COTTON MEET By - Girish Raipuria Senior Vice President 20 th December 2008 Compulsory Delivery based Electronic Spot Trading in Cotton

A National level Electronic Transparent institutionalized spot market. A market place where farmers, traders, corporates, processors and importers can sell and buy at the best possible and competitive rates. Provides counter party guarantee in respect of all trades. Provides services like quality certification, storage of goods and other customized value added services. With the launch of NSEL, the canvass of commodity trading would be complete – India has both spot and futures market available on electronic platform with national reach. National Spot Exchange – A Project

Features of NSEL Demutualised Exchange Capital Adequacy Norms for the Members Transparency in operations and decision making Dissemination of real time price and trade information Delivery based Market Settlement Guarantee Counter Party Risk Efficient clearing and settlement system Experience in handling commodity markets

Automated Trading NSEL introduces - - for the first time in India - automated screen based trading in commodities - resulting into compulsory delivery NSEL uses a modern, fully computerized trading system designed to offer the market participants - across the breadth and length of the country - a safe and easy way to trade in commodities NSEL trading system is called as ‘National Electronic Spot Trading’ (NEST) System.

An order driven trading system National reach Identity of the trader undisclosed Flexibility for placing orders Transparent, Objective and Fair system for automatic order matching Complete Online Market Information Price Ticker - flexible speed & customized portfolio Square-off facility NEST System

Connectivity for Market Access Secured access to Trader Workstation (TWS) through - –Very Small Aperture Terminal –Leased Line –Internet Mapping with reference to networking Unique Member ID and User ID Password of Member Admin terminal and Trader Workstation to be changed within 14 days.

Network Platform

Orders are first validated before acceptance. Orders are first numbered and time-stamped on receipt and then immediately processed for potential match. Orders are matched based on - - Price Time Priority - Best Buy and Best Sell If a match is not found, then orders remain in the system. Order Book

Market Timings Trading in the commodities takes place on all the days except Sunday and Exchange specified Holidays. Timings for the agri-commodities are: * Monday to Friday: am to 6.00 pm (till pm for other commodities) * Saturday: am to 2.00 pm

Trader Workstation The trader workstation (TWS) is the terminal by which a member accesses the trading system. Each trader has a unique identification for log- in. A member can have several user IDs allotted to him for accessing TWS concurrently. Daily Turnover limits for each User for normal market as well as for auction market. A member can set-up his network across the country.

Clearing and settlement Delivery both in physical and demat Delivery and pay in dates: –Gold and Silver: T + 1 –Agri commodities: T + 3 / T + 4…., commodity-specific, depending upon time lag in quality checking

NSEL Warehousing / Logistics Physical Delivery Seller Farmer Contract Farmer Importers Cooperatives Government On – Line Terminal Buyers Corporate Wholesalers Exporters Traders Government Trading (Bid / Ask) Matching Clearing House Clearing Bank Settlement Member/Broker On – Line Terminal Trading, Clearing and Settlement Mechanism – a Flow Chart

Desktop Monitoring – operational ease Efficient Warehousing and logistics support Transparency in transaction and settlement Timely disbursement of commodities and funds Guaranteed Trade with Weighment and Quality assurance Complete end-to-end solution Advantages of NSEL Platform

Transaction fee : Non delivery based transactions: Rs. 10 to Rs. 5 per lakh based on turnover slabs Storage charges: Rs. 2/- per bale per day Lesser cost of intermediation Advantage of NSEL Platform contd..

Thank You. National Spot Exchange Limited A, Landmark, Suren Road, Chakala, Andheri (East) Mumbai Tel: Fax: