Grading & Warehousing

LONDON INTERNATIONAL FINANCIAL FUTURES
AND OPTIONS EXCHANGE
Grading and Warehousekeeping Procedures in respect of

Cocoa and Robusta Coffee Futures Contracts
Issue Date: 18 May 2007

Effective Date: 18 May 20071
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London Notice No. 2892, issued on 18 May 2007, refers.
CONTENTS
Section A Introduction
Section B Interpretation
Section C Statements of Principle in respect of Warehousekeepers Nominated by

LIFFE for the Storage of Cocoa and Robusta Coffee
Section D Warehousekeeping Procedures in respect of Warehousekeepers and

Warehouses Nominated by LIFFE for the Storage of Cocoa and Robusta
Coffee
1. General
1.1 LIFFE Warehousekeeping Operations

1.2 Inspection of a Warehouse and Warehousekeeper
1.3 Grading and Tendering System (“GATS”)
1.4 Beneficial Interest
1.5 Supervision of sampling
1.6 Liability for Warehousekeepers and Supervision Companies
1.7 Criteria for Approval as a Warehousekeeper
1.8 Application to become a Warehousekeeper
1.9 Application to add a Warehouse
1.10 Annual Renewal of Nomination
1.11 Resignation
1.12 Insolvency
1.13 Termination of Nomination
1.14 Disciplinary Proceedings
1.15 Role and Responsibilities of a Warehousekeeper
1.16 Storage Requirements
1.17 Maintenance of Records
1.18 Stock Figures
1.19 Movement of Goods and change in control of a Warehouse or Warehousekeeper
- General requirements and Procedures
1.20 Change in control of Goods between different Warehousekeepers
- Goods remaining in the same Warehouse
1.21 Movement of Goods within the same Delivery Area
- Warehouses under the control of the same Warehousekeeper
1.22 Movement of Goods within the same Delivery Area for the purpose of
fumigation
1.23 Movement of Goods within the same Delivery Area
- Warehouses under the control of different Warehousekeepers
1.24 Movement of Goods across different Delivery Areas
- Warehouses under the control of the same or different Warehousekeepers
1.25 Insolvency or delisting of a Warehousekeeper causing movement or change in
control of Goods listed on GATS
1.26 Warehouse Charges
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2. Cocoa
2.1 Piling of Cocoa

2.2 Identification of a Delivery Unit
2.3 Weighing of a Delivery Unit
2.4 Sampling of a Parcel, Lot or Delivery Unit
2.5 Sampling of Cocoa stored in Bags
2.6 Sampling of Cocoa stored in Bulk
2.7 Submission of a Sample
2.8 Lotting Accounts
2.9 Fumigation and Fogging
2.10 Conversion or Formation of a Delivery Unit
2.11 Conversion of a Nominated Delivery Unit
2.12 Conversion of an Original Delivery Unit
2.13 Rebagging of Cocoa in Unsound or Damaged Bags
3. Robusta Coffee
3.1 Piling of Robusta Coffee

3.2 Identification of a Parcel or Lot
3.3 Weighing of a Parcel or Lot
3.4 Sampling of a Parcel or Lot
3.8 Rebagging of Robusta Coffee in Unsound or Damaged Bags
Section E Grading Procedures in respect of Cocoa and Robusta Coffee
1. General
1.1 LIFFE Grading Operations

1.2 Application and Qualification as a LIFFE Registered Grader
1.3 Conduct of Graders
1.4 Interested Parties
1.5 Termination of Registration as a Grader
1.6 Grading and Appeal Panels
1.7 Grading Appeals
1.8 Grading and Appeal Fees
1.9 Liability for Grading
1.10 Application for Grading or Regrading
1.11 Grading Process – General
2. Cocoa
2.1 General
2.2 Grading Process
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Schedule 1
A Goods stored on or after 1 August 2006
B Goods in store prior to 1 August 2006
C Cocoa stored as Large Delivery Units prior to 1 August 2006
D Goods in store prior to 1 August 2006. Marking of a bag on the bottom

layer of bags on each pallet.
E Goods in store prior to 1 August 2006. Procedures effective from 1

August 2009.
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Section A
Introduction
1. LIFFE Administration and Management, which administers the futures and

options market known as “The London International Financial Futures and
Options Exchange”, or “LIFFE”, is a Recognised Investment Exchange under
the Financial Services and Markets Act 2000. The Financial Services Act
2000 requires a Recognised Investment Exchange to ensure, inter alia, that its
Rules and practices will allow for business to be conducted in an orderly
manner on its market, and so as to afford proper protection to investors.
2. Pursuant to Rule 4.14.7, the Board may implement Procedures in relation to

any aspect of the organisation of, and conduct of business on, the market
which is not expressly dealt with in the Rules.
3. These Grading and Warehousekeeping Procedures prescribe in more detail the

Procedures which must be followed in respect of Cocoa and Robusta Coffee
Futures Contracts, as the case may be, and in respect of all Goods listed on
GATS, and have the same status with regard to enforceability as the Rules.
Goods listed on GATS shall mean the existence of a record in respect of a
Parcel, Lot or Delivery Unit on GATS. Where Goods are listed on GATS
these Procedures will apply whether or not the Owner contemplates the
delivery of such Goods against a Contract.
4. Authority to amend these Procedures has been delegated by the Board to the
Membership, Rules and Trading Committee. Any such amendments will be
published by London Notice.
5. These Procedures should be read in conjunction with the Rules and the
relevant contract terms and Administrative Procedures for the Cocoa or
Robusta Coffee Futures Contracts, as the case may be. In the event of a
conflict between a provision of these documents, the order of precedence shall
be: the Rules, the relevant contract terms and Administrative Procedures and
then these Procedures.
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Section B
Interpretation
1. Terms defined in the Rules and the relevant contract terms shall have the same
meaning in these Procedures, except where otherwise specified or defined in
Procedure B 2.
2. In these Procedures:
“Appeal Panel” means a minimum of three Graders selected in accordance

with Procedure E 1.6 from the list of LIFFE Registered Cocoa or Robusta
Coffee Graders, as the case may be, to grade a sample which is the subject of a
notice of appeal submitted to the Exchange in accordance with these
Procedures.
“bean cluster” means, in respect of the Cocoa Futures Contract, two (or more)
Cocoa beans which are joined together and which are unable to be split into
two (or more) whole single Cocoa beans as a result of the exertion of
reasonable hand pressure.
“block stow” means the storage of a fifty tonne pile of bagged Cocoa on a
single layer of pallets such that all sides of the stack are accessible for
sampling
“Charge period” means a period of six calendar months, commencing on the

first day of the fifth calendar month following any Reporting Day, being
January to June (in respect of the August Reporting Day) and July to
December (in respect of the February Reporting Day).
“contract terms” means the contract terms and Administrative Procedures of

the Cocoa Futures Contract or the Robusta Coffee Futures Contract, as the
case may be.
“Converted Delivery Unit” means a new Delivery Unit which is formed upon
the conversion of part or all of a Nominated Delivery Unit.
“Converted Original Delivery Unit” means a new Delivery Unit which is

formed upon the conversion of an Original Delivery Unit, and shall include,
unless the context otherwise requires, a Converted Delivery Unit.
“Delivery Unit” means a Standard Delivery Unit, a Large Delivery Unit or a

Bulk Delivery Unit. A Delivery Unit must comprise Cocoa of the same Origin
and Shipment Period.
“Dual Capacity Warehousekeeper” means a Warehousekeeper which has been

nominated by the Exchange in its absolute discretion to store in its Warehouse
parcels, lots or Standard, Large or Bulk Delivery Units listed on GATS and
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which appears on the List of Nominated Warehouses and Warehousekeepers

published from time to time by London Notice.
“Exchange” means LIFFE Administration and Management.
“Exchange official” means any employee of the Exchange.
“Fogging” means the application within a Warehouse of a chemical agent

designed to eradicate insect infestation either on or around the Parcels, Lots or
Delivery Units.
“Fumigation” means the use of either a chemical agent and/or a process

designed to eradicate insect infestation either on and/or within the Parcels,
Lots or Delivery Units.
“GATS” means the electronic grading, tender and delivery system, or any
successor thereto, administered by the Clearing House.
“Goods” means either Cocoa or Robusta Coffee.
“Grader” means a LIFFE Registered Cocoa or Robusta Coffee Grader, as the

case may be, registered with the Exchange in accordance with Procedure E
1.2.
“Grading Panel” means a minimum of three Graders selected in accordance

with Procedure E 1.6 from the list of LIFFE Registered Cocoa or Robusta
Coffee Graders, as the case may be, to grade a sample submitted to the
Exchange in accordance with these Procedures.
“Grading Room” means the LIFFE Grading Room.
“Grading Station” means the workbench where a Grading Panel or Appeal

Panel grade a sample of Cocoa or Robusta Coffee.
“London Agent” means a person acceptable to the Exchange who is authorised

by the appointing Warehousekeeper for the purposes of writing up rent
payments on Warrants, amendment of documents issued by the appointing
Warehousekeeper and for the service of process so that the Exchange and
Owners may rely upon the acts of such London Agent without further enquiry.
“LoU” means the Letter of Undertaking for a LIFFE Registered Cocoa or

Robusta Coffee Grader, as the case may be.
“Movement Out Charge” means the fee charged by a Warehousekeeper in

respect of the movement of a lot of Robusta Coffee (in bags) or a Delivery
Unit of Cocoa (in bags and/or in bulk) from within a Warehouse on to a truck
or lorry.
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“Nominated Delivery Unit” means each Delivery Unit to be converted by or

on behalf of the Seller as notified to the Clearing House under Cocoa Contract
Term 12.04(a) or (b).
“Original Delivery Unit” means a Delivery Unit which is converted into one
or more Converted Original Delivery Units, and shall include, unless the
context otherwise requires, a Nominated Delivery Unit in accordance with the
Cocoa contract terms.
“Owner” means the person entitled to the Goods where:
(a) he has the beneficial interest in the Goods; and/or
(b) he is the Warrant holder;
provided that, where the Warrant holder does not have the entire
beneficial interest in the Goods:
(i) where these Procedures confer a right on an Owner, such right

shall only be exercised where the person with such beneficial
interest and the person in possession of the relevant Warrant
both consent; and
(ii) where these Procedures confer an obligation upon an Owner, it

shall be for the Warehousekeeper to determine (in accordance
with the relevant agreement(s) between him and the Owner)
upon whom the obligation shall fall.
“Parcel” means, in respect of Robusta Coffee, all or any portion of a shipment

of Robusta Coffee of one Origin, ex one vessel, and which is stored in one
Warehouse.
“Preliminary sample” is the material initially drawn from the Parcel, Lot or
Delivery Unit.
“Published List of Rent and Movement Out Charges” means a list so titled and
published by the Exchange from time to time on the Euronext.liffe website
containing, by delivery area or port as applicable, details of the maximum
Rent and Movement Out Charges per tonne levied by Warehousekeepers in
respect of Robusta Coffee in bags and for Cocoa in both bags and/or in bulk.
“Quartering” is the process by which sample material is mixed thoroughly and

reduced by use of an appropriate riffle box or similar equipment so that the
resulting reduced material is proportionally the same in all aspects as the
original sample material. A “quartered sample” is a sample which has been
created by quartering.
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“Related Company” means a subsidiary or parent company or any subsidiary

or parent company thereof which form part of a group of companies.
“Rent” means a periodic fee (not including any other charges) which a
Warehousekeeper shall be entitled to charge in respect of the storage of a lot
of Robusta Coffee (in bags) or a Delivery Unit (either in bags and/or in bulk)
of Cocoa in a Warehouse and which is levied pursuant to the Grading and
Warehousekeeping Procedures.
“Reporting Day” means the last business day in February and August
respectively, being the day by which Warehousekeepers must inform the
Exchange in writing of, or any changes to, their maximum Rent and
Movement Out Charges in respect of each delivery area or port as applicable
for the next Charge Period following such Reporting Day,
“Rules” means the Rules of LIFFE.
“Senior Grader” means a Grader of sufficient knowledge and experience,

recognised as such by the Exchange in consultation with existing Senior
Graders and the Chairman of the LIFFE Registered Cocoa and Robusta Coffee
Graders, as the case may be.
“Single Capacity Warehousekeeper” means a Warehousekeeper which has

been nominated by the Exchange in its absolute discretion to store in its
Warehouse parcels, lots or Standard and Large Delivery Units listed on GATS
and which appears on the List of Nominated Warehouses and
Warehousekeepers published from time to time by London Notice.
“Supervision Company” is a company whose business is the supervision

and/or inspection of goods and which is nominated by the Exchange for the
purposes of performing inspections on behalf of the Exchange.
“Supervisor” is a person employed exclusively by a Supervision Company and

who is nominated by the Exchange to have sufficient experience and expertise
in the sampling of Cocoa and Robusta Coffee.
“Warrant holder” means, the person in possession of the relevant warrant.
“Warehouse” means a warehouse in respect of which a Warehousekeeper has

been nominated by the Exchange in its absolute discretion to store Goods
listed on GATS and which appears on the List of Nominated Warehouses and
Warehousekeepers published from time to time by London Notice. A
Warehouse shall, for the purposes of nomination under the Grading and
Warehousekeeping Procedures, be a single structure designed or modified for
the purpose of storing Goods, or groups of such structures connected by
internal doors allowing for the passage of the relevant Goods. Where there are
no such interconnecting doors between such structures these shall be
nominated as separate Warehouses.
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“Warehousekeeper” means either a Single or Dual Capacity Warehousekeeper

which has been nominated by the Exchange in its absolute discretion to store
in its Warehouse either parcels, lots, Standard and Large Delivery Units or
Standard, Large or Bulk Delivery Units, as the case may be, listed on GATS
and which appears on the List of Nominated Warehouses and
Warehousekeepers published from time to time by London Notice.
3. In these Procedures, a reference to:
(a) the singular includes the plural and vice versa (unless the context
otherwise requires);
(b) a time of day is a reference to the time in London, unless a contrary

indication appears;
(c) a Procedure, unless the context otherwise requires, is a reference to a

Procedure hereof as modified from time to time;
(d) a term, unless the context otherwise requires, is a reference to a term of

the relevant futures Contract as modified from time to time; and
(e) a Rule, unless the context otherwise requires, refers to a Rule of the
Exchange’s Rules as modified from time to time.
4. The headings in these Procedures do not affect their interpretation.
5. Any reference in these Procedures to a statutory provision includes a reference

to the statutory provision as modified or re-enacted or both from time to time
whether before or after the date these Procedures come into effect and any
subordinate legislation made or other thing done under the statutory provision
whether before or after the date these Procedures come into effect.
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Section C
Statements of Principle in respect of Warehousekeepers Nominated by

LIFFE for the Storage of Cocoa and Robusta Coffee
1. The following are a statement of the standards expected of a Warehousekeeper

nominated by the Exchange for the storage of Cocoa and Robusta Coffee.
These standards are not exhaustive of the standards expected. Observance of
these standards by a Warehousekeeper does not absolve a failure to observe
other requirements specified in these Procedures or elsewhere, furthermore
observance of such other requirements does not necessarily amount to
conformity with these Statements of Principle.
2. Failure to observe these standards may result in either, an instruction by the

Exchange for remedial action to be taken by the Warehousekeeper to ensure
observance and/or, disciplinary action being instigated.
3. A Warehousekeeper:
(a) shall at all times observe high standards of integrity and shall not
perform any actions which may disadvantage any current or potential
Owner of Goods stored within his Warehouse;
(b) shall observe high standards of conduct, complying with any

Procedures or requirements of the Exchange and any state or local
requirements that may be relevant to the storage of Cocoa and Robusta
Coffee in force at any particular time;
(c) should either avoid any conflict of interest or, where conflict arises,
should ensure fair treatment to any Owner of Goods stored within his
Warehouse;
(d) should ensure that it maintains adequate financial resources to provide

continuity in the provision of services for any current and potential
Owner of Goods stored within his Warehouse, and makes such other
financial provisions as may be prescribed by the Exchange from time
to time for the protection of any Owner’s interests;
(e) should ensure that all Goods stored for potential delivery against the
Cocoa or Robusta Coffee Futures Contract are properly segregated and
identified, and that proper action has been taken to protect such Goods
against potential risks to their security and integrity;
(f) should organise and control its internal affairs in a responsible manner,
keeping proper records, and should have adequate arrangements to
ensure that persons employed by the Warehousekeeper to perform
duties relating to the storage of Goods are suitable, adequately trained
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and properly supervised and that well-defined procedures exist for all
relevant duties; and
(g) shall deal with the Exchange in an open and co-operative manner and
keep the Exchange promptly informed of anything concerning the
Warehousekeeper or, Goods stored within his Warehouse which might
reasonably be expected to be disclosed to the Exchange.
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Section D
Warehousekeeping Procedures in Respect of Warehousekeepers and

Warehouses Nominated by LIFFE for the storage of Cocoa and Robusta
Coffee
1. GENERAL
1.1 LIFFE Warehousekeeping Operations
1.1.1 The warehousekeeping operations necessary to support the LIFFE Cocoa

Futures and Robusta Coffee Futures Contracts are supervised by the
Exchange’s Market Operations Department.
1.1.2 In respect of warehousekeeping operations, the Market Operations Department

is responsible for:
(a) listing or delisting Warehousekeepers on the Exchange’s List of

Nominated Warehousekeepers and Nominated Warehouses;
(b) the approval of a Warehouse;
(c) the publication of the List of Nominated Warehousekeepers and

Nominated Warehouses and the Published List of Rent and Movement
Out Charges;
(d) the inspection of the internal management controls and operating

procedures of Warehousekeepers and the inspection of related
Warehouses; and
(e) monitoring the compliance by Warehousekeepers and Members with

the Rules, the relevant contract terms, these Procedures and any other
such Procedures as may be issued by the Board from time to time.
1.2 Inspection of a Warehouse and Warehousekeeper
1.2.1 The Exchange operates an inspection programme in respect of which it aims to

inspect each Warehouse and Warehousekeeper on a regular basis.
1.2.2 In addition, a Warehouse or a Warehousekeeper may be inspected at any other

time, at the absolute discretion of the Exchange.
1.2.3 The inspection has five primary objectives:
(a) to satisfy the Exchange that a Warehouse is in good order and to verify
that any faults previously identified have been corrected;
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(b) to ensure that the storage of Goods for delivery against the Cocoa or
Robusta Coffee Futures Contract comply with the relevant contract
terms and these Procedures;
(c) to satisfy the Exchange that the Warehousekeeper has adequate

