Delivery Documentation- ASX 24 Greasy Wool Futures October 2010

AWEX Appraisal Certificates

Using this Guide

• This guide explains the AWEX Appraisal Certificate.

• Key subjects covered include– Delivery Documentation– The Delivery Period– The Delivery Cycle– AWEX Appraisal– AWEX Appraisal Request– AWEX Certification Deadlines– AWEX Appraisal Certificate Example– ASX and AWEX Contact Details

Delivery Documentation

• Sellers holding open positions in a Greasy Wool Contract at expiry must have the wool physically stored in an ASX Approved Warehouse.

• To effect delivery against an open short position there are three sets of documents that need to be submitted by the Seller to their Clearing Participant, who in turn submits them to ASX Clear (Futures). They are;– AWTA Test Certificates (original),– AWEX Appraisal Certificates (original), and– Warehouse Receipts (issued by the Approved Warehouse once the

above documents are sighted).

Detailed explanations of the other documents can be accessed by clicking on the links.

http://www.asx.com.au/products/futures/wool/delivery_information/approved_warehouses.htmhttp://www.asx.com.au/products/pdf/gw_del_doc_awta_test_certificates.pdfhttp://www.asx.com.au/products/pdf/gw_del_doc_warehouse_receipt.pdf

The Delivery Period

• Greasy Wool Futures contracts expire on the third Thursday of the contract month at 12pm.

• The delivery period for the contract commences on the Friday prior to the third Thursday of the contract month. If that Friday does not fall on a business day, the delivery period will commence on the business day immediately preceding that Friday.

• Trading in the contract continues each day during the delivery period. Sellers can decide to tender (deliver) against a sold contract on any day during this period.

The Delivery Cycle

Seller Seller’s Clearing Participant

Buyer’s Clearing ParticipantBuyer

Approved Warehouse

Original Delivery

Documents

AWEX Appraisal

• The AWEX Appraisal Certificate is based on a visual appraisal of the wool sample provided for inspection at an AWEX registered show floor.

• The purpose of the appraisal is to check the non-measurable characteristics of the wool and ascertain whether the wool is Good Style or better (Style 5).

• An AWEX appraisal must have been undertaken no more than one year prior to the wool being delivered to deliverable stock with ASX Clear (Futures).

• Once accepted by ASX Clear (Futures) and in deliverable stock, the wool has a deliverable life of up to 24 months exclusive of the month in which the wool was initially sampled. For example, if a deliverable parcel was sampled, tested and admitted to deliverable stock in March 2009, the wool may remain in deliverable stock for two years. If the wool was sampled and tested in March 2009, but not admitted to deliverable stock until March 2010, the wool could remain in deliverable stock for one year.

• The Approved Warehouse issuing the Warehouse Receipt will need to sight both the AWEX and AWTA documents prior to creating the Warehouse Receipt.

• Requests for AWEX to issue their Appraisal Certificate should only be made once the wool is stored in the Approved Warehouse where delivery is intended to be made. For example, where stock has previously resided at another warehouse, AWEX will need to be notified by the owner of the wool (the seller of the futures contract) and the Approved Warehouse confirming the new location for the wool so this is accurately recorded on the AWEX Appraisal Certificate.

• Wool may be appraised for compliance by AWEX by one of two methods.

– Audited Results – wool offered in an AWEX managed auction is audited by AWEX appraisers. The details of the audit can be obtained pre or post sale by subscribing to the AWEX ASX/ASX 24 Eligible Lots – Non Measured Wool Characteristics Report on a daily basis. For more details about this report, please contact AWEX on (02) 9428 6100.

– Specific ASX 24 Compliance Appraisal – if your wool has not been offered for sale or is being sold by private sale, you can submit a request to AWEX for an appraisal to be performed on your wool. Make sure you are aware of the deadlines for requesting appraisals (see next slide).

• If the seller’s wool meets the required standards set for the futures contract the seller will need to request an AWEX Appraisal Certificate for the deliverable lot.

AWEX Appraisal Request

http://www.awex.com.au/standards/futures-certification.html

AWEX Certification Deadlines

• Each delivery period, deadlines are issued for AWEX Appraisal and Certificate Requests, which can also be found on the AWEX website.

• The request for Appraisal of Wool and the Request for Appraisal Certificates must be received by AWEX by the dates shown.

• All wool must be held in an ASX Approved Warehouse and (if a specific ASX 24 approval is required) samples must be ready for appraisal at the time that the request is made.

– Northern Region: Samples to be presented for appraisal in Sydney– Southern Region: Samples to be presented for appraisal in Melbourne– Western Region: Samples to be presented for appraisal in Fremantle

• On the following slide is an example of the AWEX Certification Deadlines, which include both Appraisal Request and Certification Request for the October 2010 Greasy Wool Futures Contract. The Greasy Wool contract has a five day delivery period which concludes on the third Thursday of the delivery month. The contract expiry date in the example is Thursday 21 October 2010.

http://www.asx.com.au/products/pdf/awex_asx24_wool_cert_deadline.pdfhttp://www.awex.com.au/standards/futures-certification.html

AWEX Certification Deadlines

AWEX Wool Appraisal Certificate

AWEX Appraisal Certificate Checklist

Description Acceptable Parameters

OM Test Certificate Number/s

= IWTO Test Certificate number/s(Individual, not combined)

Warehouse ID = Warehouse Receipt“Approved Warehouse ID”

Approved Warehouse

= Warehouse Receipt“Approved Warehouse Name”

Appraisal Date Less than 1 year prior to admittance

Colour and Style Style 5 (Good Style)

Further information

www.asx.com.au/woolfutures

woolfutures@asx.com.au

Dougal HunterManagerAgricultural DerivativesASX Limited

Office: +61 2 9227 0197

Contract Specifications

Delivery Information

AWEX Wool Services

If you require further information please contact AWEX Wool Services or your AWEX Regional Manager.

Phone: +61 2 9428 6140Fax: +61 2 9420 9633Email: info@awex.com.au

http://www.asx.com.au/woolfuturesmailto:woolfutures@asx.com.auhttp://www.asx.com.au/products/futures/wool/contract_specifications/index.htmhttp://www.asx.com.au/products/futures/wool/delivery_information/index.htmmailto:info@awex.com.au?subject=AWEX%20Appraisal%20Certificatemailto:info@awex.com.au

Disclaimer

This material contains information only. The information is for education purposes only and any advice should be sought from a professional adviser. If you are seeking advice (including a recommendation or opinion) about a financial product you should consult an Australian Financial Services Licensee.

To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) suffered by anyone acting or refraining from acting as a result of this material is accepted by ASX. This disclaimer extends to any private discussions or correspondence with the presenter of this information.

This document is a guide only. If any discrepancy exists between the document and either the Deed for Approved Warehouse or the Operating Rules for ASX 24 and ASX Clear (Futures), the Deed and Operating Rules prevail.

© 2010 ASX Limited ABN 98 008 624 691

AWEX Appraisal CertificatesUsing this GuideDelivery DocumentationThe Delivery PeriodThe Delivery CycleAWEX AppraisalAWEX Appraisal RequestAWEX Certification DeadlinesAWEX Certification DeadlinesAWEX Wool Appraisal CertificateAWEX Appraisal Certificate ChecklistFurther informationDisclaimer