract having the feature of physical delivery
Summary
This circular establishes revised guidelines for warehousing norms for agricultural and base metals underlying commodity derivatives with physical delivery features. It mandates Clearing Corporations to implement comprehensive frameworks ensuring good delivery and compliance with SECC Regulations. The new norms supersede previous circulars and become effective from June 1, 2021. This section outlines the accreditation process for Warehouse Service Providers (WSPs) by Clearing Corporations, including eligibility criteria and financial soundness requirements. It details specific net-worth thresholds based on commodity types and mandates strict adherence to legal compliance and business reputation standards. The text further defines the calculation methodology for net worth and establishes conditions for maintaining accreditation validity. Section 3.2 mandates WSPs to submit specific financial documents and certificates to the Clearing Corporation within defined timelines. Sections 3.3 through 3.6 establish requirements for Security Deposits and Financial Security Deposits, including amounts, forms, exposure norms, and coordination with WDRA. Section 4 and Section 5 introduce fit and
Text
Warehousing infrastructure is critical for the delivery mechanism; Regulation 43A of SECC Regulations requires Clearing Corporations to ensure guarantee for settlement including good delivery.
Clearing Corporations must put in place a comprehensive framework of norms for adherence by Warehouse Service Providers (WSPs), assayers, and allied service providers.
The norms prescribed are minimum requirements which WSPs must comply with in conjunction with applicable norms laid down by WDRA or other government authorities.
Clearing Corporations may prescribe additional norms if deemed fit, provided they do not contravene the provisions of this Circular.
Clearing Corporations must ensure arrangements so that in case of WSP bankruptcy, owners/depositors can take possession of their individually identified commodities without restriction.
This Circular supersedes earlier circulars dated September 27, 2016, October 16, 2018, and February 11, 2019, requiring Clearing Corporations to frame guidelines per revised norms.
The Circular aims to bring uniformity in requirements for agricultural/agri-processed commodities and base/industrial metals.
The norms laid down in this Circular shall come into effect from June 01, 2021.
Stock exchanges and Clearing Corporations are advised to disseminate provisions on websites, communicate implementation status in Monthly Development Reports, and amend bye-laws/rules.
This Circular is issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992.
The Clearing Corporation shall publish open advertisements in leading newspapers and/or put up the same on their website and follow transparent selection process thereafter.
The Clearing Corporation shall ensure that the WSP had obtained the required registrations of the proposed storage facility from WDRA for commodities notified by WDRA and for other commodities under applicable law/s.
You have read the preview. Create a free account to read the full document and see every order that applied it.
Free accounts include 10 searches/day with full text access.
Source: SecMarx — Guidelines for warehousing norms for agricultural/agri-processed goods and non-agricultural goods (only base/industrial metals) underlying a commodity derivatives contract having the feature of physical delivery. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.