NCCE organizes Physicals Purchase and Sale Trade. Buyers and sellers can sell or buy commodities through NCCE electronic trading system, generate electronic purchase and sale contracts and perform the contracts. Traders can apply for delaying performance of contracts but must pay the compensation costs. The elements of Physicals Purchase and Sale Trade includes: trade account; name and quantity of commodity; price; delivery place, time, terms; quality standard; unit of measurement; payment method and so on. NCCE Commodity Quotation means the commodity delivery price designated in the contract. NCCE implements commodity price risk management to restrict the caps and collars. NCCE has the right to adjust the price limits of different commodities according the market risk. Price range and the minimum quantity of trade shall be executed according to the electronic purchase and sale contracts of specific commodities. The quotation is effective only in one trading day and it can be revoked in the trade session if the quotation had not clinched a deal. Revocation is only valid to the unsettled part of the original quotation. If all clinched deals by the original quotation, revocation is invalid. During the trading suspension, NCCE electronic trade system will not accept any quotation or quotation revocation. NCCE implements margin system. Margin can be divided into order margin and delivery performance margin. Margin charge standard is subject to related policies and regulations. (A) Order margin is the frozen capital in the trade account to a certain proportion according to the value of the settled commodities by the contracts. Order Margin is used to prevent the risk of market price fluctuations. (B) Delivery performance margin is the frozen capital in the trade account to a certain proportion according to the value of the commodities which planned to delivery in the contracts. Delivery performance margin is used to prevent the risk of traders breaking contracts. (C) Margin charge proportion of different commodities shall be subject to related electronic purchase and sale contracts. NCCE has the right to adjust the margin proportion according to the market. Trade procedures: (A) There must be enough capital in traders' accounts before they trade. (B) The instruction Buy or Sale of the trade system will be executed according to the principle of "price priority and time preference". (C) After the trade, the system will automatically generate electronic purchase and sale contracts then send the results to traders' terminals. (D) Those unsettled part of purchase or sale quantities can be revoked or continually participate in the electronic trading on that day. (E) Electronic trade system will automatically proceed real time calculation for traders' capital according to the trading results. If the capital is not sufficient, the trade system will not accept new sale or purchase orders of purchase and sale. (F) Unsettled order will be invalid automatically after the trade is over on that trading day. (G) Once a trader makes electronic purchase and sale contracts via NCCE electronic trade system, it means he has already agreed with the opposite side of the contract transferring his rights and obligations in the contracts. The profit and loss of the contract transfer shall be borne by the transferor. In order to promote the physical delivery, NCCE segmentally restricts traders' delaying performance of purchase or sale contracts and segmentally charges for time exceeded management fee. For those who exceeds the longest deadline, NCCE will forcibly implement transfer. All the resulting losses shall be borne by the traders. Time exceeded management fee calculation formula: Daily time exceeded management fee=Time exceeded quantity of purchase or sale contract * current settlement price * time exceeded management fee rate The segmental time limits of delaying contracts performance and time exceeded management fee rates shall be executed according to NCCE regulations. Traders shall pay the handling charges to NCCE after they clinch deals according to the standard of the purchase and sale contracts. NCCE will safely store physical trading, settlement and delivery information for more than 5 years. |
