National Cotton Trading Market: Trial implementation of commodity cotton basis trading

Notice of the National Cotton Trading Market on the trial implementation of commodity cotton basis trading (No. 18, 2022)

Each dealer:

In order to better promote commodity cotton trading and standardize contract performance, give full play to the platform advantages of the National Cotton Trading Market (hereinafter referred to as the trading market), and meet the needs of traders for period-to-cash linkage in the current trade pricing link, the trading market has decided to conduct trial trading of commodity cotton basis in the near future. . The relevant matters are now notified as follows:

1. Transaction time and login method

Starting from December 8, 2022, traders can log in to the “warehouse receipt trading system” (hereinafter Referred to as the trading system) participates in basis trading. Specific trading hours are from Monday to Friday from 9:00 to 10:10 a.m., 10:30 to 11:25 p.m., and from 1:30 p.m. to 2:55 p.m. (excluding statutory holidays).

2. Transaction methods

Commodity cotton basis trading means that the seller quotes and displays commodity cotton warehouse receipts (listing) through the trading system in the form of basis. The buyer chooses to confirm the quotation or counter-offer (delisting) as needed, and the basis is determined through negotiation between the buyer and the seller and the corresponding futures transaction is completed. Price, the trading system automatically confirms the transaction after the futures price is lower than the transaction price. After the transaction is completed, the buyer and seller sign a purchase and sale contract based on the “basis difference + futures contract transaction price” reached by the trading system. The trading market is responsible for witnessing the contract, and carries out payment settlement and commodity cotton delivery within the time limit stipulated in the contract.

In order to meet the needs of traders for different transaction methods and promote the connection between production and sales. In addition to the basis trading method, the trading system also allows the seller to quote and display commodity cotton warehouse receipts based on a “fixed price” (fixed price) method. After the buyer and seller agree on the price, a purchase and sale contract is signed at a fixed price, and the trading market is responsible for witnessing the contract. , and carry out payment settlement and commodity cotton delivery within the time limit stipulated in the contract.

3. Transaction Process

(1) The seller submits the basis quotation or “fixed price” quotation, quotation validity period, remarks and other information for the cotton warehouse receipt of the commodity for sale through the trading system. The seller bears economic and legal responsibility for the authenticity, legality and validity of the information it submits.

(2) The trading market will verify the warehouse receipt and remark information submitted by the seller, and only after verification is correct can it be listed for trading.

(3) After the market opens, the buyer selects the seller’s warehouse receipt as needed and makes a quotation. The trading system will push the buyer’s quotation to the seller for confirmation. The buyer can withdraw the quotation before the seller confirms it.

If the quotation is based on basis difference, the buyer can confirm the basis difference or make a counter-offer to the basis difference through the trading system, and at the same time quote the futures contract transaction price.

If a “fixed price” quotation is adopted, the buyer can confirm the “fixed price” quotation or counter-offer through the trading system.

(4) After receiving the buyer’s quotation pushed by the trading system, the seller can choose to accept or reject it.

(5) If the basis price is quoted, after the seller confirms the buyer’s quotation, the transaction will be completed when the futures market is lower than the transaction price of the corresponding futures contract, or the seller will confirm the transaction directly through the trading system at the transaction price of the buyer’s corresponding futures contract. If a “fixed price” quotation is adopted, the seller will directly conclude the transaction after confirming the buyer’s quotation.

(6) If there is no buyer’s quotation during the trading time, the seller can cancel the quotation; when the seller has confirmed the buyer’s quotation but has not yet completed the transaction, if the seller or the buyer cancels the quotation, a cancellation notice must be sent to the other party through the trading system. The other party has confirmed receipt or the notification has been issued more than five minutes and no transaction is completed during this period, the quotation will be cancelled.