Procedures for the receipt, storage, sampling, weighing and delivery
out of Goods to ensure compliance with the relevant contract terms and
these Procedures;
(d) to verify that sufficient appropriate documentary records are properly

maintained by the Warehousekeeper to ensure an audit trail of the
history of the Goods can be constructed; and
(e) to verify that sufficient appropriate documentary records are properly

maintained by the Warehousekeeper in relation to Rent and Movement
Out Charges charged by the Warehousekeeper during any Charge
Period and to satisfy the Exchange that the Warehousekeeper is, or has
been, complying with Procedure D.1.26 in relation to the application
of those charges.
1.2.4 The inspectors shall be employees of the Exchange who it considers to be

properly qualified to conduct Warehouse inspections or, such other persons
appointed by the Exchange whom it considers to be properly qualified and
with no material or financial interest in any Warehousekeeper, or in Goods
stored by such Warehousekeeper.
1.2.5 The Exchange will give instructions to the Warehousekeeper in respect of the
rectification of any faults that are found and of any subsequent inspection
considered necessary.
1.2.6 Exchange inspectors have no obligation to inspect the condition, external or

otherwise, of Goods stored by the Warehousekeepers, nor to make their
findings known to the Owner of the Goods.
1.2.7 A Warehousekeeper shall allow representatives of the Exchange to inspect the

Warehouse (or premises that were previously nominated by the Exchange), its
facilities for the receipt and delivery of any Goods and the Warehousekeeper’s
records relating to the Warehouse and the Goods currently or previously
stored within it, and the records relating to the Rent and Movement Out
Charges levied by it during normal working hours. The Exchange may, at its
absolute discretion, make or request copies of any such records.
1.2.8 A Warehousekeeper shall allow the Owner to inspect the Goods referred to
therein during normal working hours.
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1.3 Grading and Tendering System (“GATS”)
1.3.1 A Warehousekeeper shall, where information is to be made available to or by

him via GATS, comply with the applicable procedures relating to the
operation and maintenance of that data system, such procedures being issued
by the Clearing House.
1.3.2 A Warehousekeeper shall ensure that a sufficient number of members of his

staff are competent in the operation of GATS or that he has arrangements in
place for the operation of GATS via a third party.
1.3.3 A Warehousekeeper shall ensure that all details relating to Goods held by him
in respect of GATS are correctly entered and, when necessary, updated
promptly. Such updates may include, without limitation, revised weights and
date of weighing, sampling details, revisions in respect of re-piling or
conversion of the Goods and removal of Parcels, Lots or Delivery Units from
the system following the removal of any part of a Parcel, Lot or Delivery Unit
from the Warehouse.
1.4 Beneficial Interest
1.4.1 If either the member or, if he is not the Owner of the Goods, the Owner on
whose behalf the member is making an application for grading under
Procedures D 2.4.1 or D 3.4.1, and E 1.10:
(a) has an interest of 5 per cent or more in the capital of;
(b) is a partner of; or
(c) has any other financial interest in,
the Warehousekeeper who issued the warrants in respect of the Parcel, Lot or
Delivery Unit, the member, or the Owner of the Goods, as the case may be,
shall inform the Warehousekeeper and the Exchange of that fact. Where the
Warehousekeeper has knowledge of any beneficial interest it shall be obliged
to inform the Exchange.
1.5 Supervision of Sampling
1.5.1 The Exchange may at its absolute discretion, supervise, or have supervised by
a Supervision Company the sampling of any Parcels, Lots or Delivery Units.
1.5.2 Following the notification of sampling under Procedures D 2.4.2 or D 3.4.2 the
Exchange may request a Supervision Company to appoint a Supervisor to
supervise the drawing (and if required quartering) and sealing of the sample at
the Exchange’s expense subject to the provisions of Procedure D 1.5.7.
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1.5.3 Where the Exchange has determined in accordance with Procedure D 1.5.2
that sampling notified under Procedures D 2.4.2 or D 3.4.2 will be supervised
and has notified the Warehousekeeper of such determination, the
Warehousekeeper shall provide the Exchange with information as requested
and in a form determined by the Exchange from time to time.
1.5.4 The Exchange will advise the Supervision Company and the Warehousekeeper
of the appointment and the Exchange reference number. The Exchange
reference number may be for Goods which are:
(a) stored on a specific Warrant, or
(b) stored on a number of Warrants or
(c) covered by one or more Bill(s) of Lading or similar document and are
due to be stored by the Warehousekeeper
1.5.5 The Warehousekeeper shall advise the Exchange and Supervision Company of
any changes to the details supplied in accordance with Procedure D 1.5.2 and
D 1.5.3 immediately upon the Warehousekeeper becoming aware of such
changes.
1.5.6 On occasions where the Exchange has advised the Warehousekeeper that
supervision of a sampling operation is to occur under these Procedures, the
Warehousekeeper shall allow Supervisors and/or Exchange officials, access to
the relevant Goods and documents for the purpose of supervising the
sampling.
1.5.7 When the Exchange appoints a Supervision Company to supervise sampling,

the sampling operation covering the sampling of Goods under a specific
Exchange reference number may only start in the Warehouse(s) during normal
Port or Delivery Area working hours. In the event that the Warehousekeeper
or Owner wishes to sample outside of normal Port or Delivery Area working
hours and subject to Procedures D 2.4.3 and D 3.4.3 any additional cost of
supervision incurred by the Exchange shall be for the account of the
Warehousekeeper.
1.5.8 The Exchange may, and at its sole discretion, specify the start time and date of
any sampling operation. If the Exchange specifies a start time and date for a
sampling operation which is outside of normal Port or Delivery Area working
hours, any additional costs incurred by the Warehousekeeper shall be for the
account of the Exchange.
1.5.9 In the event that the Supervisor is not in attendance at the specified time and
place, the Warehousekeeper shall immediately advise the Exchange and may
start sampling at the agreed time.
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1.6 Liability for Warehousekeepers and Supervision Companies
1.6.1 Without prejudice to any exclusion of liability provision in the Rules, neither
the Exchange nor the Board shall be liable for any loss or damage whatsoever,
whether for negligence, breach of contract, misrepresentation or otherwise, in
respect of:
(a) the performance or non-performance of a Warehousekeeper or

Supervision Company of his supervisory duties;
(b) the performance or non-performance by any Warehousekeeper of his

responsibilities under the Rules, the relevant contract terms or these
Procedures, or of any responsibilities he may assume towards members
or other parties pursuant to any receipt, Warrant or contract, nor for the
condition of a Warehouse or its suitability for the storage of Goods; or
(c) any failure by a Warehousekeeper to comply with its obligations

pursuant to Procedure D 1.26 (irrespective of whether or not the
Exchange or the Board has taken disciplinary or enforcement action
against a Warehousekeeper in respect of such failure).
1.6.2 Nothing in this provision shall operate to exclude or restrict the liability of the
Exchange or the Board for fraud or wilful default.
1.6.3 Parties placing Goods into a Warehouse or taking delivery of Goods in or from
such Warehouse shall accordingly have no claim against either the Board, the
Exchange, or any committee or employee thereof.
1.7 Criteria for Approval as a Warehousekeeper
1.7.1 For a Warehousekeeper to be approved as a Warehousekeeper and in order to

maintain that status, the Exchange must be satisfied that he:
(a) carries on business in a port or Delivery Area where Warehouses are

eligible for nomination under the relevant contract terms;
(b) is of sufficient business and financial standing, meets the financial

requirements prescribed by the Exchange from time to time and, with
effect from 1 April 2000, has in place a performance bond as
prescribed by the Exchange from time to time for the protection of an
Owner’s interests (or such other financial provisions as may be
prescribed by the Exchange from time to time). The Exchange may, at
any time, request information regarding the financial status of a
Warehousekeeper;
(c) has been, or is part of a Related Company that has been, a

Warehousekeeper for a reasonable period. A reasonable period will
usually be considered to be at least two years, with a minimum of one
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year’s experience of storing either Cocoa or Robusta Coffee or both, or

that the Warehousekeeper employs staff with such experience;
(d) has in place the necessary procedures and management controls to

ensure his compliance with the Rules, the relevant contract terms and
these Procedures for the classification of Warehousekeeper in respect
of which he is or is seeking to be nominated;
(e) shall organise and control his affairs in a responsible manner, keep
proper records, have well defined procedures for handling and storing
Cocoa and Robusta Coffee and ensure that his employees, contractors
or agents are suitable, adequately trained and properly supervised;
(f) has in place such insurance as shall be specified by the Exchange in its
absolute discretion from time to time;
(g) where applicable, is licensed to issue a Warrant for the delivery of

Goods to the bearer of the Warrant, by a National or State licensing
authority;
(h) has satisfactory communication and office facilities for the production
of Warrants, Lotting Account details and such other documents
relating to delivery;
(i) shall undertake to be connected to GATS, either directly or via a third

party, prior to taking Goods into store and piling them for potential
delivery against positions in the Cocoa or Robusta Coffee Futures
Contract, as the case may be;
(j) shall undertake to appoint a London agent where deemed necessary at

the absolute discretion of the Exchange; and
(k) satisfies any other requirements that the Exchange may prescribe from
time to time.
1.7.2 In respect of a Warehousekeeper who is, or who is seeking to be approved as a

Dual Capacity Warehousekeeper, in addition to the above, the Exchange must
also be satisfied that he:
(a) has, or is part of a Related Company that has, adequate experience of

the handling of bulk Cocoa, or that the Warehousekeeper employs staff
with such experience; and
(b) possesses or has access to equipment and bags to enable compliance

with the requirements of Procedure D 1.16.8.
1.7.3 Pursuant to Procedure D 1.7.1(e), a Warehousekeeper shall have appropriate

and detailed procedures to evaluate on a continuing basis the suitability of
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senior management, which for the purposes of this Procedure includes any
director, partner, sole practitioner, senior manager or any other individual
whose position enables them to assert a material influence over the
management of the Warehousekeeper’s operation. Such procedures shall
include, but are not limited to, an assessment against the criteria detailed
below:
(a) whether any such person has been convicted of any criminal offence.
Particular consideration should be given to offences of dishonesty, fraud,
financial crime or other offences relating to companies, insolvency,
money laundering, market manipulation or insider dealing;
(b) whether any such person has been the subject of an adverse finding or
any settlement in civil proceedings particularly in connection with the
formation or management of a body corporate;
(c) whether any such person has been the subject of, or has been interviewed
in the course of, any existing or previous investigation or disciplinary
proceedings by a regulatory authority, clearing house or exchange,
professional or trade body, or government body or agency;
(d) whether any such person has been the subject of any proceedings of a
disciplinary or criminal nature, or has been notified of any potential
proceedings or of any investigation which might lead to those
proceedings;
(e) whether any such person has been involved with a company, partnership
or other organisation that has been refused registration, authorisation,
membership or a licence to carry out a trade, business or profession, or
has had that registration, authorisation, membership or licence revoked,
withdrawn or terminated, or has been expelled by a regulatory or
government body;
(f) whether any such person has been a director, partner, or has been
concerned in the management, of a business that has gone into
insolvency, liquidation or administration while the person has been
connected with that organisation or within one year of that connection;
(g) whether any such person has been dismissed, or has been asked to resign
and resigned, from employment or from a position of trust, fiduciary
appointment or similar;
(h) whether any such person has ever been disqualified from acting as a
director or from acting in any managerial capacity; and
(i) whether any such person being an individual has ever been declared
bankrupt or has made any arrangement or composition with his creditors.
19
1.7.4 Where a Warehousekeeper assesses that any criterion detailed in Procedure D

1.7.3 has been met by any person in a senior management position, the
Warehousekeeper shall immediately notify the Exchange with details of all
facts and circumstances surrounding the assessment including:
(a) whether the Warehousekeeper believes, notwithstanding that one or

more of the criteria has been met, that the person remains suitable for
senior management; and, if so
(b) the reasons, facts, or circumstances why the Warehousekeeper believes

the person remains suitable.
1.7.5 In order to satisfy itself that a prospective or existing Warehousekeeper fulfils

the criteria detailed in this Procedure D 1.7, the Exchange may seek references
from any organisation or body it considers appropriate (e.g. members, other
Warehousekeepers, bankers or Dun & Bradstreet).
1.8 Application to become a Warehousekeeper
1.8.1 To be approved and to remain approved as a Warehousekeeper an applicant

must:
(a) meet the criteria for approval specified in Procedure D 1.7 for the
classification of Warehousekeeper in respect of which he is applying;
(b) sign the Terms and Conditions of Appointment for Nominated

Warehousekeepers; and
(c) register at least one Warehouse suitable for the storage of Goods listed
on GATS. For the avoidance of doubt, a Warehousekeeper wishing to
remain on the list of Nominated Warehousekeepers will be required to
have at least one Warehouse in respect of which he is the Nominated
Warehousekeeper.
1.8.2 To apply for nomination the applicant shall complete a Nominated

Warehousekeeper’s Application Form and submit it to the Exchange together
with a copy of his latest accounts and such other documents as the Exchange
may require. To support the application, the Exchange will require references
from a minimum of two persons who have stored relevant Goods with the
applicant within the previous two years. The Exchange may, at any time,
request information from the Warehousekeeper as to any matter relevant to
preserving the integrity of the contract.
1.8.3 The Exchange will, when considering an application or readmission, and at the
applicant’s expense, inspect the facilities which are the subject of the
application.
20
1.8.4 A successful applicant will be required to sign the Terms and Conditions of
Appointment of Nominated Warehousekeepers.
1.8.5 Subject to Procedure D 1.8 being completed satisfactorily and upon payment
of both the annual Nominated Warehousekeeper Fee and the annual
Nominated Warehouse Fee, as determined by the Exchange from time to time,
and having made such other financial provisions as may be prescribed by the
Exchange from time to time for the protection of an Owner’s interests, the
applicant will be added to the List of Nominated Warehousekeepers and
Nominated Warehouses published by the Exchange from time to time.
1.9 Application to add a Warehouse
1.9.1 To have a Warehouse approved and for such Warehouse to remain approved,
the applicant Warehousekeeper must ensure that it meets the requirements
specified in Procedure D 1.16 for the classification of Warehouse in respect of
which he is applying.
1.9.2 To apply for nomination of a Warehouse the applicant shall complete a

Nominated Warehouse Application Form and submit it to the Exchange
together with such other documents as the Exchange may require.
1.9.3 The Exchange will, at the applicant’s expense, inspect the facilities which are
the subject of the application when considering the application.
1.9.4 Subject to Procedure D 1.9 being completed satisfactorily, the Warehouse will
be added to the List of Nominated Warehousekeepers and Nominated
Warehouses.
1.10 Annual Renewal of Nomination
1.10.1 In order for the Warehousekeeper to continue to be eligible for nominated

status, the Warehousekeeper is required to submit to the Exchange each year
an Application Form for Renewal of Appointment to the LIFFE List of
nominated Warehousekeepers and Warehouses. This must be completed and
received by the Exchange by 31 March each year, or on such other date as may
be notified by the Exchange.
1.10.2 A Warehousekeeper shall notify the Exchange immediately if he has reason to

believe that any of the information supplied to the Exchange in the original
Nominated Warehousekeepers Application Form or the annual Nominated
Warehousekeepers Renewal Form has ceased to be accurate, or, if he ceases to
comply with the requirements stated in these Procedures.
1.10.3 A Warehousekeeper shall pay to the Exchange both the annual Nominated
Warehousekeeper Fee and the annual Nominated Warehouse Fee, as
determined by the Exchange, by no later than 31 March each year, or on such
other date as may be notified by the Exchange.
21
1.11 Resignation
1.11.1 A Warehousekeeper wishing to resign from his nominated status shall give 6
months notice in writing to the Exchange.
1.11.2 Before the resignation of a Warehousekeeper can be accepted he will be

required to confirm in writing to the Exchange that he no longer has any
Goods with a Valid Grading Result held in Warehouses under his control or;
either
(a) he has received the consent of all current holders of the relevant
Warrants for the Goods to be transferred in accordance with Procedures
D 1.19 and D 1.20, D 1.23 D 1.24 or D 1.25, as the case may be, into
the control of another Warehousekeeper; or
(b) he has received the agreement of the current holders of the relevant
Warrants that the Goods will no longer be stored in a Warehouse.
1.11.3 Any movement or change in control of Goods which have a Valid Grading
Result which are required to be made by the Warehousekeeper must comply
with Procedures D 1.19 and D 1.20, D 1.21 D 1.23 or D 1.24, as the case may
be.
1.11.4 Any costs incurred in connection with the movement or change in control of
Goods listed on GATS necessitated by the resignation of the Warehousekeeper
shall be for the account of the Warehousekeeper.
1.12 Insolvency
1.12.1 The Exchange must be informed immediately, in writing, either directly by the
Warehousekeeper or via the appointed liquidator or receiver, as the case may
be:
(a) where the Warehousekeeper is a company, if the Warehousekeeper

passes a resolution for its winding up or a court of competent
jurisdiction makes an order for the Warehousekeeper’s winding up or
dissolution;
(b) where the Warehousekeeper is a partnership, if the Warehousekeeper is

dissolved;
(c) if the Warehousekeeper fails to pay any sum due and payable or
suspends any payment;
(d) of the making of an administration order in relation to the

Warehousekeeper or the appointment of a receiver over, or an
22
encumbrancer taking possession of or selling, an asset of the

