Staggered Delivery Period in Commodity futures contracts
Summary
This circular establishes revised norms for the staggered delivery period in commodity futures contracts to ensure uniformity across recognized stock exchanges. It defines the staggered delivery period as a minimum five-working-day window prior to expiry where market participants can submit delivery intentions. Exchanges are mandated to implement these changes in all relevant contracts expiring after three months from the circular's date.
Text
Staggered delivery period is the period, beginning few working days prior to expiry of any contract and ending with expiry, during which sellers/buyers having open position may submit an intention to give/take delivery.
All compulsory delivery commodity futures contracts (agriculture commodities as well as non-agriculture commodities) shall have a staggered delivery period.
The minimum duration of staggered delivery period shall be at least five working days.
Exchanges shall have the flexibility to set higher duration... all the exchanges shall jointly prepare and publish a detailed framework outlining various circumstances and factors which would generally require longer duration...
SEBI or exchange may exercise its due discretion in modifying the aforesaid staggered delivery period at any time.
Seller/buyer having open position shall have an option... Exchange shall allocate intentions received to give delivery... to buyers having open long position as per random allocation methodology... Pay-in and pay-out for the allocated deliveries shall happen within 2 working days after allocation.
Exchanges shall start imposing pre-expiry margin (as prescribed vide SEBI circular CIR/CDMRD/DRMP/01/2015 dated October 01, 2015) latest by the start of the staggered delivery period.
To comply with the provisions of this circular, Exchanges shall appropriately modify the contract specifications (if required) and implement the changes in all contracts (whether running or yet to be launched) expiring after three months from the date of this circular.
Exchanges are advised to: i. to make necessary amendments to the relevant bye-laws, rules and regulations. ii. bring the provisions of this circular to the notice of the stock brokers... iii. communicate to SEBI, the status of the implementation...
Source: SecMarx — Staggered Delivery Period in Commodity futures contracts. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.