What is the Alternative Delivery Procedure (ADP)?
The Alternative Delivery Procedure (ADP) is an offline delivery mechanism where bilateral agreement between exchange and parties that wish to take and make the delivery off and to the exchange.
Once the client enters into a contract and after the completion of the matching process, counterparties may agree to make and take delivery under terms and conditions of the exchange. If both counterparties agree on contract terms, they can declare an ADP.
To enter into a contract with the Exchange the client needs to deposit the margin and upon confirmation of the price and the buyer books the contract. And after the clearing and settlement process is done the buyer can take the delivery off the exchange.
Any seller willing to make delivery also can enter into the agreement and after the completion of the matching process; counterparties may agree to make delivery under terms and conditions of the exchange.
Who can enter into ADP?
Any individual, financial institution, bank, co-operative or institution willing to take and make delivery can enter into an ADP.
What is the cost of an ADP?
The exchange does not charge any fees for an ADP. The ADP is a bilateral agreement between the two matched counterparties and the exchange does not control if one side wishes to charge the other a fee for agreeing to ADP.
How do I submit an ADP?
Both counterparties notify the WEX and the clearing member by email. Once the party deposits the margin and once the clearing member confirm then the party enters into Delivery System of the ADP.
What are the regulatory requirements relating to ADP?
Participants must notify WEX and Clearing directly. Unless ADP is confirmed by Clearing, both counterparties have to fulfill their commitments under the Rules and guidelines of WEX.
I have chosen to ADP. When will I get delivery?
Once the ADP contract is done and the settlement is done the customers can get the delivery (defined as a day during which Clearing is open for business), but this may vary depending on the time the ADP was formally submitted.