Warehousekeeper;
(e) if the Warehousekeeper makes an arrangement or composition with its

creditors generally or makes an application to a court of competent
jurisdiction for protection from its creditors generally;
(f) of the making of a bankruptcy order against the Warehousekeeper; or
(g) if the Warehousekeeper is subject to any other insolvency or

bankruptcy procedure under the Insolvency Act 1986 or Insolvent
Partnerships Order 1994 or an analogous procedure under the law of
the jurisdiction in which the Warehousekeeper is incorporated or any
jurisdiction in which it carries on business.
For these purposes the “winding up” or “dissolution” of a company or

partnership, an “administration order” or “bankruptcy order” is to be construed
so as to include any equivalent or analogous proceedings or orders under the
law of the jurisdiction in which the Warehousekeeper is formed or any
jurisdiction in which it carries on business.
1.12.2 Upon receiving a notification under Procedure D 1.12.1, the Exchange will
immediately suspend the Warehousekeeper from the List of Nominated
Warehousekeepers and Nominated Warehouses and shall publish such
information by London Notice. The suspended Warehousekeeper will
continue to be bound by the Exchange’s requirements and the Exchange may
give directions as to the status and disposal of Warrants issued by the
suspended Warehousekeeper which relate to Goods stored for potential
delivery against the Cocoa or Robusta Coffee Futures Contract.
1.12.3 Following the suspension of the Warehousekeeper the Exchange will where
possible and at its absolute discretion transfer the registration of the
Warehouse(s) from the Warehousekeeper who has been suspended to another
Warehousekeeper who has made an application to the Exchange to register
such Warehouse(s) and to assume control of any Goods listed on GATS
contained in such Warehouse(s). Any Goods listed on GATS which are stored
in the Warehouse(s) will, with the consent of the Owner of the Goods, pass
into the control of the Warehousekeeper to whom the registration of the
Warehouse(s) has been transferred.
1.12.4 In the event that Goods listed on GATS which are under the control of a
Warehousekeeper who has been suspended are being stored in a Warehouse
registered to another Warehousekeeper, the control of the Goods will, with the
consent of the Owner of the Goods and of the Warehousekeeper to whom the
Warehouse is registered, be assumed by such Warehousekeeper.
1.12.5 In the event that the transfer of registration of a Warehouse under Procedure
D 1.12.3 does not occur, the movement of any Goods from that Warehouse to
23
the Warehouse(s) of another Warehousekeeper shall be in accordance with the

instructions of the Owner of the Goods.
1.12.6 In the event that the Owner of the Goods does not consent to the control of the
Goods passing, under Procedure D 1.12.4, to the Warehousekeeper in whose
Warehouse the Goods are stored, or in the event that the Warehousekeeper in
whose Warehouse the Goods are stored does not consent to the Goods passing
into his control, the movement of any Goods from that Warehouse to the
Warehouse(s) of another Warehousekeeper shall be in accordance with the
1.12.7 Any movement undertaken under Procedure D 1.12.5 and D 1.12.6 must
comply with Procedures D 1.19 and Procedures D 1.20, D 1.23, ,
D 1.24, or D 1.25 as the case may be, or as otherwise instructed by the
Exchange in its absolute discretion.
1.12.8 Any movement undertaken under Procedure D 1.12.5 and D 1.12.6 shall be the
responsibility of, and for the account of the Owner of the Goods. Upon
completion of the movement of the Goods, the Owner shall present to the
Exchange a detailed account of the costs incurred in the movement of the
Goods. The Exchange may, in its absolute discretion, utilise the performance
bond of the Warehousekeeper who has been suspended to contribute to the
costs incurred by the Owner in the movement of Goods which are listed on
GATS as having a Valid Grading Result or an expired Valid Grading Result.
Any such funds made available by the utilisation of the performance bond in
accordance with these Procedures can only be used to contribute to the costs of
the movement of Goods within the same Delivery Area.
1.12.9 For the purpose of these Procedures the cost of the movement of Goods will be
limited to:
(a) the cost of loading of the Goods onto the means of transportation;
(b) the cost of transportation of the Goods to the receiving Warehouse;
(c) the cost of unloading of the Goods into the receiving Warehouse; and
(d) the cost of weighing the Goods at the receiving Warehouse.
Goods passing to another Warehousekeeper in accordance with Procedures
D 1.12.3 and D 1.12.4, any costs incurred in the movement of the Goods will
be for the account of the Owner. In such instances the Exchange will not
utilise the performance bond of the Warehousekeeper who has been
suspended.
1.12.11 The Exchange, once satisfied that it is in possession of all requests for funds in
accordance with Procedure D 1.12.8, in relation to the suspension of a
24
particular Warehousekeeper, will allocate to the Owners of the Goods the

funds deriving from utilisation of the performance bond in the following
manner:
(a) where sufficient funds are available, the cost of moving all relevant
Goods listed on GATS as having a Valid Grading Result or expired
Valid Grading Result will be met. Any surplus funds will be returned
to the issuer of the performance bond; or
(b) where the funds are not sufficient to meet the costs of moving all
Valid Grading Result then the funds will be allocated to meet the cost
of moving:
(i) all relevant Goods listed on GATS as having a Valid Grading

Result. Where the funds are not sufficient to meet the cost of
moving all such Goods then the funds will be allocated pro-rata
by Owner across those Goods; and
(ii) if any further funds are available, such funds will be allocated
pro-rata by Owner across all relevant Goods listed on GATS as
having an expired Valid Grading Result.
The Owner may seek to recover any remaining costs from the
Warehousekeeper, his liquidator or receiver as the case may be.
1.12.12 Following any suspension under Procedure D 1.12.2, the nomination of a

Warehousekeeper may be terminated in accordance with Procedure D 1.13.
1.12.13 Following any suspension under Procedure D 1.12.2 samples may only be
drawn from Goods currently listed on GATS and shall be drawn under the
supervision of the Exchange or a Supervision Company.
1.12.14 A tender against a position held in the Cocoa or Robusta Coffee Futures
Contract of a Warrant issued by a Warehousekeeper which is made prior to the
suspension of that Warehousekeeper shall not be invalidated, but no further
tenders of Warrants issued by the suspended Warehousekeeper may be made
after his suspension.
1.13 Termination of Nomination
1.13.1 The nominated status of a Warehouse or Warehousekeeper may be terminated

by either the Exchange or the Warehousekeeper.
1.13.2 In the event that it is found that a Warehouse or a Warehousekeeper fails to

meet the requirements of the Rules, the relevant contract terms or these
Procedures, the Exchange may:
25
(a) either by notice in writing require the Warehousekeeper to remedy the

situation promptly; or
(b) terminate the nomination of the Warehousekeeper or that of a

Warehouse and remove the Warehousekeeper or Warehouse from the
List of Nominated Warehousekeepers and Nominated Warehouses
immediately, or upon such notice as the Exchange may deem
expedient.
1.13.3 Following the termination of the Warehousekeeper under Procedure D 1.13.2

the Exchange will where possible and at its absolute discretion transfer the
registration of the Warehouse(s) from the Warehousekeeper whose nomination
has been terminated to another Warehousekeeper who has made an application
to the Exchange to register such Warehouse(s) and to assume control of any
Goods listed on GATS contained in such Warehouse(s). Any Goods listed on
GATS which are stored in the Warehouse(s) will, with the consent of the
Owner of the Goods, pass into the control of the Warehousekeeper to whom
the registration of the Warehouse has been transferred.
1.13.4 Subject to Procedure D 1.13.19 in the event that Goods listed on GATS which
are under the control of a Warehousekeeper whose nomination has been
terminated under Procedure D 1.13.2 are being stored in a Warehouse
registered to another Warehousekeeper, the control of the Goods will, with the
consent of the Owner of the Goods and of the Warehousekeeper to whom the
Warehouse is registered, be assumed by such Warehousekeeper.
1.13.5 Subject to Procedure D 1.13.19 in the event that the transfer of registration of a
Warehouse under Procedure D 1.13.3 does not occur, the movement of any
Goods from that Warehouse to the Warehouse(s) of another Warehousekeeper
shall be in accordance with the instructions of the Owner of the Goods.
Goods passing, under Procedure D 1.13.4, to the Warehousekeeper in whose
Warehouse the Goods are stored, or in the event that the Warehousekeeper in
whose Warehouse the Goods are stored does not consent to the Goods passing
into his control, the movement of any Goods from that Warehouse to the
Warehouse(s) of another Warehousekeeper shall be in accordance with the
1.13.7 Any movement undertaken under Procedure D 1.13.5 and D 1.13.6 must
comply with Procedures D 1.19, D 1.20, D 1.23, D 1.24 or D 1.25 as the case
may be, or as otherwise instructed by the Exchange in its absolute discretion.
1.13.8 Any movement undertaken under Procedure D 1.13.5 and D 1.13.6 shall be the
responsibility of the Owner of the Goods. Any costs incurred in the movement
of the Goods shall be for the account of the Warehousekeeper whose
nomination has been terminated. Should the Warehousekeeper refuse to co-
operate with the Owner of the Goods with regard to meeting any reasonable
26
costs incurred in the movement of the Goods, the Owner shall inform the
Exchange of this in writing and provide a detailed account of the costs
incurred in the movement of the Goods.
1.13.9 Where the Exchange considers, that such costs as may be advised to it in
accordance with Procedure D 1.13.8 are reasonable, the Exchange may, in its
absolute discretion, utilise the performance bond of the Warehousekeeper
whose nomination has been terminated to contribute to the costs incurred by
the Owner in the movement of Goods listed on GATS as having a Valid
Grading Result or an expired Valid Grading Result. Any such funds made
available by the utilisation of the performance bond in accordance with these
Procedures can only be used to contribute to the costs of the movement of
Goods within the same Delivery Area.
1.13.10 For the purpose of these Procedures the cost of the movement of Goods will be
limited to:
(a) the cost of loading of the Goods onto the means of transportation;
(b) the cost of transportation of the Goods to the receiving Warehouse;
(c) the cost of unloading of the Goods into the receiving Warehouse; and
(d) the cost of weighing the Goods at the receiving Warehouse.
Goods passing to the Warehousekeeper in accordance with Procedures
D 1.13.3 and D 1.13.4, any costs incurred in the movement of the Goods will
be for the account of the Owner. In such instances the Exchange will not
utilise the performance bond of the Warehousekeeper whose nomination has
been terminated.
1.13.12 The Exchange, once satisfied that it is in possession of all requests for funds in
accordance with Procedure D 1.13.8, in relation to the termination of
nomination of a particular Warehousekeeper, will allocate to the Owners of the
Goods the funds deriving from utilisation of the performance bond in the
following manner:
(a) where sufficient funds are available, the cost of moving all relevant
Valid Grading Result will be met. Any surplus funds will be returned
to the issuer of the performance bond; or
(b) where the funds are not sufficient to meet the costs of moving all
Valid Grading Result then the funds will be allocated to meet the cost
of moving:
27
(i) all relevant Goods listed on GATS as having a Valid Grading

Result. Where the funds are not sufficient to meet the cost of
moving all such Goods then the funds will be allocated pro-rata
by Owner across those Goods; and
(ii) if any further funds are available, such funds will be allocated
pro-rata by Owner across all relevant Goods listed on GATS as
having an expired Valid Grading Result.
The Owner may seek to recover any remaining costs from the
Warehousekeeper.
1.13.13 Under circumstances other than those referred to in Procedure D 1.13.2, either
the Exchange or Warehousekeeper may terminate the nomination of a
Warehouse of the Warehousekeeper or that of the Warehousekeeper by giving
reasonable notice in writing to the other party. Reasonable notice shall be
considered to be six full calendar months or until such time as any Parcel, Lot
or Delivery Unit listed on GATS has been removed from the Warehouse,
whichever is the sooner. The Exchange may from time to time declare what is
to be taken as reasonable notice for the purposes of this Procedure, and
different periods may be so declared for different cases.
1.13.14 Any costs incurred in connection with the movement or change in control of
Goods listed on GATS necessitated by the termination of the nomination of a
Warehouse or Warehousekeeper under circumstances other than those referred
to in Procedure D 1.13.2 shall be for the account of the Warehousekeeper
regardless of whether that termination was at instigation of the Exchange or
the Warehousekeeper.
1.13.15 Where:
(a) notice of termination is served on a Warehousekeeper in respect of its

nomination, or in respect of a Warehouse, by the Exchange; or
(b) the Warehousekeeper informs the Exchange that: either
(i) he no longer wishes to remain a Warehousekeeper; or
(ii) that he wishes to terminate the nomination of a Warehouse
and if a Parcel, Lot or Delivery Unit listed on GATS is being stored in

the Warehouse in question, or by the Warehousekeeper, then:
(iii) further samples from such Goods for submission to the

Exchange for grading shall only be drawn under supervision of
the Exchange or a Supervision Company; and
28
(iv) no tenders shall be permitted of Goods with a Valid Grading

Result, until such a time as:
(A) the Goods have been moved to another Warehouse, if so

required, in accordance with Procedures D 1.19, D 1.23,
D 1.24or D1.25, as the case may be; or
(B) change in control of the Goods has occurred, in

accordance with Procedures D 1.19 and D 1.20; and
(c) members of the Exchange shall be informed of the notice of

termination and, where relevant, the status of Goods stored within the
Warehouse, in such manner and at such time as may be determined by
the Exchange.
1.13.16 Notice of termination by a Warehousekeeper in respect of a Warehouse

containing a Parcel, Lot or Delivery Unit listed on GATS may not be served
during a Delivery Month and in respect of Cocoa until the Settlement Day,
Conversion Settlement Day or Extended Conversion Settlement Day of the
relevant Delivery Month, where relevant.
1.13.17 The Exchange may from time to time give directions as to the status and
disposal of outstanding Warrants where the nominated status of a Warehouse
or a Warehousekeeper has been terminated.
1.13.18 A Warehousekeeper who ceases to be a Warehousekeeper in relation to a

Warehouse shall remain subject to these Procedures, the Rules and to the
jurisdiction of the Exchange in respect of all acts and omissions while he was a
Warehousekeeper and in respect of any investigation or disciplinary
proceedings relating thereto (including the payment of any fine or application
or any other sanction imposed) as if he were a Warehousekeeper, for the
longer of:
(a) the period of twelve months from the date on which he ceased to be a
Warehousekeeper in relation to such Warehouse; or
(b) the period during which any disciplinary proceedings continue against
him, being proceedings started by the Exchange no later than twelve
months after the date on which he ceased to be a Warehousekeeper
subject to any extension of the period.
Where a Warehousekeeper has ceased to be a Warehousekeeper in relation to

a Warehouse, it shall be open to the Exchange to rely upon any breach of the
Rules or these Procedures in respect of the time when the Warehousekeeper
was subject thereto any investigation or disciplinary proceedings.
1.13.19 Procedures D 1.13.4 to D 1.13.5 shall be subject to:
29
(a) any contrary provision mutually agreed upon by the Exchange and the
relevant Warehousekeeper; or
(b) the Appeals procedure as specified in Section 8 of the Rules.
1.14 Disciplinary Proceedings
1.14.1 Any breach of these Procedures by a Warehousekeeper, or failure on his part

to observe the terms of or facilitate the performance of Cocoa or Robusta
Coffee Futures Contracts made under the Rules, may be investigated under
Section 5 of the Rules, and disciplinary proceedings may be commenced
against him thereunder.
1.15 Role and Responsibilities of a Warehousekeeper
1.15.1 Goods listed on GATS shall be stored by a Warehousekeeper, in a Warehouse

nominated by the Exchange for the storage of such Goods.
1.15.2 Warehousekeepers have the following primary responsibilities under the

Rules, these relevant contract terms and these Procedures:
(a) to provide and properly maintain facilities for the receipt, storage,
sampling and delivery out of Goods from a Warehouse in accordance
with the Rules, the relevant contract terms and these Procedures for the
classification of Warehousekeeper for which he is nominated;
(b) to issue Warrants and other documents in respect of Goods held in

store, as required by the Rules, the relevant contract terms and these
Procedures. The Warehousekeeper may deliver Goods out of a
Warehouse where the original Warrant has been destroyed or mislaid
once the Warehousekeeper is satisfied upon diligent enquiry and after
completion of all relevant procedural requirements in that jurisdiction
that the person claiming ownership of the relevant Goods has a proper
right to do so;
(c) to enter onto GATS and properly maintain details of Goods held
against Warrant in store as required by the relevant contract terms and
these Procedures;
(d) to ensure that Goods are at all times correctly stored and identified as
required by:
(i) in respect of Cocoa, Procedures D 1.16, D 2.1 and D 2.2; or
(ii) in respect of Robusta Coffee, Procedures D 1.16, D 3.1 and

D 3.2.
30
(e) In respect of Goods stored in a Warehouse for potential delivery

against the Cocoa or Robusta Coffee Futures Contract, and listed on
GATS, a Warehousekeeper shall maintain such Goods in external
good order and externally free from any insect, rodent or any other
type of infestation;
(f) to draw samples in accordance with Procedures D 2.4, D2.5, D 2.6

and D 2.7 in respect of Cocoa and Procedures D 3.4 and D 3.5 in
respect of Robusta Coffee for despatch to the Grading Room;
(g) to pay to the Exchange such registration and other fees as are
provided for in or under the Rules and in the Nominated
Warehousekeeper’s Application Form or as prescribed by the
Exchange from time to time. Such fees shall not be refundable in the
event of resignation or termination of nomination;
(h) to maintain such other financial provisions as may be prescribed by

the Exchange from time to time for the protection of an Owner’s
interests;
(i) to maintain appropriate insurance to ensure that the interests of

Owners are protected should a claimable event occur;
(j) to act in such a way that ensures that any landlord, authority or other
person will not acquire a lien, right of pledge or similar charge over
the Goods stored in the Warehouse, and to agree not to exercise any
lien, right of pledge or similar charge in relation to the Goods save in
respect of charges owed to him in relation to the storage of those
Goods. If, notwithstanding this Procedure a lien or other right does
arise the Warehousekeeper shall notify the Exchange in writing
immediately. Where the Warehousekeeper could discharge the lien
he must do so immediately or where this is not possible he must
arrange for all the Goods stored in the Warehouse to be transferred to
another Warehouse, or as the Exchange shall direct, and upon such
transfer shall ensure that the provisions of Procedures D 1.19 , D
1.20, D 1.23, D 1.24 and D 1.25 are complied with; and
(k) to abide by any other Procedures published by the Board from time to
time.
31
1.16 Storage requirements
1.16.1 A Warehouse may only be registered by one Warehousekeeper. A

Warehousekeeper may store Goods in bags in a Warehouse in respect of which
he is not the nominated Warehousekeeper. However, a Warehousekeeper may
only store Goods in Bulk in a Warehouse for which he is the nominated
Warehousekeeper.
1.16.2 Goods listed on GATS must be stored in accordance with Procedures D 2.1
and D 2.2 in respect of Cocoa and Procedures D 3.1 and D 3.2 in respect of
Robusta Coffee.
1.16.3 In instances where a Warehousekeeper is storing Goods in bags in a

