NCDEX unveils hedge policy for commodity markets

National Commodity & Derivatives Exchange Ltd (NCDEX), the leading commodity exchange on Friday said it is introducing a comprehensive hedge policy for the commodity markets.

The policy has been designed with the objective of making risk management more easier, simpler and 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.

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.