The Hindu Business Line : NCDEX completes first demat delivery

THE National Commodity & Derivatives Exchange Ltd (NCDEX) has successfully facilitated the first settlement of trade in demat form for commodities on February 24.

NCDEX is the first to pioneer the concept of delivery of commodities through the demat mode.

For this purpose, NCDEX has entered into agreement with National Securities Depository Ltd (NSDL) and Karvy Consultants Ltd, who are its registrars.

On the expiry of the futures contract on February 20, NCDEX had matched instructions for delivery.

"The electronic delivery of commodities, being a trail blazer in commodity market, marks a major milestone not only for NCDEX but to the entire country.

The successful completion of this delivery in commodities at our exchange proves that the novel experiment, which we initiated in the country and for the first time perhaps in the entire world, will strengthen the exchange in its delivery processes," said Mr P.H. Ravikumar, Managing Director of NCDEX.

Traditionally, matching of such delivery instructions are carried out through exchange of warehouse receipts.

But on NCDEX platform, the delivery was effected through the demat process, which is essentially an electronic mode of settlement.

The process involved debiting the commodity demat account of the seller and crediting the demat account of the buyer for the delivery transaction.

"The Indian commodity market is globally connected given the direct correlation between international market movements in commodity prices and local prices.

The evening session, overlapping with the trading hours of important commodity exchanges in Europe and the US would enable our trading members to take advantage of this relationship and avail of the best prices across exchanges," added Mr Ravikumar.