Warehouse registered by another Warehousekeeper the following conditions
will apply:
(a) the Warehousekeeper who has registered the Warehouse will be

responsible for the payment of the annual Nominated Warehouse Fee
and the provision of an appropriate performance bond to cover that
Warehouse, even though Goods which are under the control of other
Warehousekeepers may from time to time be stored in that Warehouse;
(b) the Warehousekeeper who has registered the Warehouse will be

responsible for any failure to maintain that Warehouse to the standard
required in these Procedures and will be sanctioned accordingly,
notwithstanding that such a failure may have been as a result of the
storage of Goods in that Warehouse by another Warehousekeeper;
(c) the Warehousekeeper who has issued the warrants in respect of the
Goods will be responsible for any failure to maintain those Goods to
the standard required by these Procedures and will be sanctioned
accordingly, even though such a failure may be as a result of the
actions of another Warehousekeeper in whose Warehouse the Goods
are stored or the failure of that Warehousekeeper to maintain that
Warehouse to the standard required by these Procedures;
(d) any sampling, weighing or other activity required by the Owner of the
Goods listed on GATS in relation to Goods stored in the Warehouse of
another Warehousekeeper shall be carried out by the Warehousekeeper
who issued the warrants in respect of those Goods; and
(e) a Warehousekeeper may not undertake any movement of Goods which

are stored in his Warehouse and that are under the control of another
Warehousekeeper unless directed to do so by the responsible
Warehousekeeper who in turn will have, where necessary, gained
permission from the Owner and the Exchange.
32
1.16.4 Each Warehouse shall be clearly identified with a name, letter or number and
such designation shall be recorded in the List of Nominated Warehousekeepers
and Warehouses.
1.16.5 A Warehousekeeper shall:
(a) keep any Warehouse, in respect of which he is registered as the

Warehousekeeper, in a good state of repair at all times. Windows,
doors and drainpipes shall be weatherproof and properly fitted to
prevent the entry of pests. Guttering shall be sound and free from
weeds and debris. Downpipes shall be sound and lead immediately to
an adequate drain or soak-away. Where internal downpipes are
vulnerable to collision damage, they must be adequately protected;
(b) keep ground around the outside of a Warehouse free from waste,
lumber, weeds and other debris, to discourage pests and reduce the risk
of fire. The immediate area should also be kept free of trees and other
vegetation whose growth could present a threat to the structure of the
Warehouse;
(c) provide effective lighting in all areas where Goods are stored or
handled. In respect of Warehouses approved for the storage of Bulk
Delivery Units, such lighting should be protected to prevent breakages
falling upon the Goods;
(d) keep pest control logs and records of visits made by the pest control
company;
(e) ensure that a Warehouse is equipped with adequate fire-fighting

facilities, which comply with an applicable local, port, state and or
national regulations. Access to extinguishers and hoses must not be
blocked. Equipment must be checked regularly and each inspection
recorded;
(f) prohibit smoking in storage areas;
(g) ensure that all animals, both domestic and wild, are excluded from the
Warehouse; and
(h) bear the cost of maintaining the Goods to the standard required in
Procedure D 1.15.2. In respect of Cocoa, it is understood that the
Warehousekeeper shall make a periodic charge to cover the cost of
fumigation and fogging, in addition to rent that is charged.
1.16.6 In respect of Cocoa or Robusta Coffee, Goods shall be stored in sound bags in
external good order and meeting the criteria prescribed by the Exchange from
time to time.
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1.16.7 In respect of Warehouses nominated for the storage of Goods in bags the
following requirements shall apply:
(a) the following substances must not be stored with Cocoa or Robusta
Coffee stored in a Warehouse:
(i) dangerous chemicals or inflammable materials, as classified in

the International Maritime Dangerous Goods Code;
(ii) spices of any kind;
(iii) any type of animal hides;
(iv) odorous substances; or
(v) any other materials that the Exchange may deem to be harmful
to the Goods; and
Robusta Coffee and Cocoa may only be stored in the same Warehouse
when they are piled in such a manner that they could not be affected by
taint e.g. segregated in separate areas of the shed;
(b) a Warehouse shall be adequately ventilated;
(c) a Warehouse shall be kept broom clean, with cleaning materials close
to hand. All spillages shall be tidied up promptly;
(d) a Warehouse and any Goods contained therein shall be kept clear of
infestation by:
(i) closed rodent prevention bait boxes/traps, which shall be in

sufficient numbers and well maintained at ground level at
regular intervals along the internal walls of the building. These
should be inspected by the pest control company on a regular
basis but not less than once a month;
(ii) fumigating as and when necessary;
(iii) fogging as and when necessary; and
(e) each Warehouse, or group of Warehouses, shall have accurate scales

for weighing palletised Goods which shall weigh to a minimum
interval of 1 kg with a tolerance of 1.5 kg above or below the true
weight. The scales shall be regularly serviced and re-calibrated at least
once a year and tested every shift prior to use or following any change
in location of the scales. Service records shall be available to
demonstrate compliance with these requirements.
34
1.16.8 In respect of Warehouses nominated for the storage of Cocoa in bulk, the
following requirements shall apply in addition to those in Procedure D 1.16.7:
(a) the Warehouse shall either be used solely for the purpose of storing
bulk Cocoa, or be fitted with a permanent or temporary screen across
the full height and width of the Warehouse segregating the bulk Cocoa
from all other Goods, including bagged Cocoa, stored within the
Warehouse;
(b) the Warehouse, or area intended for the storage of bulk Cocoa within
the Warehouse, shall be of a size capable of accommodating a
minimum of two Bulk Delivery Units;
(c) the Warehouse must be equipped with such permanent or temporary

partitioning which allows the retention and segregation of Cocoa,
ensures its security from theft, and which is otherwise in accordance
with these Procedures;
(d) equipment should be readily available for the stowage into, loading out
from or movement of Cocoa within the Warehouse;
(e) equipment should be readily available for the batch weighing of Cocoa
stored in bulk. Where the equipment is used to weigh quantities of 5
tonnes or less of Cocoa it shall weigh to a minimum interval of 5 kg
with a tolerance of 7.5 kg above or below the true weight. Where the
equipment is used to weigh quantities of more than 5 tonnes of Cocoa
it shall weigh to a minimum interval of 20 kg with a tolerance of 30 kg
above or below the true weight. The equipment shall be regularly
serviced and re-calibrated at least once a year and tested ever shift
prior to use or following any change in location of the equipment.
Service records shall be available to demonstrate compliance with
these requirements. In the event that a public weighbridge is used,
such weighbridge must comply with these requirements and be
appropriately certified by the local authorities;
(f) equipment should be readily available in order to facilitate the

ventilation of a Bulk Delivery Unit and the extraction of air from
within the Warehouse in accordance with Procedure D 2.1.2(b)(iii);
(g) equipment should be readily available for the bagging of a Bulk

Delivery Unit into bags of a size and standard meeting the criteria
prescribed by the Exchange from time to time; and
(h) bags meeting the criteria prescribed by the Exchange from time to time
must be readily available in sufficient quantities to allow for the
bagging of a Bulk Delivery Unit.
35
1.17 Maintenance of Records
1.17.1 A Warehousekeeper shall maintain full and appropriate records:
(a) that are arranged, filed and indexed so as to allow prompt access to any
particular record;
(b) from which the precise identity of Goods relating to individual

Warrants issued may be ascertained; and
(c) which provide a complete audit trail of the Goods from the time that
they were taken into store by the Warehousekeeper.
1.17.2 Subject to Procedure D 2.8.2 (d) and D 2.8.2 (i) in respect of Cocoa, the
records that a Warehousekeeper shall maintain on file:
(a) as proof of identity of Goods shall include, but is not limited to, Bills
of Lading, Warehouse receipts, storage instructions received from the
Owner of the Goods and any other such documents which may aid in
identifying the relevant Goods and their date of shipment from Origin;
and
(b) to provide a complete history of the Goods whilst stored by the

Warehousekeeper shall include, but is not limited to, those relating to
the weighing, sampling, movement, and fumigation of the Goods
(including the identity of the personnel executing such functions) and
in respect of Bulk Delivery Units, the dates and times of ventilation
and extraction performed in respect of such Cocoa as well as any other
information considered relevant to such exercise, and any instructions
received from the Owner of the Goods, relating to these Goods.
1.17.3 The position of each Parcel, Lot or Delivery Unit within the warehouse shall
be recorded and maintained by the warehousekeeper on a storage plan of the
warehouse or on a list of storage zones or locations of the Warehouse in a
manner that will allow an Exchange official or other third party readily to
locate and identify the Parcel, Lot or Delivery Unit.
1.17.4 A Warehousekeeper may keep a record in electronic form, provided that:
(a) a hard copy can be reproduced if so required; and
(b) the system is adequately safeguarded against loss of information by

way of appropriate back-up systems.
1.17.5 All records relating to Goods shall be retained for a minimum of two years
following delivery out of the Goods and shall be held in such a manner that
they may be promptly accessed upon request and are reasonably safeguarded
against loss, alteration or destruction.
36
1.17.6 A Warehousekeeper shall keep all the records specified in Procedure D 1.17
and all information held in its capacity as Warehousekeeper confidential at all
times except where directed to disclose such information by the Exchange in
its absolute discretion or where otherwise required by these Procedures.
1.18 Stock Figures
1.18.1 Following the grading of a sample by LIFFE Registered Cocoa or Robusta

Coffee Graders, the Exchange shall inform the Warehousekeeper responsible
for the drawing of the sample from the Goods in such a manner as may be
prescribed by the Exchange from time to time, whether the Parcel, Lot or
Delivery Unit to which the sample relates has been graded tenderable or not
tenderable. The Warehousekeeper shall keep a record of such results.
1.18.2 At a time and in such a manner as may be prescribed by the Exchange from
time to time, any Warehousekeeper having a Warehouse nominated for the
storage of:
(a) Cocoa shall advise the Exchange of the number of Standard, Large and
Bulk Delivery Units which are in store in the Warehouse and are the
subject of:
(i) a Valid Grading Result;
(ii) an expired Grading Result; and
(iii) a not tenderable Grading Result;
or
(b) Robusta Coffee, shall advise the Exchange of the number of Parcels
and the number of Lots which are in store in the Warehouse and are the
subject of:
(i) a Valid Grading Result;
(ii) an expired Grading Result; and
(iii) a not tenderable Grading Result.
1.18.3 The Exchange will use such information to compile data relating to the total
number of Lots of Robusta Coffee or Delivery Units of Cocoa, as the case may
be, stored in Warehouses. The Exchange may, in its absolute discretion,
publish information relating to the total number and type of Lots of Robusta
Coffee or Delivery Units of Cocoa, which are the subject of Valid Grading
Results, expired Grading Results, or which are not tenderable, stored in each
port or Delivery Area.
37
1.19 Movement of Goods and change in control of a Warehouse or

Warehousekeeper – General Requirements and Procedures
1.19.1 From time to time a Warehousekeeper may:
(a) determine to either:
(i) move Goods to another Warehouse under his control;
(ii) relinquish the control of a Warehouse to another

Warehousekeeper;
(iii) move Goods from a Warehouse under his control to another

Warehouse under the control of another Warehousekeeper; or
(b) in respect of Cocoa, be instructed by the Owner of the Cocoa to move

or convert Delivery Units or to re-bag the Cocoa; or
(c) in respect of Robusta Coffee be instructed by the Owner of the Robusta

Coffee to move a Parcel or Lot.
In such circumstances, Procedures D 1.19.2 to D 1.19.8 shall apply, as the

case may be, in respect of Procedures D 1.20 to D 1.24 inclusive.
1.19.2 Except in extreme circumstances no approval will be given by the Exchange

for the movement of Goods during any period in which the Goods could be the
subject of a delivery, from the Notice Day of that period until the relevant
Settlement Day.
1.19.3 For the purpose of these Procedures, control of the Goods shall be deemed to
be exercised by the Warehousekeeper issuing the Warrant for the Goods.
1.19.4 In respect of Goods having a Valid Grading Result and which do not,
according to these Procedures, require regrading before they may be tendered,
then:
(a) prior to the change of control and where relevant, movement, of Goods
between different Warehousekeepers, the current and new
Warehousekeepers shall jointly inspect the Goods at the Warehouse of
the current Warehousekeeper to verify the identity of the Goods which
are the subject of the change in control, and to determine the external
good order of such Goods; and
(b) once both Warehousekeepers are satisfied as to the identity and

external good order of the Goods they shall countersign appropriate
documentation to that effect and, where relevant, may undertake the
movement of such Goods. In the event that such agreement cannot be
38
reached, then the opinion of a mutually acceptable competent

independent authority shall be sought by the Warehousekeepers.
1.19.5 The Exchange shall have the discretion to require independent supervision of
the movement of Goods having a Valid Grading Result.
1.19.6 All costs incurred in following the requirements laid out in Procedure D 1.1.19
to D 1.24, as the case may be, and including, inter alia, the costs of
independent supervision, where relevant, shall be for the account of the:
(a) Owner of the Goods where such movement or change in control is at

the request of, or caused by, the Owner of the Goods, including where
such movement is the result of an instruction from the Clearing House
to the Seller to convert a Delivery Unit in accordance with Cocoa
contract term 12.03; or
(b) Warehousekeeper, where any such movement or change in control is at

the request of, or caused by, the Warehousekeeper.
1.19.7 In order to ensure the integrity of the audit trail in circumstances where
movement of Goods occurs, the following shall be provided by the current
Warehousekeeper to the new Warehousekeeper:
(a) where such Goods have a final day of landing:
(i) on or prior to 31 March 2000; either
(A) a copy of the relevant Bill(s) of Lading, with any

confidential counterparty details deleted; or
(B) appropriate documentation, dated and signed by the

current Warehousekeeper, detailing in respect of such
Goods the Origin, name of vessel(s), mark(s) on the
bags, and, where such date(s) can be determined (refer
to Procedure D 2.8.3), dates of issue of the Bill(s) of
Lading for the shipment of the Goods from Origin as
well as, where relevant, crop year of the Goods, as
specified on the original shipping documents relating to
such Goods;
(ii) on or after 1 April 2000; a copy of the relevant Bill(s) of

Lading, with any confidential counterparty details deleted; and
(b) details of the existing Warrant number of such Goods; and
(c) any other information as the Exchange may require from time to time.
39
In the event that the current Warehousekeeper is not in possession of copy or

original Bill(s) of Lading required in order to comply with Procedure
D 1.19.7(a)(ii), he shall advise the Exchange in writing, including the reason
for the absence of such documentation, and the Exchange shall determine in
its absolute discretion what other information or documentation may instead
be provided.
1.19.8 The Exchange may if it deems it necessary and if it is considered that a

movement or change in control of Goods will harm or may have the potential
to harm the integrity of the contract:
(a) refuse permission for the movement of Goods if it is considered that a

particular Warehousekeeper would, as a result, control a
disproportionately large amount of Goods having Valid or expired
Grading Results;
(b) require the regrading of any Goods having a Valid Grading Result
under circumstances where it is the subject of a movement or change in
control; or
(c) require a Warehousekeeper or the Owner of the Goods to demonstrate

that there were sound commercial reasons for a change in control to
take place, before granting its permission.
1.20 Change in control of Goods between different Warehousekeepers –

Goods remaining in the same Warehouse
1.20.1 Prior to any change in control of Goods between different Warehousekeepers

where the Goods remain in the same Warehouse:
(a) the current Warehousekeeper shall make a written application to the

Exchange giving the following information:
(i) the reason for the intended change in control of the Goods; and
(ii) where the change in control of the Goods is at the request of the
Warehousekeeper, evidence that the written consent of the
Owner of the Goods has been obtained.
(b) the new Warehousekeeper shall confirm to the Exchange in writing

that he will:
(i) either re-weigh the Goods and, unless otherwise agreed with
the Owner, take responsibility for any loss in weight, if
applicable, or accept the weights recorded in GATS;
(ii) advise the Exchange of the new Lotting Account details (the
Exchange shall give directions as to which details shall be input
40
into GATS by the Exchange, and which by the

Warehousekeeper); and
(iii) issue new Warrants against the Goods in exchange for all
existing Warrants, and advise the Exchange of the new Warrant
numbers and the numbers of the Warrants which they replace.
1.20.2 Change in control of the Goods may not take place until such time as the
Exchange has received the above and any additional information it may
require, and has given its written consent. The new Warehousekeeper shall
inform the Exchange upon completion of the change in control.
1.21 Movement of Goods within the same Delivery Area –

Warehouses under the control of the same Warehousekeeper
1.21.1 Prior to any movement of Goods from one Warehouse directly to another
Warehouse within the same Delivery Area and under the control of the same
Warehousekeeper, the Warehousekeeper shall make a written application to
the Exchange, giving the following information:
(a) the reason for the intended movement;
(b) the approximate distance between the relevant Warehouses;
(c) where the movement of the Goods is at the request of the

Warehousekeeper, evidence that the written consent of the Owner of
the Goods has been obtained; and
(d) an undertaking to re-weigh the Goods and, unless otherwise agreed

with the Owner, take responsibility for any loss of weight, if
applicable.
1.21.2 Movement of the Goods may not commence until such time as the Exchange
has received the above and any additional information it may require and has
given its written consent. The Warehousekeeper shall inform the Exchange
upon completion of the movement of the Goods and shall advise the Exchange
of the new Lotting Account details (the Exchange shall give directions as to
which details shall be input into GATS by the Exchange, and which by the
Warehousekeeper).
1.21.3 A Bulk Delivery Unit which has been moved from one Warehouse to another
pursuant to Procedure D 1.21 may not be tendered until it has been regraded as
tenderable.
41
1.22 Movement of Goods within the same Delivery Area for the purpose of
fumigation
1.22.1 For the purpose of fumigation, a Warehousekeeper may move Goods to

another Warehouse within the same Delivery Area and under the control of the
same Warehousekeeper, provided that the Warehousekeeper:
(a) gives the Exchange two working days’ notice of the intended
movement of the Goods; and
(b) provides written confirmation to the Exchange that:
(i) on completion of the fumigation the Goods will be moved back

to the Warehouse in which they were stored prior to
fumigation; and
(ii) he will re-weigh the Goods and, unless otherwise agreed with
applicable.
1.23 Movement of Goods within the same Delivery Area - Warehouses under
the control of different Warehousekeepers
1.23.1 Prior to any movement of Goods from a Warehouse of one Warehousekeeper

directly to another Warehouse under the control of a different
Warehousekeeper within the same Delivery Area:
(a) the current Warehousekeeper shall make a written application to the

