National Commodity & Derivatives Exchange Ltd (NCDEX) on 25 July 2014 announced introducing a comprehensive hedge policy for the commodity markets.
Objectives of the Policy
The NCDEX explained that the policy has been designed with the objective of making risk management easier, simpler and accessible for commodity businesses.
Benefits of the new Policy
The policy has widened the eligibility criteria for bonafide hedgers and has simplified processes and documentation for availing hedge limits on the Exchange platform. With expanded eligibility criteria, the documentation has also been further simplified.
About the Policy
The policy also special additions like hedging for related products of commodity, same commodity but different contracts, cross hedging in upstream, downstream commodity and related commodity having a very high correlation arising out of the similar degree of effect.
About the National Commodity & Derivatives Exchange Ltd
- The National Commodity & Derivatives Exchange Limited (NCDEX) is primarily the multi commodity exchange in India. The shareholders include national level institutions, companies and large public sector banks.
- It is important to note that this is the only commodity exchange in India which is promoted by the institutions at national level.
- NCDEX is public limited company and was incorporated on 23 April 2003 under the Companies Act, 1956. The operations of NCDEX began on 15 December 2003.
- The commodity exchange is regulated by the Forward Markets Commission.
- It remains subjected to various laws which include Stamp Act, Contract Act, Companies Act and Forward Contracts (Regulation) Act apart from various other legislations.
- The headquarters of National Commodity & Derivatives Exchange Limited are located in Mumbai and the facilities are offered through the centers located Pan India.
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