5.1 Title Documents and Physical Delivery Procedures
5.1.1 Payment Against Title Documents
Each Trading Member shall cooperate with its sponsoring Clearing Member to enable each Clearing Member to effect delivery of Title Documents against payment as contemplated in the Clearing Rules and the relevant Contract Specifications. "Title Documents" refers to bills of lading, title certificates, endorsed warehouse receipts or any other equivalent documents evidencing title to the underlying Commodity and any other documents required to release payment, as contemplated in the relevant Contract Specifications.
5.1.2 Duty Of Members To Mitigate Risk Of Non-Delivery
Prior to the Last Trading Day, each Member shall require evidence from the respective Seller(s) or Buyer(s) having accounts on its books, that all Open Positions which will not be offset on the Last Trading Day shall be completed by delivery of the relevant underlying Commodity. If the Seller(s) or the Buyer(s) fails to provide such evidence, the Member shall, unless entitled to opt otherwise under the relevant Contract Specifications, liquidate the remaining Open Positions on or before the Last Trading Day. Unless otherwise permitted under the relevant Contract Specifications, each Member shall liquidate any and all Open Positions relating to lot sizes less than the minimum size prescribed under the relevant Contract Specifications for physical delivery.
5.1.3 No Financing of Performance Deposits or other Escrow Assets
No General Trading Member shall grant, whether directly or indirectly, any advance, loan or credit facilities to any Buyer or Seller for the purpose of posting Performance Deposits or other Escrow Assets (where applicable) to the Clearing House.
5.1.4 Delivery Obligations are Deemed Rules
Material terms relating to delivery obligations, including those pertaining to delivery dates, quality, quantity, location, acceptance notices or delivery notices as set forth in the relevant Contract Specifications, are deemed incorporated into this Rules by reference herein.
5.1.5 Delivery Default Deemed Rule Violation
To ensure the integrity of the delivery process as contemplated in this Rules and the Clearing Rules, a Member responsible for a Delivery Default is deemed to have committed a Rule Violation and may be subject to Sanctions as contemplated in Chapter 7 of this Rules.
5.1.6 Passing of Property and Risk
Property and risk in relation to an underlying Commodity under any deliverable Futures Contract shall pass in accordance with the provisions in the relevant Contract Specifications and, if not so dealt with, the provisions of the Sale of Goods Act 1979. For the avoidance of doubt, at no time shall property or risk in any underlying Commodity pass to the Exchange.
Amended on 18 January 2022.