Exchange giving the following information:
(i) the reason for the intended movement and change in control of
the Goods; and
(ii) where the movement and change in control of the Goods is at

the request of the Warehousekeeper, evidence that the written
consent of the Owner of the Goods has been obtained; and
(b) the new Warehousekeeper shall confirm to the Exchange in writing

that he will:
(i) either re-weigh the Goods and, unless otherwise agreed with
applicable, or accept the weights recorded in GATS;
(ii) advise the Exchange of the new Lotting Account details (the
Exchange shall give directions as to which details shall be input
into GATS by the Exchange, and which by the
Warehousekeeper); and
42
(iii) issue new Warrants against the Goods in exchange for all
existing Warrants, and advise the Exchange of the new Warrant
numbers and the numbers of the Warrants which they replace.
1.23.2 Movement and change in control of the Goods may not commence until such
time as the Exchange has received the above and any additional information it
may require, and has given its written consent. The new Warehousekeeper
shall inform the Exchange upon completion of the movement and change in
control of the Goods.
1.23.3 A Bulk Delivery Unit which has been moved from one Warehouse to another
pursuant to Procedure D 1.23 may not be tendered until it has been regarded as
tenderable.
1.24 Movement of Goods across different Delivery Areas –

Warehouses under the control of the same or different Warehousekeepers
1.24.1 In the event that movement of Goods from one Warehouse to another in a
different Delivery Area under the control of:
(a) the same Warehousekeeper is required, the Procedures in D 1.21 shall

apply; or
(b) different Warehousekeepers is required, the Procedures in D 1.20 shall

apply.
1.24.2 Any such Goods having a Valid Grading Result may not be tendered following
such movement until the Goods have been regraded as tenderable.
1.25 Insolvency or delisting of a Warehousekeeper causing movement or

change in control of Goods listed on GATS
1.25.1 Where movement or change in control of Goods listed on GATS occurs in

circumstances where the Exchange determines in its sole discretion that the
original Warehousekeeper is no longer able to carry on business in the
capacity of a Warehousekeeper or has been delisted from the List of
Nominated Warehousekeepers and Nominated Warehouses, and the Goods:
(a) do not move out of a Warehouse but the control of the Goods changes
from one Warehousekeeper to another Warehousekeeper; or
(b) move directly between the Warehouses of different Warehousekeepers

within the same Delivery Area;
then the Exchange may require that the Goods are regraded as tenderable
before they may be tendered if the Exchange concludes that the specific
circumstances warrant such an approach.
43
1.25.2 Where movement or change in control of Goods having a Valid Grading

Result occurs in circumstances where the Exchange determines in its sole
discretion that the original Warehousekeeper is no longer able to carry on
business in the capacity of a Warehousekeeper or has been delisted from the
List of Nominated Warehousekeepers and Nominated Warehouses and the
Goods move from one Warehouse to another in a different Delivery Area
under the control of either the same or different Warehousekeepers, then the
Exchange may determine that the Goods do not require regrading before they
may be tendered if the Exchange concludes that the specific circumstances
warrant such an approach.
1.26 Warehouse Charges
1.26.1 A Warehousekeeper shall, for each applicable delivery area or port,

notify to the Exchange, on or before each Reporting Day, the details required
by Procedure D 1.26.2 of the maximum Rent and Movement Out Charges
which the Warehousekeeper may charge during the next Charge Period
following the Reporting Day in respect of Robusta Coffee in bags and for
Cocoa in bags and/or in bulk stored in its Warehouses.
Such details shall be provided in writing in accordance with procedures to be

notified by the Exchange from time to time and at the latest by 12:00
London time on the Reporting Day and shall be effective for the next
Charge Period following the Reporting Day. A Warehousekeeper may, in
compliance with its obligations under this Procedure, state in the
notification to the Exchange that there are no changes to the Rent and
Movement Out Charges published in the Exchange’s current Published List of
Rent and Movement Out Charges in respect of one or more of the applicable
delivery areas and/or ports.
1.26.2 The details of Rent and Movement Out Charges notified to the Exchange
pursuant to Procedure 1.26.1 above shall state the maximum amount
(inclusive of any applicable taxes) which the Warehousekeeper may charge by
the applicable delivery area and/or port in respect of a lot of Robusta Coffee
(in bags) or a Delivery Unit of Cocoa (in bags and/or in bulk) stored in any of
the applicable delivery areas and/or ports during the next Charge Period
following the Reporting Day.
1.26.3 A Warehousekeeper may not impose any charges in relation to the delivery of
goods out of a Warehouse on to a truck or a lorry other than a Movement Out
Charge. However, nothing in this Procedure D 1.26 shall prevent a
Warehousekeeper from agreeing with an Owner:
(a) to charge Rent or Movement Out Charges during a Charge Period

which are lower than the maximum amount notified to the Exchange
pursuant to Procedure D 1.26.1 in respect of such Charge Period;
44
(b) to charge a different amount from the Movement Out Charge for the
delivery of goods from within a Warehouse on to a different means of
transport; or
(c) for the provision of additional services, and additional charges for such
services, in addition to those services covered by the Rent and
Movement Out Charge,
where so requested by, or agreed with, an Owner.
1.26.4 The Exchange will publish, in respect of each Charge Period, details of Rent
and Movement Out Charges notified to the Exchange pursuant to Procedure
D 1.26.1 in the Published List of Rent and Movement Out Charges on the
Euronext.liffe website.
A Warehousekeeper may not charge Rent or Movement Out Charges which

exceed the maximum amount notified to and published by the Exchange in
respect of a Charge Period, except pursuant to Procedure D 1.26.6.
1.26.5 Failure of a Warehousekeeper to make any notification to the Exchange as

required by Procedure D 1.26.1 shall be deemed to be a notification that the
Rent and Movement Out Charges remain unchanged and the charges published
in the List of Rent and Movement Out Charges for the current Charge Period
shall continue to apply. If a notification made by a Warehousekeeper under
Procedure D 1.26.2 covers some but not all of its Warehouses by the
applicable delivery area and/or port, the Rent and Movement Out Charges for
those delivery areas and/or ports not covered in the notification shall remain
unchanged and the charges published in the List of Rent and Movement Out
Charges for the current Charge Period shall continue to apply to those delivery
areas and/or ports.
1.26.6 Notwithstanding Procedure 1.26.4, a Warehousekeeper may, in exceptional

circumstances, upon written application to and on receiving written consent
from the Exchange, seek to increase the maximum amount of Rent and/or
Movement Out Charges levied by it in respect of a Charge Period and in
respect of one or more applicable delivery areas and/or ports. Any such
application by a Warehousekeeper shall include the following information:
(a) the applicable delivery area(s) and/or port(s) and the charge(s) to
which the application applies;
(b) the proposed level of increase in such charge(s); and
(c) the reason for, and evidence in support of, the application.
1.26.7 The Exchange shall give its consent to any such application for an increase to
its charges to the extent it considers, in its absolute discretion, that the
Warehousekeeper has given reasonable evidence that the reasons cited in
45
Procedure D 1.26.6 have given, or will give, rise to a significant increase in its
costs in providing the services covered by the relevant charge.
46
2. COCOA
2.1 Piling of Cocoa
2.1.1 Subject to Schedule 1 of these Procedures in respect of Cocoa stored in bags

and listed on GATS, the following storage requirements shall be observed:
(a) each Delivery Unit shall be stored in a single Warehouse on pallets at

ground level, with the exception of multi-storey Warehouses with
wooden floors where the bags of Cocoa may be stored directly on the
floor;
(b) Cocoa comprising a Standard Delivery Unit shall be stored, subject to

Procedure D 2.1.1 (d), together in a single row, pile or component of a
block stow;
(c) Cocoa comprising a Large Delivery Unit shall be stored in no more

than two adjacent rows, piles or block stows. Procedure D 2.1 (f) shall
apply to each non-adjoining row or pile;
(d) where a Delivery Unit is composed of palletised bags the bags on each
pallet shall relate only to that Delivery Unit. Where there is a balance
of bags making up a Delivery Unit which is insufficient to fill a pallet
to capacity, those remaining bags shall be exclusively stored on a pallet
which shall be marked in accordance with Procedure D 2.2 and placed
either on top of the column of pallets comprising the majority of the
Delivery Unit or at the end of the row in which the Delivery Unit is
piled;
(e) Cocoa shall be stored with a gap of at least 45 centimetres:
(i) from any wall; and
(iii) from any other Cocoa or other goods to allow compliance with
Procedure D 2.1 (f); or
(f) at least 40% of the bags in a Delivery Unit or non –adjoining row or
pile of a Large Delivery Unit must be accessible for sampling. Where
the Delivery Unit is composed of palletised bags stored in columns or
rows, at least one side of each pallet shall be readily accessible for
sampling. Where the Parcel, Lot or Delivery Unit forms all or part of a
block stow, or is composed of two block stows, all sides of the block
stow shall be readily accessible for sampling;
2.1.2 In respect of Cocoa stored in bulk, the following storage requirements shall be
observed in addition to those in Procedure D 1.16.8:
47
(a) each Bulk Delivery Unit must be readily identifiable by the

Warehousekeeper and the Exchange inspectors;
(b) each Bulk Delivery Unit shall be stored:
(i) in one pile segregated from all other Bulk Delivery Units or,
other Cocoa stored in bulk, by temporary or permanent
partitioning as detailed in Procedure D 1.16.8 (c) and in such a
way as to ensure the Goods are secure from theft; or
(ii) in accordance with such other requirements as may be

determined by the Exchange from time to time; and
(iii) in such a way as to allow the optimum level of ventilation,

including under-pile ventilation, as well as extraction of air
from within the Warehouse; or
(iv) in accordance with such other requirements as may be

determined by the Exchange from time to time.
(c) in order to facilitate sampling, reweighing and repiling of a Bulk

Delivery Unit, within each Warehouse where Bulk Delivery Units are
stored there shall be sufficient free space for the storage of one Bulk
Delivery Unit at all times.
(d) In respect of Cocoa stored for potential delivery against a Contract in

each Delivery Unit shall be comprised of sound Cocoa which shall be
the product of a single Origin, of the same Shipment Period and stored
in one Warehouse.
2.1.3 A Delivery Unit may not, in whole or in part, be comprised of Cocoa which
previously comprised a Delivery Unit graded as not tenderable.
2.2 Identification of a Delivery Unit
2.2.1 Subject to Schedule 1 of these Procedures, each Delivery Unit shall be readily
identifiable by the warehousekeeper and the Exchange officials. The
following minimum requirements for the identification of a Delivery Unit
shall apply:
(a) where a Delivery Unit is composed of bags placed on pallets which are
stored in rows and/or columns;
(i) a hard wearing and durable label, visible from the aisle side of
the column and/or row shall be securely fastened to either a bag
lying on the first of the storage sequence or the pallet itself and
shall show, as minimum, the warrant number relating to the
48
Delivery unit and the number of bags comprising the Delivery

Unit; and
(ii) a bag on the bottom layer of bags of each pallet and visible
from the aisle side of the column and/or row shall be marked
clearly, legibly and indelibly on the fabric of the bag with the
warrant number of the Delivery Unit;
(b) where a Delivery Unit forms part of a block stow;
(i) the boundary of each individual Delivery Unit shall be marked.

A label showing as a minimum the warrant number relating to
the Delivery Unit and number of bags comprising the Delivery
Unit, shall be securely fastened to one bag on each face of the
Delivery Unit; and
(ii) subject to Schedule 1 of these Procedures, a bag on the bottom,

middle and top row of each face of the Delivery Unit shall be
marked clearly, legibly and indelibly on the fabric of the bag
with the warrant number of the Delivery Unit.
(c) for a Bulk Delivery Unit a label, showing as a minimum the warrant
number, shall be attached to the front wall or edge of the storage area.
In addition, an A4 size label attached to a post and showing as a
minimum the warrant number, shall be placed no further than two
metres into the front of the bulk pile.
2.3 Weighing of a Delivery Unit
2.3.1 A Delivery Unit shall be weighed or reweighed:
(a) when the Cocoa is combined to form the Delivery Unit in accordance
with Procedure D 2.1;
(b) each time Cocoa contained in the Delivery Unit is bagged, rebagged or
debagged in accordance with Procedures D 2.10 to D 2.13, as the case
may be;
(c) upon conversion or formation of the Delivery Unit in accordance with

Procedures D 2.10 to 2.12, as the case may be;
(d) each time the Delivery Unit is moved or is the subject of a change in
control, in accordance with Procedures D 1.19 to D 1.25, as the case
may be; and
(e) in respect of a Bulk Delivery Unit, each time the Bulk Delivery Unit is
re-piled, including, without limitation, when it is re-piled in order to be
sampled for grading under Procedure D 2.6.
49
2.3.2 The tare weight of the bags shall be that ascertained when goods were
originally entered into GATS.
2.4 Sampling of a Delivery Unit
2.4.1 In respect of a Parcel, Lot or Delivery Unit which is to be graded pursuant to

Section E of these Procedures, the member or, if he is not the Owner of the
Cocoa, the Owner on whose behalf the member is making the application for
grading, shall instruct the Warehousekeeper in writing to draw a sample from
the Delivery Unit to be graded.
2.4.2 Where the Warehousekeeper has provided notification of sampling to the

Exchange on any business day by 12:00 hours London time, sampling may
commence on the following business day. Where notification of sampling is
received after this time, sampling may only begin on the second business day.
The Warehousekeeper shall:
(a) draw the sample in accordance with these Procedures;
(b) upon completion of drawing the sample, send the sample direct to the
Grading Room, for assessment by a Grading Panel appointed by the
Exchange; and
(c) input the Lotting Account details onto GATS dated no later than two
business days after the date of the drawing of the sample, or in respect
of a Bulk Delivery Unit, upon completion of the drawing of the sample
in accordance with Procedure D 2.6; and
(d) if the Delivery Units sampled have been formed of Cocoa newly
arrived at the Warehouse and have been sampled under the provisions
of Procedure D 1.5, inform the Exchange no later than two business
days after the date of the drawing of the sample of the numbers of the
warrants which represent those Delivery Units.
2.4.3 Subject to Procedure D 1.5.7 and D 1.5.8, if sampling is to occur outside of

normal Port or Delivery Area working hours and the sampling is determined to
require supervision, then such sampling shall take place at times mutually
agreed between the Warehousekeeper and the Exchange.
2.4.4 Before sampling, the Delivery Unit identified correctly in accordance with
Procedure D 2.2 shall be inspected by the Warehousekeeper and, if nominated,
the Supervisor shall confirm that;
(a) the Goods comply with Procedures D 2.1.1 and D 2.2; and
(b) all sampling apparatus is clean, dry and free from foreign odours.
50
2.4.5 Where the conditions of Procedure D 2.4.4 are not met the Warehousekeeper
or, if nominated, the Supervisor shall immediately contact the Exchange which
shall determine what action shall be taken before sampling can commence.
2.4.6 Any sample which is to be presented to the LIFFE Grading Room and
represents either a Standard or Large Delivery Unit shall be drawn (and if
required quartered) and sealed, on the same day. Any sample which is to be
presented to the LIFFE Grading Room and represents a Bulk Delivery Unit
shall be quartered and sealed on the day on which the last portion of cocoa
which is part of the Bulk Delivery Unit is stored.
2.5 Sampling of Cocoa Stored in Bags
2.5.1 In respect of each sample drawn from a Standard Delivery Unit:
(a) a sample of 2 kg minimum weight shall be drawn which shall be

representative of the Standard Delivery Unit as a whole, and shall be
taken randomly from a minimum of 30% of the number of sound bags
forming the Standard Delivery Unit and over the full height and width
of the Standard Delivery Unit directly into a clean dry and odourless
cotton or linen sample bag with a tare not exceeding 100g; and
(b) the sample bag shall be sealed with the Warehousekeeper’s seal and
also if supervised the Supervision Company’s seal and the sample bag
shall be marked with the following as a minimum:
(i) the name of the Warehousekeeper responsible for drawing the

sample
(ii) Warrant number;
(iii) Delivery Area; and
(iv) Date on which the sample was drawn.
2.5.2 In respect of a sample drawn from a Large Delivery Unit:
(a) a preliminary sample of 12 kg minimum weight shall be drawn from a

minimum of 30% or more of the number of sound bags over the full
height and width of the Large Delivery Unit;
(b) the preliminary sample material shall be quartered to provide a grading

sample weighing not less than 3kg. The remaining beans from the
preliminary sample shall be bagged, clearly marked and stored with the
Large Delivery Unit from which they were drawn;
(c) the grading sample material shall be placed in a cotton or linen sample
bag with a tare not exceeding 150g. The grading sample bag shall be
51
sealed with the Warehousekeepers seal, and also if supervised the

Supervision Company’s seal and the details specified in Procedure D
2.5.1 (b) shall be marked on the bag;
(d) the sampling, quartering and sealing of each sample from a Large
Delivery Unit shall be completed on the same day that sampling
started: and
(e) the Warrant and Lotting Account details shall record that the 3 kg
sample has been drawn.
2.6 Sampling of Cocoa Stored in Bulk
2.6.1 In respect of each sample drawn from a Bulk Delivery Unit:
(a) sample material of 50 kg minimum weight which is representative of

the Bulk Delivery Unit as a whole shall be derived from Cocoa drawn
on an incremental basis perpendicularly across the whole flow of a
moving stream of Cocoa (but excluding the ‘fall’) comprising the
whole Bulk Delivery Unit, while the Cocoa is being re-piled. The
incremental samples shall be drawn at regular intervals dependent on
the speed of the flow, each comprising of a minimum of 500g of Cocoa
such that a total of a minimum 100 individual samples are drawn from
the Bulk Delivery Unit into bags which are clean, dry, empty and
odourless;
(b) sampling of each Bulk Delivery Unit shall be completed within a

period of 30 calendar days from the date on which sampling
commenced. During such period, the bag(s) containing the
incremental samples shall be sealed at all times when sampling is not
taking place, and shall be clearly marked and stored in a secure
location;
(c) following completion of movement and weighing or reweighing, the

