Settlement mode for commodity derivatives: physical delivery favored; cash settlement allowed only with impracticability or reliable benchmark price. Primary settlement preference for commodity derivatives is physical delivery; cash settlement is allowable only where physical delivery is impracticable (intangible or perishable commodities, or inadequate storage/transport) or where a reliable, exchange vetted benchmark spot price exists. Exchanges may list both settlement types for the same commodity if they facilitate different price discovery and must amend rules and notify market participants accordingly.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Settlement mode for commodity derivatives: physical delivery favored; cash settlement allowed only with impracticability or reliable benchmark price.
Primary settlement preference for commodity derivatives is physical delivery; cash settlement is allowable only where physical delivery is impracticable (intangible or perishable commodities, or inadequate storage/transport) or where a reliable, exchange vetted benchmark spot price exists. Exchanges may list both settlement types for the same commodity if they facilitate different price discovery and must amend rules and notify market participants accordingly.
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