10.1	An FMI’s rules should clearly state its obligations with respect to the delivery of physical instruments or commodities.
The Clearing Rules and respective Contract Specifications set out the delivery mechanisms and the respective obligations of APEX Clear and all participants in a delivery process. Example: APEX RBD Palm Olein Futures Contract (“Palm Olein Contract”) In this physically delivered contract, APEX Clear acts as a central counterparty and collects delivery margins, monitors each step of the delivery process, and facilitates the fulfilment towards a smooth delivery by the seller to the buyer. The Contract Specifications sets out clearly, amongst other things, the quality and quantity specifications of the cargo, the timelines for exchanges of notices between the buyer and seller, the readiness of vessel and loading times, the amount of delivery margins to be collected, the mechanism of dispute resolutions, and the amount of compensation should there be a delivery default. Under the Contract Specifications, any successfully matched seller or buyer have the option to elect an Alternative Delivery Procedure (“ADP”), by which both parties agree bilaterally to diligently fulfil their respective delivery obligations without the involvement of APEX Clear. The seller and buyer will manage these deliveries themselves directly under any terms and conditions that they have negotiated otherwise. In choosing the ADP delivery process, the seller and buyer indemnifies APEX Clear from all obligations and responsibilities related to such delivery under the Contract Specifications. If the buyer and seller chooses to execute an Exchange of Futures for Physical (“EFP”) procedure, APEX Clear shall be released from the obligations in relation to delivery under the Contract Specifications and the Rules, and the Seller and the Buyer as may be prescribed shall jointly and severally indemnify the Clearing House against any liability, costs, or expenses that may incur for any reason as a result of the execution, delivery, or performance of any agreement reached between the Buyer and the Seller.
10.2	An FMI should identify, monitor, and manage the risks and costs associated with the storage and delivery of physical instruments or commodities.
In designing the delivery process, APEX Clear will take into consideration the various risks and costs associated with the physical storage and delivery of the commodities. To manage the costs involved in the delivery process, APEX Clear seeks to reduce the costs borne by the participants by taking into consideration additional factors in the matching process of buyers and sellers, besides the quantity so as to achieve a minimum systematic delivery costs for the delivery processes. Additionally, APEX Clear conducts product seminars and closely guide our Clearing Members who are involved in the physical delivery process. Example: APEX RBD Palm Olein Futures Contract (“Palm Olein Contract”) Under the Contract Specifications for Palm Olein Contract, APEX Clear does not bear the risk and cost associated with the storage or delivery of the commodity as the underlying is delivered in free-on-board terms. Any risks and costs in relation to storage or handling of oil before the oil passing the manifold of Buyer’s vessel is borne by the Seller, while any subsequent risks and costs shall be borne by the Buyer. To manage the risks involved in the delivery process, APEX Clear, after careful assessments and selection, has provided a list of accredited Port Tank Installations, Approved Refinery Delivery Points, Approved Suppliers, Approved Surveyors so as to ensure reliable supplies of products and continuously monitored handling processes. Meanwhile, the mechanisms to