Cocoa drawn, which shall be a minimum of 50 kg, shall be quartered
to provide a grading sample of 5 kg minimum weight. The balance of
the 50 kg drawn shall be returned to the relevant Bulk Delivery Unit;
(d) the grading sample shall be placed in a clean, dry, empty and odourless
cotton or linen sample bag with a tare not exceeding 250 g. The
sample bag shall be sealed with the Warehousekeeper’s seal, and also
if supervised the Supervision Company’s seal and the sample bag shall
be marked with the details specified in Procedures D 2.5.1 (b);
(e) the Warrant and Lotting Account details shall record that the 5 kg
sample and the net weight that has been drawn; and
52
(f) the Warehousekeeper shall maintain a record of the equipment used for
the repiling and sampling, the speed of the Cocoa flow and the
intervals during which the incremental samples were drawn, and the
individual dates on which each incremental sample, or consecutive
incremental samples, were drawn.
2.7.1 A Warehousekeeper shall draw a sample in accordance with Procedures D 2.4

to D 2.6, as the case may be, and shall submit such sample directly to the
Grading Room for grading. Customs duties, if any, shall be for the account of
the Warehousekeeper.
2.7.2 Samples for grading, and the related application for grading, must be
submitted directly to the Grading Room:
(a) in respect of a Parcel or Lot, within 56 calendar days of the date on

which the sample was drawn;
(b) in respect of a Standard Delivery Unit or Large Delivery Unit, within

60 calendar days of the date on which the sample was drawn; and
(c) in respect of a Bulk Delivery Unit, within 60 calendar days of the date
on which the first incremental sample forming part of the preliminary
sample was drawn.
2.7.3 The Exchange may at its sole discretion, designate the time or day at which
samples may be delivered to the Grading Room.
2.7.4 A member may request the Exchange to withdraw a sample submitted to the
Grading Room for grading in accordance with the Procedures detailed in
Section E of the G&WPs. Any such request must be made to the Grading
Room, and may be made orally, provided written confirmation is received by
the Exchange by no later than the close of business on the day on which the
request was made. Requests to withdraw samples submitted to the Grading
Room for grading may be made at any time prior to the day on which the
Grading Panel, convened for the purpose of grading the sample in question, is
scheduled to grade the sample.
2.7.5 Where a valid request to withdraw a sample submitted to the Grading Room
for grading has been received, the Exchange may charge the member
requesting the withdrawal a fee as prescribed from time to time by the
Exchange.
53
2.8.1 In respect of Standard Delivery Units and Large Delivery Units, Lotting
Account details shall include the following:
(a) Origin;
(b) Name of vessel, flight number, or identity of land carriage, as the case
may be;
(c) Number of bags comprising the Parcel or Lot;
(d) Warehouse in which stored;
(e) Final day of landing;
(f) Date on which delivery into the Warehouse was completed;
(g) Final day of original weighing;
(h) Gross weight, tare, total weight of sample, or samples, drawn, net,
weight and date on which last weighed;
(i) Warrant number;
(j) Date on which last sampled;
(k) Date of issue of the Bill(s) of Lading for the shipment of the Cocoa
from Origin, subject to Procedure D 2.8.3;
(l) Name of the Supervision Company instructed to supervise the drawing

of the sample in instances where the Exchange has nominated a
Supervision Company under Procedure D 1.5.1;
(m) whether the Delivery Unit is subject to preferential or non-preferential

rate of duty; and
(n) Where the Delivery Unit is subject to preferential duty, that the
documents referred to in the relevant contract terms are available in
accordance with those terms.
2.8.2 In respect of Bulk Delivery Units, Lotting Account details shall include the
following:
(a) Origin;
(b) Name of vessel(s), flight number(s), and/or identity of land carriage(s),

as the case may be;
54
(c) Warehouse in which stored;
(d) Final day of landing;
(e) Date on which delivery into the Warehouse was completed;
(f) Final day of original weighing;
(g) Gross weight, tare, total weight of sample, or samples, drawn, net
(h) Warrant number;
(i) Date of issue of the Bill(s) of Lading for the shipment of the Cocoa
from Origin, subject to Procedure D 2.8.3;
(j) Date on which last sampling was completed;
(k) The name of the Supervision Company instructed to supervise the

drawing of the sample in instances where the Exchange has nominated
a Supervision Company under Procedure D 1.5.1;
(l) Whether the Delivery Unit is subject to preferential or non-preferential

rate of duty; and
(m) Where the Delivery Unit is subject to preferential duty, that the
documents referred to in the relevant contract terms are available in
accordance with those terms.
2.8.3 In respect of Procedures D 2.8.1. (k) and D 2.8.2. (i), where Cocoa has a final
day of landing on or prior to 31 March 2000, and where the date of issue of the
Bill(s) of Lading is unknown, such date shall be determined as being 30 days
prior to the final day of landing shown in the Lotting Account details. For the
avoidance of doubt, in respect of Cocoa having a final day of landing on or
after 1 April 2000, the actual date of issue of the Bill(s) of Lading must be
included in the Lotting Account details.
2.8.4 All Lotting Account details shall be input by the Warehousekeeper issuing the
Warrant in respect of that Parcel, Lot or Delivery Unit.
2.9.1 Pursuant to Procedure D 1.15.2 (e), the cost of fumigating and fogging Cocoa
stored in accordance with the Cocoa contract terms shall be for the account of
the Warehousekeeper. It is understood that the Warehousekeeper shall charge
a periodic fee, to cover the cost of fumigation and/or fogging, in addition to
the Rent that is charged.
55
2.9.2 In the event of LIFFE Registered Cocoa Graders finding live infestation in a
sample, the applicant member may submit a new sample together with
documentary evidence from the Warehousekeeper that the relevant Parcel, Lot
or Delivery Unit has been fumigated.
2.9.3 All Warrants tendered shall be endorsed by the Warehousekeeper to the effect
that fumigation and/or fogging fees have been paid in respect of the period up
to and including the Settlement Day and in the case of a Nominated Bulk
Delivery Unit up to the Conversion Settlement Day or the Extended
Conversion Settlement Day as the case may be.
2.9.4 Once the Warehousekeeper has charged a fumigation and/or fogging fee on
Cocoa, a fee may continue to be charged regardless of whether or not a current
Grading Result is in effect. Movement of the Cocoa for fumigation purposes,
shall be subject to Procedure D 1.22.
2.9.5 An Owner of Cocoa may only cease to pay the fumigation and/or fogging fee
if the Cocoa:
(a) is graded not tenderable and is de-listed from GATS;
(b) is sold commercially and de-listed from GATS; or
(c) is re-piled and de-listed from GATS.
2.9.6 If, within 28 days of being de-listed under the circumstances outlined in
Procedure D 2.9.5, the Cocoa is found to be infested, the cost of fumigation
shall be borne by the Warehousekeeper.
2.9.7 The cost of such fumigation and/or fogging shall be for the Owners account
where:
(a) the Cocoa stored in a Warehouse is sold other than under a Contract;
(b) a Phytosanitary Certificate is required; or
(c) the Owner requests the Cocoa to be fumigated, notwithstanding the

apparent absence of infestation,
2.9.8 If, under these Procedures, the Owner of the Cocoa is of the opinion that
fumigation is necessary to eradicate current infestation but the
Warehousekeeper disagrees, then, in order to establish the need for
fumigation, the Owner must provide either:
(a) an order from a local official body (e.g. Port Health Authority) that
fumigation must be carried out; or
56
(b) a report from a competent independent authority confirming that

fumigation is necessary.
If the local official body or the competent independent authority should deem
it unnecessary for the Cocoa to be fumigated all charges and fees in respect of
such inspections/reports will be for the account of the Owner of the Cocoa,
otherwise such costs, if any, shall be borne by the Warehousekeeper.
2.10 Conversion of a Delivery Unit
2.10.1 In addition to his obligations under Procedure D 1.17 a Warehousekeepers will

be required to identify a Delivery Unit that has been converted by including
the following designation in the relevant Lotting Account details:
(a) “DFB” (derived from Bulk);
(b) “DFL” (derived from Large); or
(c) “DFS” (derived from Standard).
2.10.2 The Owner of the Cocoa comprising a Delivery Unit listed on GATS may
instruct a Warehousekeeper to convert such a Delivery Unit provided that:
(a) the prior written consent of the Exchange is obtained and, subject to
Cocoa Contract Term 12.04(a), such Delivery Unit is not the subject of
a Tender; and
(b) such conversion is made in accordance with these Procedures and the
status of the Warehousekeeper.
2.10.3 A Warehousekeeper may:
(a) convert a Bulk Delivery Unit to Large and/or Standard Delivery Units,
or a Large Delivery Unit to Standard Delivery Units either:
(i) upon instruction from the Clearing House to the Seller to

convert a Delivery Unit in accordance with Cocoa Contract
Term 12.03; or
(ii) at the request of the Owner of the Cocoa; or
(b) convert Standard or Large Delivery Units to form a Large or Bulk

Delivery Unit at the request of the Owner of the Cocoa.
57
2.10.4 (a) A conversion of:
(i) a Bulk Delivery Unit into Standard and/or Large Delivery

Units; or
(ii) Standard and/or Large Delivery Units into a Bulk Delivery

Unit;
or
(b) the formation of a Bulk Delivery Unit from any other Cocoa (subject to
Procedures D 2.10.11 and D 2.10.12), for delivery under a Contract,
shall only be undertaken by a Dual Capacity Warehousekeeper.
2.10.5 (a) A conversion of:
(i) a Large Delivery Unit into Standard Delivery Units; or
(ii) Standard Delivery Units into a Large Delivery Unit; or
(b) the formation of a Standard or Large Delivery Unit from any other
Cocoa (subject to Procedures D 2.10.11 and D 2.10.12),
for delivery under a Contract, may be undertaken by either a Dual or Single

Capacity Warehousekeeper.
2.10.6 A Warehousekeeper storing a Bulk Delivery Unit shall ensure the availability
of bags meeting the criteria prescribed by the Exchange, in order to meet the
requirements to convert a Bulk Delivery Unit if so required by the Clearing
House in accordance with Cocoa Contract Term 12.03.
2.10.7 Upon conversion of an Original Delivery Unit:
(a) the Valid Grading Result for the Original Delivery Unit shall
immediately lapse, unless the Original Delivery Unit is a Nominated
Delivery Unit, in which case the Valid Grading Result for the
Nominated Delivery Unit shall, subject to Cocoa Contract Term 16.11,
apply to each Converted Delivery Unit;
(b) each Converted Original Delivery Unit shall be weighed;
(c) a new Warrant number for each Converted Original Delivery Unit shall
be issued by the Warehousekeeper in accordance with these
Procedures; and
(d) new Lotting Account details shall be input into GATS for each
Converted Original Delivery Unit in accordance with Procedure D 2.8.
58
2.10.8 A Converted Original Delivery Unit, which is not a Converted Delivery Unit,
may only be delivered under a Contract if it has been regraded in accordance
with these Procedures and a Valid Grading Result has been issued upon such
regrading.
2.10.9 If, as a result of a conversion, a Delivery Unit is moved by a Warehousekeeper

from one of its Warehouses to another, such Delivery Unit may only be
delivered under a Contract:
(a) if it is reweighed and revised Lotting Account details are input into
GATS prior to the day specified in the Administrative Procedures in
the Cocoa contract terms for the relevant Delivery Month; or
(b) in respect of a Converted Delivery Unit, if it is reweighed, and revised

Lotting Account details are input into GATS prior to the first Business
Day prior to the Conversion Settlement Day or the first Business Day
prior to the Extended Conversion Settlement Day, as the case may be,
for the relevant Delivery Month.
2.10.10 If, as a result of conversion, a Delivery Unit is moved out of the control of a
Warehousekeeper, such Delivery Unit may only be delivered against a
Contract if it is reweighed at the Warehouse of the new Nominated
Warehousekeeper or otherwise in accordance with these Procedures, revised
Lotting Account details are input into GATS, and it is regraded as tenderable.
2.10.11 The costs of converting a Delivery Unit shall be borne by the Owner of the
Cocoa comprising such Delivery Unit.
2.10.12 The Exchange may, at its absolute discretion, supervise the conversion of a
Delivery Unit.
2.11 Conversion of a Nominated Delivery Unit
2.11.1 Where the Owner of Cocoa comprising a Bulk Delivery Unit instructs a
Warehousekeeper to convert such Delivery Unit to Large and/or Standard
Delivery Units, the following Procedures shall apply:
(a) the Owner of the Cocoa shall advise the Warehousekeeper of the
identity of the Bulk Delivery Unit to be converted, and the type of
Delivery Units to which it is to be converted;
(b) the Warehousekeeper shall give the Exchange a minimum of one clear
business day notice of the commencement of the conversion process;
(c) during conversion, Cocoa comprising the Bulk Delivery Unit shall be
packed into bags meeting the criteria prescribed by the Exchange from
time to time. The bags shall be marked with the following
information:
59
(i) Origin of the Cocoa;
(ii) Shipment Period (as determined from the Lotting Account

details);
(iii) the name or identifying mark of the Warehousekeeper storing

the BDU; and
(iv) the letters “DFB” (derived from Bulk);
(d) the bagged Cocoa shall be palletised in accordance with the

requirements prescribed by the Exchange from time to time, and
moved to a Warehouse nominated by the Exchange for the storage of
Cocoa in bags. Upon arrival at such Warehouse, the Cocoa shall be
weighed and piled into the appropriate Delivery Units in accordance
with the requirements prescribed by the Exchange from time to time
and otherwise conforming with the requirements of the Cocoa contract
terms and these Procedures; and
(e) the Warehousekeeper shall, in a manner prescribed by the Exchange

from time to time, advise the Exchange of the new Lotting Account
details to be entered onto GATS and the Exchange shall give directions
as to which details shall be input into GATS by the Exchange, and
which by the Warehousekeeper.
2.11.2 Where the Owner of the Cocoa comprising a Large Delivery Unit instructs a
Warehousekeeper to convert such Delivery Unit to Standard Delivery Units,
the following Procedures shall apply:
(a) the Owner of the Cocoa shall advise the Warehousekeeper of the
identity of the Large Delivery Unit to be converted;
(b) the Warehousekeeper shall give the Exchange a minimum of one clear
(c) the Cocoa shall be weighed and piled into the appropriate Delivery
Units in accordance with the requirements prescribed by the Exchange
from time to time and otherwise conforming with the requirements of
the Cocoa contract terms and these Procedures; and
(d) the Warehousekeeper shall, in a manner prescribed by the Exchange

60
2.12 Conversion of an Original Delivery Unit
2.12.1 Where the Owner of Cocoa comprising a Bulk Delivery Unit instructs a
Warehousekeeper to convert such Delivery Units to Large and/or Standard
(a) the Warehousekeeper shall inform the Exchange of the details of the
instructions and request approval to convert the Delivery Unit;
(b) the Exchange shall not approve such conversion if the Delivery Unit
has been previously graded as not tenderable, or for any other reason at
the absolute discretion of the Exchange;
(c) the Warehousekeeper shall give the Exchange a minimum of one clear
(d) during conversion, Cocoa comprising the Bulk Delivery Unit shall be
packed into bags meeting the criteria prescribed by the Exchange from
time to time. The bags shall be marked with the following
information:
(i) Origin;
(ii) Shipment Period (as determined from the Lotting Account

details);
(iii) the name or identifying mark of the Warehousekeeper storing

the BDU; and
(iv) the letters “DFB” (derived from Bulk);
(e) the bagged Cocoa shall be palletised and moved to:
(i) a segregated area of the Warehouse if such Warehouse meets

the requirements outlined in Procedure D 1.16.8. or
(ii) to a Warehouse nominated by the Exchange for the storage of

Cocoa in bags.
The Cocoa shall be weighed and piled into the appropriate Delivery
Units conforming with the requirements of the Cocoa contract terms
and these Procedures; and
(f) the Warehousekeeper shall, in a manner prescribed by the Exchange

61
2.12.2 Where the Owner of Cocoa comprising a Large Delivery Unit instructs a
Warehousekeeper to convert such Delivery Unit to Standard Delivery Units,
the following Procedures shall apply:
(a) the Warehousekeeper shall inform the Exchange of the details of the
instructions and request approval to convert the Delivery Unit;
(b) the Exchange shall not approve such conversion if the Delivery Unit
has previously been graded not tenderable, or for any other reason at
the absolute discretion of the Exchange;
(c) the Warehousekeeper shall give the Exchange a minimum of one clear
and
(d) the Warehousekeeper shall, in a manner prescribed by the Exchange

