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Settlement Processes - Physical

Derivatives Clearing

Settlement Processes - Physical

  1. Seller wishing to have CPO/PKO/POL appraised for delivery to the market must deliver the CPO/PKO/POL to an approved Port Tank Installation located at one of the delivery points.

  2. The PTI will conduct an appraisal on the quantity and quality of the CPO/PKO/POL. Once the PTI is satisfied that the oil has met the requirements, the PTI will enter the Electronic Negotiable Storage Receipt (e-NSR) details into DCS (Derivatives Clearing & Settlement System) and a reference number will be generated by the system for seller.

    The details of the system indicate the following:

    • Name and Location of Port Tank Installation Owner
    • Date of appraisal
    • Certification of quality of oil
    • Validity date of the e-NSR
  3. Clearing Participants with short positions may submit Tender Notification via the DCS for the delivery of CPO/PKO/POL during the tender period (1st – 20th of spot month). The reference number provided by the seller must be entered into the DCS to validate the e-NSR information. Tender Notification must be submitted to the Clearing House by 12.00 p.m. for same day processing.

  4. Based on the number of Tenders Notification received, the Clearing House will allocate the e-NSR to the respective buying Clearing Participants on a proportionate basis (based on number of open positions) and then further allocate the e-NSR on a random basis at the client’s level.

  5. The Clearing House will broadcast the delivery allocation message and transmit the report electronically latest by 4.00 p.m.

    The tender fee will be posted to the seller’s account at the end of day process (EOD) on tender day (T day).

    Tender amount will be credited to seller’s account at the end of day of T+1 day.

  1. The tender fee and performance bond will be posted to buyer’s account at the EOD on T day. Tender amount will be debited from buyer account at the end of day of T+1. Clearing broker will collect payment from the client.

  2. On T+2 the Clearing Broker will settle the delivery amount with Clearing House. The e-NSR ownership will be transferred to buying client upon receipt of payment.

    The buying Clearing Broker will be given another reference number together with the Advice of Delivery which is to be forwarded to the buying client for collection of oil from the Port Tank Installation owner (PTI).

  3. Collection of oil from PTI by buying client.