 "NCDEX introduces hedge policy for commodity markets")
The policy has been designed with the objective of making risk management easier, simpler and more accessible for commodity businesses. It has widened the eligibility criteria for bonafide hedgers and has simplified processes and documentation for availing hedge limits on the Exchange platform, NCDEX said in a statement here.
The policy clearly articulates who can qualify as a bonafide hedger, types of risks related for a hedger, etc. With an expanded eligibility criteria, the documentation has also been further simplified, it said.
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The policy also includes 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.
"Risk management is a key economic function of the exchange and we are committed to encouraging businesses to make risk management an important component of their business strategy. This is a benchmark policy for the commodity markets and we are hopeful it will make risk management more accessible and simple for the value chain participants," NCDEX MD and CEO Samir Shah said.