2.12.3 Where the Owner of Cocoa comprising a Standard or Large Delivery Unit
instructs a Warehousekeeper to convert such Delivery Units to Large or Bulk
(a) the Warehousekeeper shall:
(i) inform the Exchange of the details of the instructions including:
(A) the Warrant numbers of the Delivery Units to be

converted and Warehouse in which each is stored;
(B) the Warehouse in which the resulting Delivery Unit is

to be stored;
(C) any further information which the Exchange may

request; and
(ii) request approval to convert the Delivery Unit;
(b) the Exchange shall not approve such conversion if any of the relevant
Delivery Units has previously been graded not tenderable, or for any
other reason at the absolute discretion of the Exchange; and
(c) upon receipt of the Exchange’s approval to convert the Delivery Unit,
the Warehousekeeper shall:
62
(i) in respect of the formation of a Bulk Delivery Unit:
(A) remove the Cocoa being converted to a Warehouse

nominated for the storage of bulk Cocoa;
(B) de-bag the Cocoa, weigh and pile it; and
(ii) in respect of the creation of a Large Delivery Unit, weigh such

delivery Unit and re-pile in accordance with Procedure D 2.1;
and if so instructed by the Owner of the Cocoa sample the Cocoa in

accordance with Procedures D 2.3 and D 2.4 or D 2.5, as the case may
be.
2.13 Rebagging of Cocoa in Unsound or Damaged Bags
2.13.1 In respect of a Standard Delivery Unit or Large Delivery Unit which is listed
on GATS and which is, or has been, the subject of a Valid Grading Result, the
Cocoa may be rebagged at the discretion of the Exchange where the fabric of
the bags comprising all or part of the Delivery Unit has become unsound or
damaged, providing the Cocoa contained in such bags remains sound.
2.13.2 In the event that such rebagging is required, the Warehousekeeper storing the
Cocoa shall inform the Exchange of the details, including the following
information:
(a) proof of the instructions from the Owner of the Cocoa to rebag such
Cocoa;
(b) the reason why rebagging is necessary;
(c) the Warrant number of the relevant Delivery Unit; and
(d) the approximate number of bags requiring rebagging
and request approval to rebag the Cocoa.
2.13.3 In considering such a request, the Exchange may require further information to
be provided by the Warehousekeeper. In the event that such rebagging is
authorised by the Exchange, it may, at its absolute discretion, supervise such
rebagging.
2.13.4 Where such rebagging occurs, the Warehousekeeper shall rebag the Cocoa into
bag(s) meeting the criteria prescribed by the Exchange from time to time.
Where the Exchange has appointed a supervisor, the rebagging shall only take
place in the presence of such supervisor.
63
2.13.5 The bag(s) into which the Cocoa is rebagged shall be marked with the mark or
marks of the original bag(s).
2.13.6 The Warehousekeeper shall amend the details on the Warrant for the Delivery
Unit to show the number of original bags which have been rebagged.
2.13.7 Upon the rebagging of any such Cocoa comprised in a Delivery Unit, any
Valid Grading Result for such Delivery Unit shall, subject to Cocoa contract
term 3.05(d), immediately lapse, unless the Exchange determines, in its
absolute discretion, that the Valid Grading Result shall continue to apply to
Cocoa contained in a Delivery Unit which has been rebagged in whole or in
part:
(a) as a consequence of one or more bags contained in the Delivery Unit

becoming damaged in the Warehouse or in transit; and
(b) in accordance with any instructions or other directions given by the

Exchange or the Clearing House.
2.13.8 The costs of rebagging Cocoa comprised in a Delivery Unit shall be borne by
the Owner of the Cocoa.
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3. ROBUSTA COFFEE
3.1 Piling of Robusta Coffee
3.1.1 Subject to Schedule 1 of these Procedures, in respect of Robusta Coffee listed

on GATS, the following storage requirements shall be observed:
(a) Each Parcel or Lot shall be stored on pallets at ground level, with the
exception of multi-storey Warehouses with wooden floors where the
bags of Robusta Coffee may be stored directly on the floor;
(b) The Robusta Coffee comprising a Parcel or Lot shall be stored, subject
to Procedure D 3.1.1(c) together in a single row or pile;
(c) Subject to Schedule 1 of these Procedures, where a Lot or Parcel is

composed of palletised bags, the bags on each pallet shall relate only to
that Lot or Parcel. Where there is a balance of bags making up a Parcel
or Lot which is insufficient to fill a pallet to capacity those remaining
bags shall be exclusively stored on a pallet which shall be marked in
accordance with Procedure D 3.2 and placed either on top of the
column of pallets comprising the majority of the Lot or Parcel or at the
end of the row in which the Lot or Parcel is piled;
(d) Robusta Coffee shall be stored with a gap of at least 45 centimetres:
(i) from any wall; and
(ii) from any other Robusta Coffee or other goods to allow

compliance with Procedure D 3.1.1 (e); and
(e) at least 50% of the bags in a Parcel or Lot must be accessible for
sampling. Where the Parcel or Lot is composed of palletised bags
stored in columns or rows, at least one side of each pallet shall be
readily accessible for sampling.
3.1.2 A Lot may not, in whole or in part, be comprised of Robusta Coffee which
previously comprised a Lot graded as not tenderable.
3.2 Identification of a Parcel or Lot
3.2.1 Subject to Schedule 1 of these Procedures each Parcel or Lot shall be readily
identifiable by the Warehousekeeper and the Exchange officials. The
following minimum requirement for the identification of a Parcel or Lot shall
apply:
(a) A label, visible from the aisle side of the column and/or row shall be
securely fastened to either a bag lying on the first pallet of the storage
sequence or the pallet itself and shall show, as a minimum, the warrant
65
number relating to the Parcel or Lot and the number of bags

comprising the Parcel or Lot; and
(b) A bag on the bottom layer of bags of each pallet and visible from the
aisle side of the column and/or row shall be marked clearly, legibly and
indelibly on the fabric of the bag with the warrant number of the Parcel
or Lot.
3.3 Weighing of a Parcel or Lot
3.3.1 A parcel or Lot shall be weighed or reweighed:
(a) when the Parcel or Lot is piled for tendering;
(b) each time the Robusta Coffee contained in the Parcel or Lot is
rebagged in accordance with Procedure D 3.8; and
(c) each time the Parcel or Lot is moved or is the subject of a change in
control, in accordance with Procedures D 1.19 to D 1.24, as the case
may be.
3.3.2 Subject to Administrative Procedure 9 (b) of the Robusta Coffee Futures

Contract, Robusta Coffee may not be tendered more than twelve months after
the last day of the month in which it was last weighed or reweighed. If such
period has expired the Robusta Coffee shall, at the seller’s expense, be
reweighed before delivery and the lotting account updated accordingly.
3.3.3 The tare weight of the bags shall be that ascertained when the goods were
originally entered into GATS.
3.4 Sampling of a Parcel or Lot
3.4.1 In respect of a Parcel or Lot which is to be graded pursuant to Section E of

these Procedures, the member or, if he is not the Owner of the Robusta Coffee,
the Owner on whose behalf the member is making the application for grading,
shall instruct the Warehousekeeper in writing to draw a sample from the
Parcel or Lot to be graded.
3.4.2 Where the Warehousekeeper has provided sampling notification to the

Exchange on any business day by 12:00 hours London time, sampling may
commence on the following business day. Where sampling notification is
received after this time, sampling may only begin on the second business day.
The Warehousekeeper shall:
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(a) draw the sample in accordance with these Procedures;
(b) upon completion of drawing the sample, send the sample direct to the
Grading Room, for assessment by a Grading Panel appointed by the
Exchange;
(c) input the Lotting Account details onto GATS dated no later than two
business days after the date of the drawing of the sample; and.
(d) if the Parcel or Lot has been formed from Robusta Coffee newly
arrived at the Warehouse and has been sampled under the provisions of
Procedure D 1.5, inform the Exchange no later than two business days
after the date of the drawing of the sample of the number of the
warrant which represents that Parcel or Lot.
.
3.4.3 Subject to Procedure D 1.5.7 and D 1.5.8, if sampling is to occur outside of
normal Port working hours and that the sampling is deemed to require
supervision, then this is to occur at times mutually agreed between the
Warehousekeeper and the Exchange.
3.4.4 Before sampling, the Parcel or Lot identified correctly in accordance with
Procedure D 3.2 shall be inspected by the Warehousekeeper and, if supervised,
the Supervision Company shall confirm:
(a) that the Goods comply with Procedure 3.1; and
(b) all sampling apparatus is clean, dry and free from foreign odours.
3.4.5 Where the conditions of Procedure D 3.4.4 are not met the Warehousekeeper
or, if supervised, the Supervision Company shall immediately contact the
Exchange which shall determine what action shall be taken before sampling
can commence.
3.4.6 Any sample to be presented to the Grading Room shall be drawn and sealed,
all of which is to occur on the same day.
3.4.7 Each Lot shall comprise of not more than two Parcels of Robusta Coffee.
Where a Lot is to be formed of two Parcels, a sample from each Parcel must be
submitted for grading and both samples must be covered by a Valid Grading
Result for the Lot to be tenderable. Where a sample relating to a Parcel is
graded not tenderable then the whole Lot comprising of both Parcels shall be
not tenderable. The Parcel comprising such Lot which was graded as
tenderable may not be combined with another tenderable Parcel to form a
tenderable Lot.
3.4.8 In respect of each sample drawn from a Parcel or Lot:
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(a) a sample of 3 kg minimum weight shall be drawn which ; shall be

representative of the Parcel or Lot as a whole, and shall be taken
randomly from a minimum of 50% of the number of sound bags
forming the Parcel or Lot and over the full height and width of the
Parcel or Lot directly into a clean, dry, empty and odourless cotton or
linen sample bag; with a tare not exceeding 100 g to be presented to
the LIFFE Grading Room.
(b) The sample bag shall be sealed with the Warehousekeeper’s seal and
also if supervised the Supervision Company’s seal. The following
minimum details shall be marked on the bag:
(i) the Warehousekeeper responsible for drawing the sample;
(ii) Warrant number;
(iii) Port;
(iv) date on which sample was drawn.
3.5.1 A Warehousekeeper shall draw a sample in accordance with Procedure D 3.4,

and shall submit such sample directly to the Grading Room for grading.
Customs duties, if any, shall be for the account of the Warehousekeeper.
3.5.2 Samples for grading, and the related application for grading, must be
submitted directly to the Grading Room within 28 calendar days of the date on
which they were drawn.
3.5.3 The Exchange may at its sole discretion, designate the time or day at which
samples may be delivered to the Grading Room.
3.6.1 Lotting Account details shall include the following:
(a) Origin;
(b) Name of vessel, flight number, or identity of land carriage, as the case
may be;
(c) Number of bags comprising the Parcel or Lot;
(d) Warehouse in which stored;
(e) Final day of landing;
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(f) Date on which delivery into the Warehouse was completed;
(g) Final day of original weighing;
(h) Gross weight, tare, total weight of sample, or samples, drawn, net
(i) Warrant number;
(j) Date on which last sampled;
(k) The name of the Nominated Supervisor instructed to supervise the

drawing of the sample in instances where the Exchange has nominated
a Supervisor under Procedure D 1.5;
(l) Whether the Parcel or Lot is subject to preferential or non-preferential

rate of duty; and
(m) Where the Parcel or Lot is subject to preferential duty, that the
documents referred to in the contract terms are available in accordance
with those terms.
3.6.2 All Lotting Account details shall be input by the Warehousekeeper issuing the
Warrant in respect of that Parcel or Lot.
3.7.1 Pursuant to this Procedure D 1.15.2 (e), the cost of fumigating and fogging of
Robusta Coffee stored in accordance with the Robusta Coffee contract terms
shall be for the account of the Warehousekeeper.
3.7.2 In the event of LIFFE Registered Robusta Coffee Graders finding live
infestation in a sample, the Owner of the Robusta Coffee may submit a new
sample together with documentary evidence from the Warehousekeeper that
the relevant Parcel or Lot has been fumigated.
3.7.3 The cost of such fumigation and/or fogging shall be for the Owners account
Where:
(a) the Robusta Coffee stored in a Warehouse is sold other than under a
Contract; or
(b) a Phytosanitary Certificate is requited; or
(c) the Owner requests the Robusta Coffee to be fumigated

notwithstanding the apparent absence of infestation.
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3.7.4 If, under these Procedures, the Owner of the Robusta Coffee is of the opinion
that fumigation and/or fogging is necessary to eradicate current infestation but
the Warehousekeeper disagrees, then, in order to establish the need for
fumigation and/or fogging, the Owner must provide either:
(a) an order from a local official body (e.g. Port Health Authority) that
fumigation must be carried out; or
(b) a report from a competent independent authority confirming that

fumigation and/or fogging is necessary.
If the local official body or the competent independent authority should deem
it unnecessary for the Robusta Coffee to be fumigated and/or fogged all
charges and fees in respect of such inspections/reports will be for the account
of the Owner of the Robusta Coffee, otherwise such costs, if any, shall be
borne by the Warehousekeeper.
3.8 Rebagging of Robusta Coffee in Unsound or Damaged Bags
3.8.1 Robusta Coffee stored in a Parcel or Lot which is listed on GATS and which
is, or has been, the subject of a Valid Grading Result may be rebagged at the
discretion of the Exchange where the fabric of the bags comprising all or part
of the parcel has become unsound or damaged, providing the Robusta Coffee
contained in such bags remains sound. Rebagging shall only be permitted in
circumstances where the Robusta Coffee has been shipped in bags from origin.
3.8.2 In the event that such rebagging is required, the Warehousekeeper storing the
Robusta Coffee shall inform the Exchange of the details, including the
following information:
(a) proof of the instructions from the Owner of the Robusta Coffee to
rebag such Robusta Coffee;
(b) the reason why rebagging is necessary;
(c) the Warrant number of the relevant Parcel or Lot; and
(d) the approximate number of bags requiring rebagging
and request approval to rebag the Robusta Coffee.
3.8.3 In considering such a request, the Exchange may require further information to
be provided by the Warehousekeeper. In the event that such rebagging is
authorised by the Exchange, it may, at its absolute discretion, supervise such
rebagging.
3.8.4 Where such rebagging occurs, the Warehousekeeper shall rebag the Robusta
Coffee into bag(s) meeting the criteria prescribed by the Exchange from time
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to time. Where the Exchange has appointed a supervisor, the rebagging shall
only take place in the presence of such supervisor.
3.8.5 The bag(s) into which the Robusta Coffee is rebagged shall be marked with the
mark or marks of the original bag(s).
3.8.6 The Warehousekeeper shall amend the details on the Warrant for the Parcel or
Lot to show the number of original bags which have been rebagged.
3.8.7 Upon the rebagging of any such Robusta Coffee comprised in a Parcel or Lot,
any Valid Grading Result for such Parcel or Lot shall immediately lapse,
unless the Exchange determines, in its absolute discretion, that the Valid
Grading Result shall continue to apply to Robusta Coffee comprised in a
Parcel or Lot which has been rebagged in whole or in part:
(a) as a consequence of one or more bags contained in the parcel

becoming damaged in the Warehouse or in transit; and
(b) in accordance with any instructions or other directions given by the

Exchange or the Clearing House.
3.8.8 The costs of rebagging Robusta Coffee comprised in a parcel shall be borne by
the Owner of the Robusta Coffee.
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Section E
Grading Procedures in respect of Cocoa and Robusta Coffee
1. GENERAL
1.1 LIFFE Grading Operations
1.1.1 The grading operations necessary to support the LIFFE Cocoa Futures and
Robusta Coffee Futures Contracts are managed by the Exchange’s Market
Operations Department.
1.1.2 In respect of grading operations, the Market Operations Department is

responsible for:
(a) maintaining a list of suitably qualified and Registered Graders;
(b) convening Grading Panels and Appeal Panels;
(c) supervising the grading and appeal process, where necessary;
(d) recording and disseminating Grading Results; and
(e) overseeing the return of a graded sample to an applicant or his

appointed agent.
1.2 Application and Qualification as a LIFFE Registered Cocoa or Robusta

Coffee Grader
1.2.1 To be registered with the Exchange as a LIFFE Registered Cocoa or Robusta

Coffee Grader, an individual must complete an application in the form
prescribed by the Exchange from time to time. The Exchange will determine,
in its absolute discretion, whether the applicant is suitable and if so, the
applicant will be invited to attend either a Cocoa or Robusta Coffee grading
course, as the case may be, held by the Exchange. Such courses are held by
the Exchange at such times and at such cost to the applicant as the Exchange
may determine in its absolute discretion.
1.2.2 An employee of, or a person in regular employment by a Warehousekeeper or

Supervision Company is ineligible to be registered as a Grader, as such person
may have a potential conflict of interest.
1.2.3 Registered Cocoa or Robusta Coffee graders, who may be employees of the
Exchange, must on completion of the grading course, undertake the written
and practical examinations prescribed by the Exchange.
1.2.4 All applicants who successfully complete the examination process must sign a
Grader’s Letter of Undertaking before undergoing a series of “grading
72
observations”, the nature and duration of which shall be determined by the

Exchange.
1.2.5 Notwithstanding that an applicant has complied with Procedures E 1.2.1 to

1.2.4, the Exchange may, in its absolute discretion, deny the applicant
registration as a LIFFE Registered Cocoa or Robusta Coffee Grader.
1.2.6 The Exchange may require a Grader to undergo a series of grading

observations as specified in Procedure E 1.24, if the Grader has not
participated in a Grading Panel for six months or more.
1.3 Conduct of Graders
1.3.1 A Grader must act in accordance with the standards required by these
Procedures and the Grader’s Letter of Undertaking.
1.3.2 During the course of grading, whilst conducting other duties pertaining to their
office or while on the Exchange’s premises, a Grader shall maintain the
highest standards of professional conduct and orderly behaviour.
1.3.3 Where a Grader is called to join a Grading Panel or Appeal Panel, as the case
may be, and the Grader is, or becomes, aware that the company of which he is
an employee, or any Related Company, has an interest in Cocoa or Robusta
Coffee that is the subject of the relevant application for grading, he shall
inform the Exchange of such interest immediately. The Exchange shall either:
(a) arrange for the Grading Panel or Appeal Panel, as the case may be, of
which such Grader is a member, to grade samples in which there is no
such interest; or
(b) defer grading until such time as another Grading Panel or Appeal
Panel, as the case may be, can be constituted, or where circumstances
are such that grading cannot be deferred, call another Grader to replace
the Grader on the relevant Grading Panel or Appeal Panel.
1.3.4 If a member of a Grading Panel or Appeal Panel is believed, in the opinion of

a Senior Grader or a member of the Market Operations Department, as the
case may be, or an exchange official, to be under the influence of alcohol or
drugs, such Grader will not be permitted to undertake grading on behalf of the
Exchange.
1.3.5 While in the Grading Room, a Grader must refrain from behaviour which
might distract any member of another Grading Panel or Appeal Panel.
1.3.6 A Grader should not observe the grading taking place at other Grading
Stations or confer with other Graders not forming part of his Grading Panel or
Appeal Panel, in respect of samples that such Grading Panel or Appeal Panel
are grading. A Senior Grader may upon request, however, give his advice or
73
opinion to another Grading Panel if it has been sought. If the Senior Grader
whose opinion is sought knows he has an interest in the relevant sample he
must decline to give such advice or opinion.
1.3.7 A member of the Market Operations Department may stop or suspend grading
at any time, if he considers that the Rules or these Procedures are being
breached, or that the fairness of the grading of any sample has been
compromised.
1.3.8 If a member of the Market Operations Department has reason to believe that a
Grader has acted or is acting in breach of the Rules or these Procedures, then
the Exchange will inform the Senior Grader of the relevant Grading Panel or
Appeal Panel and consult with him as to the course of action that should be
taken.
1.3.9 If a member of the Market Operations Department has reason to believe that a
Senior Grader has acted or is acting in breach of the Rules or these Procedures
then the Head of Market Operations, as the case may be, must be informed as
soon as possible of the suspected breach, and of the resulting action taken by
the Exchange.
1.3.10 A Grader must not remove samples of Cocoa or Robusta Coffee from the
Grading Room.
1.3.11 Graders must leave the Grading Room promptly once they have completed
grading the samples allocated to their Grading Panel or Appeal Panel, as the
case may be.
1.3.12 Smoking or eating in the Grading Room is prohibited.
1.3.13 A Grader who fails to follow these Procedures, may be liable to further
investigation. Should such an investigation provide evidence that the Grader
has breached the Rules or these Procedures then the Exchange shall take such
disciplinary action it deems appropriate, which may include de-registration.
Any such disciplinary action will only be imposed after the Grader concerned
has been given a fair and appropriate opportunity to present his case to the
Exchange.
1.4 Interested parties
1.4.1 A Grader who is employed by, or otherwise associated with, a company which
is an interested party with regard to any Parcel, Lot or Delivery Unit, shall not
be appointed to, and must not knowingly participate in, a Grading Panel or an
Appeal Panel in respect of such Parcel, Lot or Delivery Unit. Whether such
association exists shall be at the sole determination of the Exchange.
1.4.2 The following are interested parties for the purpose of Procedure E 1.4.1:
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(a) the applicant for grading;
(b) the Owner of the Goods; and
(c) where either the applicant or Owner of the Goods is a company, a