(7) After the market closes, the trading market will generate the “National Cotton Trading Market Commodity Cotton Basis Trading Purchase and Sales Contract” (hereinafter referred to as the “Purchase and Sales Contract”) based on the price confirmed by the buyer and seller through the trading system for the transaction warehouse receipts. Please see Appendix 1 for details. . After the buyer and seller sign the Purchase and Sales Contract through the trading system, the trading market is responsible for witnessing the contract.

4. Margin and fees

(1) Margin: When a dealer quotes through the trading system, the trading market freezes the corresponding transaction margin at a standard of 1,000 yuan/ton. If the trading margin freeze standard is adjusted, the trading market will announce it in the form of a notice in advance.

Buyers and sellers can apply to the trading market in advance to use the warehouse receipts in the warehouse to offset the transaction margin, or deposit the margin into a designated account in the trading market:

Recipient: Beijing National Cotton Trading Market Group Co., Ltd.

Account opening bank: Agricultural Bank of China Co., Ltd. Beijing Fuxingmen Branch

Account number: 11021001040009642

(2) Handling fee: After the transaction is completed, the trading market will charge the buyer and seller a transaction fee of 5 yuan/ton respectively; the buyer and seller will be charged a delivery fee of 10 yuan/ton respectively. During the trial period of basis trading, transaction fees and delivery fees for buyers and sellers will not be charged for the time being.

5. Delivery process

(1) Within 2 working days after the transaction (including the day of transaction), the buyer and seller must sign a purchase and sale agreement through the trading systemAt the same time, the trading market handles contract witnessing, otherwise the party that has not signed the contract will be deemed to have breached the contract.

(2) After the transaction is completed, the buyer and the seller can choose to entrust the trading market for delivery. That is to say, the change of goods rights in the commodity cotton warehouse receipt and the payment settlement are handled at the specified or agreed time and place. Within 3 working days after the transaction is completed (including the day of the transaction), the buyer must remit the full payment to the account designated in the “Purchase and Sales Contract” (subject to the actual arrival of the remittance or the receipt of a fax of the bottom copy of the remittance), otherwise, it will be deemed as Buyer defaults.

After the buyer and seller reach an agreement, they can handle the delivery themselves. The trading market is not responsible for the transfer of commodity cotton rights and payment. When handling delivery on their own, both parties must notify the trading market. Within 3 working days after the transaction is completed (including the day of the transaction), the buyer must remit the payment to the seller’s designated account, and both parties will transfer the rights to the goods themselves.

Unless the buyer and the seller agree otherwise on the time of change of payment and rights of goods, the party that is unable to perform the contract shall bear the corresponding liability for breach of contract.

(3) When delivering in the entrusted trading market, the trading market will pay 90% of the payment amount to the seller within 1 working day after receiving the buyer’s payment, and at the same time release the transaction margin of the buyer and the seller or release the credit warehouse receipt. In the case of self-delivery, the seller and buyer handle the change of goods rights and payment settlement on their own.

(4) The buyer must inspect and accept the goods within 10 days after completing the change of goods rights. If the goods are exceeded within the specified time, it will be deemed that there is no objection to quality and weight.

(5) If the buyer has no objection to the quality and weight, the trading market will notify the seller to issue a full value-added tax invoice to the buyer. After the buyer receives the invoice, if the buyer entrusts the trading market to deliver the goods, the trading market will pay the remaining payment to the seller; if the buyer delivers the goods on his own, the trading market will release the corresponding transaction margin or release the credit warehouse receipt.

6. Other matters

For unfinished matters, please refer to the “National Cotton Exchange Market Trader Management Measures (2022 Edition)”, “National Cotton Exchange Market Commodity Cotton Trading and Delivery Measures (2022 Edition)”, “National Cotton Exchange Market Electronic Warehouse Receipt Management Measures (2022 Edition)” Annual Edition) and other relevant provisions or the terms agreed in the Purchase and Sales Contract shall be implemented.

Notice is hereby given.

National Cotton Trading Market

December 5, 2022

AAA

Disclaimer:

Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights and interests, please contact us and we will change or delete it as soon as possible.