Related Company.
1.4.3 Notwithstanding Procedures E 1.4.1 and E 1.4.2, a Grading Result shall not be
invalidated in the event that the Parcel, Lot or Delivery Unit to which it
applies is subsequently received, by way of tender against an Exchange
contract, by a company which employs, or is otherwise associated with a
Grader who participated in the grading of such Parcel, Lot or Delivery Unit.
1.5 Termination of Registration as a Grader
1.5.1 The registration of a Grader may be terminated:
(a) upon such notice as the Exchange may deem expedient, if the Grader
does not continue to meet the criteria for registration as determined by
the Exchange in its absolute discretion; or
(b) either summarily or upon such notice as the Exchange may in its
absolute discretion deem expedient, if the Grader’s acts, or the
Grader’s failure to act, is in breach of the requirements of the Rules,
the Graders’ Letter of Undertaking or these Procedures and, as a
consequence of disciplinary action by the Exchange, the Exchange
determines such termination is appropriate.
1.5.2 If a Grader wishes to resign from being a LIFFE Registered Cocoa or Robusta
Coffee Grader, the Grader must give four weeks notice to the Exchange. A
Grader must comply with any conditions the Exchange may impose on his
resignation.
1.6 Grading and Appeal Panels
1.6.1 On receiving an application for grading or notice of an appeal in respect of a

Grading Result, the Exchange will, at its absolute discretion, convene a
Grading Panel or Appeal Panel, respectively, from the list of the LIFFE
Registered Cocoa or Robusta Coffee Graders, as the case may be, who are
eligible to grade. The Exchange will endeavour to ensure that each Grading
Panel or Appeal Panel includes a Senior Grader. In the event that a Senior
Grader is not available the Exchange shall, in consultation with the Chairman
of the LIFFE Registered Cocoa or Robusta Coffee Graders as the case may be,
designate a Grader as a Senior Grader in respect of the Grading Panel or
Appeal Panel in question.
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1.6.2 The Exchange will as far as practicable select a LIFFE Registered Cocoa or
Robusta Coffee Grader, as the case may be, to form part of a Grading Panel or
Appeal Panel in rotation provided that:
(a) not more than one Grader from the same company, or a Related
Company, will be selected to form the same Grading Panel or Appeal
Panel;
(b) a Grader who is an employee of the member, or a Related Company,

submitting an application for grading or, if such member is not the
Owner of the Goods from which the sample was drawn, then the
Owner of such Goods, or a Related Company, shall not form part of
the Grading Panel or Appeal Panel undertaking the grading of such
sample; and
(c) a Grader will not form part of an Appeal Panel if such Grader formed
part of the Grading Panel that originally graded such sample.
A list of Registered Cocoa and Robusta Coffee Graders will be

published by the Exchange from time to time by London Notice.
1.7 Grading Appeals
1.7.1. In respect of:
(a) Cocoa, the applicant member may appeal the Grading Result issued by
the Exchange provided such appeal is made in accordance with these
Procedures and within twenty business days after the date of the
Grading Result; and
(b) Robusta Coffee, there shall be no appeal in respect of a Parcel or Lot

graded as tenderable. The applicant member may appeal the Grading
Result in respect of a Parcel or Lot graded as not tenderable, provided
such appeal is made in accordance with these Procedures and within
five business days after the date of the Grading Result.
1.7.2. An appeal may only be lodged by the applicant member. A written notice of
appeal shall be sent to the Exchange and shall include a clear statement of the
grounds on which the appeal is made and shall be accompanied by:
(a) the appeal fee prescribed by the Exchange from time to time; and
(b) details of the relevant Warrant number.
1.7.3 In respect of:
(a) Cocoa, the original sample shall be submitted within twenty business
days after the date of the Grading Result; and
76
(b) Robusta Coffee, the original sample shall be submitted within ten
business days after the date of the Grading Result.
In all cases the original sample must be submitted with the Exchange’s seal
intact. Where such a seal is broken, an appeal will not be undertaken.
1.7.4 Grading appeals shall be conducted on the sample originally submitted for
grading.
1.7.5 If the Appeal Panel decide that the original decision of the Grading Panel
should be changed, the previous Grading Result will cease to be valid. The
Exchange shall notify the applicant member of the appeal Grading Result by
such means and in a form prescribed by the Exchange from time to time.
1.8 Grading and Appeal Fees
1.8.1 The fee payable in respect of an application for grading a Delivery Unit of
Cocoa or a Parcel or Lot of Robusta Coffee or in respect of a notice of appeal,
as the case may be, shall be prescribed from time to time by the Exchange. It
shall be payable on demand, or at such other time and in such manner as may
be prescribed by the Exchange from time to time.
1.8.2 Appeal fees in respect of grading appeals conducted in accordance with the:
Cocoa and Robusta Coffee Contract Terms shall not be reimbursed to the
applicant in any circumstances.
1.8.3 The Exchange shall pay to the members of a Grading Panel or Appeal Panel
such fee as it shall from time to time determine.
1.9 Liability for Grading
1.9.1 Without prejudice to any exclusion of liability provision in the Rules, neither
the Exchange nor the Board shall be liable for any loss or damage whatsoever,
whether for negligence, breach of contract, misrepresentation or otherwise, in
respect of the failure to grade a sample of Cocoa or Robusta Coffee or to issue
a Grading Result by a particular date.
1.9.2 Nothing in this Procedure shall operate to exclude or restrict the liability of the
Exchange or the Board for fraud or wilful default.
1.9.3 No person serving on any Grading Panel or Appeal Panel shall, in the absence
of bad faith or wilful default, be under any liability whatsoever whether in
contract, in tort or otherwise to any member or other person for any decision
taken or other act or omission in respect of an application for grading.
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1.10 Application for Grading or Regrading
1.10.1 An application for grading or regrading, as the case may be, shall be made by
a member, via GATS.
1.10.2 A member may apply to the Exchange for grading or regrading, as the case
may be, of a Parcel, Lot or Delivery Unit:
(a) if, in respect of Cocoa, and subject to Procedure E 2.1:
(i) the Delivery Unit does not have a Valid Grading Result; or
(ii) the Delivery Unit does have a Valid Grading Result and the
application for grading is made no earlier than the beginning of
the calendar month immediately prior to the calendar month in
which the Valid Grading Result expires;
(b) in respect of Robusta Coffee, and subject to Procedure E 1.10.4, at any

time; and
(c) irrespective of the usual validity period of a Grading Result, the current
Grading Result in respect of Robusta Coffee which is the subject of an
application for regrading in accordance with Procedure E 1.10.2(b) or
Cocoa which is the subject of an application for regrading in
accordance with Procedure E.1.10.2 (a) shall immediately lapse upon
commencement of such regrading.
1.10.3 In respect of Cocoa, no application for regrading of a Delivery Unit may be

made where the Cocoa comprising the Delivery Unit has previously been
graded as not tenderable.
1.10.4 In respect of Robusta Coffee, no application for regrading of a Parcel or Lot

may be made where the Robusta Coffee comprising the Parcel or Lot has
previously been graded as not tenderable.
1.11 Grading Process – General
1.11.1 Upon receipt of one or more applications for the grading of Goods pursuant to
the relevant contract terms and these Procedures, or if otherwise required to do
so under Procedure E 1.7, the Exchange shall, at its absolute discretion,
convene a Grading Panel or Appeal Panel, as the case may be. Such Grading
Panel or Appeal Panel shall consist (subject to Procedure E 1.6.2) of a
minimum of:
(a) three Cocoa Graders in respect of a Delivery Unit;
(b) three Robusta Coffee Graders in respect of a Parcel or Lot.
78
1.11.2 In respect of each Lot, Parcel or Delivery Unit for which an application for
grading is made, the Grading Panel shall examine the sample submitted and
shall determine the Grading Result.
1.11.3 Grading will only commence once all the Graders selected to form a Grading
Panel or Appeal Panel are present at the relevant Grading Station, and ready to
commence.
1.11.4 Prior to grading commencing, the Grading Panel will check that:
(a) the details on the sample bag correspond to the details on the grading
application sheet;
(b) the seal(s) on the sample is/are in place and intact; and
(c) the sample does not weigh less than the weight prescribed in these
Procedures for a sample from the relevant Parcel, Lot or Delivery Unit.
In addition, the Grading Panel may check that the tare weight of the sample
bag does not exceed the weight prescribed in these Procedures for a sample
from the relevant Parcel, Lot or Delivery Unit.
1.11.5 If the details on a sample bag do not correspond to those on the relevant
application for grading, a member of the Market Operations Department will
advise the applicant member. The applicant member, or, if he is not the
Owner of the Goods, the Owner on whose behalf the member is making the
application for grading, may arrange for either the Warehousekeeper, or his
appointed agent, to alter the details on the sample bag and initial and stamp the
alteration. Where alterations are required to be made to Lotting Account
details, the Warehousekeeper shall provide details of such alterations to a
member of the Market Operations Department, who shall advise on action to
be taken in respect of GATS.
1.11.6 If in the opinion a member of the Market Operations Department, or the

Grading Panel, the sample bag is insecure, incorrectly sealed, appears to have
been tampered with or a sample weighs less than the correct weight prescribed
for a sample from the relevant Parcel, Lot or Delivery Unit, such sample shall
not be graded. The applicant member will be informed of such fact and they,
or the Owner of the Goods may, instruct the Warehousekeeper to draw a fresh
sample in accordance with the Rules, the relevant contract terms, and these
Procedures and may then submit a new application for grading in respect of
the relevant Parcel, Lot or Delivery Unit.
1.11.7 The original sample shall be held by the Exchange until either a fresh sample
is received, or until sixty calendar days has elapsed, whichever is the sooner.
At such time, the applicant member may, subject to the agreement of the
Exchange, arrange for the sample to be collected from the Grading Room. If,
79
however, it is suspected that a sample has been tampered with then it will be
held for further investigation by the Market Operations Department.
1.11.8 If the Grading Panel determine, in their absolute discretion, that the sample
contents do not correspond with the details on the sample bag and the relevant
application for grading, the Grading Panel shall immediately advise a member
of the Market Operations Department. The member of the Market Operations
Department shall consult with the Senior Grader of the relevant Grading Panel
and determine the course of action that should be taken. If the Senior Grader
and the a member of the Market Operations Department are unable, for
whatever reason, to agree a course of action the matter shall be immediately
referred to the Head of the Exchange’s Market Operations Department who
will determine what action shall be taken by the Exchange. The applicant
member will be informed of the course of action determined by the Exchange.
1.11.9 Should at any time a Grading Panel discover live infestation in a sample, the
grading of that sample will be discontinued and the sample contents will be
returned to the sample bag which shall be sealed and marked as having live
infestation. The grading sheet will be marked accordingly and a member of
the Market Operations Department will instruct the applicant member to make
arrangements for the sample to be removed within 24 hours. If the member
fails to remove the sample within 24 hours of notification, the Exchange may,
at its absolute discretion, arrange for its disposal. Subject to Procedure D
2.9.2 or 3.7.2, as the case may be, a member may submit a new sample of the
relevant Parcel, Lot or Delivery Unit for grading in accordance with Procedure
E 1.10.
1.11.10 Where a Lot comprises of two Parcels and live infestation is discovered in the
sample relating to one Parcel only, then the Grading Panel shall continue to
grade the sample in respect of the other Parcel comprising such Lot. The
Exchange shall notify the applicant member of the Grading Result in respect
of the uninfested Parcel by such means and in a form prescribed by the
Exchange from time to time.
1.11.11 Subject to Procedures D 2.9.2 or D 3.7.2, as the case may be, a member may
submit a new sample in accordance with Procedure E 1.10, in respect of the
Parcel which is infested.
1.11.12 Prior to leaving the Grading Room, the Senior Grader will ensure that each
member of the Grading Panel or Appeal Panel on which he has served has
signed the grading sheet. The grading sheet must only be signed once grading
has been completed and all results recorded.
1.11.13 Once grading of each sample is completed, the Exchange will re-seal such
sample with the Exchange’s seal. The applicant member, or his appointed
agent, will be contacted to arrange collection of the sample. Should the
sample not be collected promptly, it shall become the property of the
80
Exchange who may, at its absolute discretion, arrange for its storage or
disposal.
1.11.14 Following completion of grading, the Exchange shall in respect of:
(a) Cocoa, notify the applicant member and if so determined by the

Exchange also notify the Warehousekeeper; or
(b) Robusta Coffee, notify the applicant member and the

Warehousekeeper;
of the Grading Result in respect of the Parcel, Lot or Delivery Unit which is
the subject of the application, by such means and in a form prescribed by the
Exchange from time to time. If the Exchange notifies the member of the
Grading Result via GATS and the member is unable to access such facility, or
is prevented from accessing such facility due to its malfunction or failure, the
Exchange may prescribe an alternative means and, if required, form in which
the Grading Result will be provided to the member.
1.11.15 In respect of Robusta Coffee, where a Lot comprises of two Parcels, the Valid
Grading Result of such Lot shall state the discounts applicable, if any, in
respect of the inferior Parcel. Where such Parcel is graded as not tenderable
then the whole Lot comprising of both Parcels shall not be tenderable.
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2. COCOA
2.1 General
2.1.1 If a Parcel or Lot is graded by LIFFE Registered Cocoa Graders as not

tenderable under the previous Cocoa contract terms, a member may submit
such Cocoa as part or all of a Delivery Unit for regrading under the revised
Cocoa contract terms.
2.1.2 If a Delivery Unit is graded by LIFFE Registered Cocoa Graders as not

tenderable under the Cocoa contract terms, a member shall not submit such
Delivery Unit for regrading under the Cocoa contract terms, except in
accordance with the following:
A member may, on one occasion only, apply to the Exchange for regrading of
a Delivery Unit where a previous application resulted in the sample being
graded as not tenderable. This Procedure will only apply where both of the
following conditions are satisfied:
(a) where the original sample was graded as not tenderable under the
terms of the revised Cocoa contract terms in the period from 1
November 1999 to and including 31 May 2001; and
(b) where the reason, marked on the Grading Result, for the sample being
graded as not tenderable was indicated to be “Residue”.
Notwithstanding the above, the Exchange may, in its absolute discretion,

require members to provide it with such other documentary evidence as the
Exchange considers necessary in order to satisfy the Exchange that the
member meets the requirements detailed above.
2.2 Grading Process
2.2.1 Residue and Foreign Matter Test
2.2.1.1 A member of the Grading Panel shall, having satisfied himself that all seals
are intact, break the sample-seal(s) and shall sieve the entire sample, using a
sieve with a square mesh of 6mm. The Residue and Foreign Matter falling
through the sieve, as well as any Residue and Foreign Matter remaining in the
sieve but identified by the Graders as being Residue or Foreign Matter, shall
be weighed and such weight shall be marked on the grading sheet.
A sample drawn from a Bulk Delivery Unit or Large Delivery Unit (i.e. 5 kg
or 3 kg respectively), shall be sieved in two halves and the resulting weight of
Residue (but excluding bean clusters) and Foreign Matter added together.
An allowance will be awarded against the weight of the Residue and Foreign
Matter marked on the grading sheet by reference to the relevant scale of
82
Allowances for Residue and Foreign Matter where the quantity of Residue and
Foreign Matter does not exceed:
(a) in respect of all Origins other than Papua New Guinea:
(i) 75 grams for a sample drawn from a Standard Delivery Unit;
(ii) 113 grams for a sample drawn from a Large Delivery Unit; or
(iii) 188 grams for a sample drawn from a Bulk Delivery Unit.
and
(b) in respect of Papua New Guinea:
(i) 100 grams for a sample drawn from a Standard Delivery Unit;
(ii) 150 grams for a sample drawn from a Large Delivery Unit; or
(iii) 250 grams for a sample drawn from a Bulk Delivery Unit.
If the quantity of Residue and Foreign Matter marked on the grading sheet
exceeds the applicable weight for the relevant Origin set out in (a) or (b)
above, the sample shall be graded as not tenderable and the affected Delivery
Unit cannot be delivered.
2.2.1.2 If, by looking at the contents of the sieve, the Graders are of the opinion that
there are excessive bean clusters in the sample, the bean clusters identified in
the sieve shall be weighed and an Allowance will be made if, in respect of a
sample drawn from a:
(a) Standard Delivery Unit, 52 grams or more in weight of bean clusters

are identified;
(b) Large Delivery Unit, 78 grams or more in weight of bean clusters are
identified; or
(c) Bulk Delivery Unit, 130 grams or more in weight of bean clusters are
identified.
In each case, the resulting gross weight of bean clusters shall be marked on the
grading sheet.
For the purpose of calculating any Allowance for bean clusters, the gross
weight stated on the grading sheet (if equal to or in excess of the applicable
amount in (a), (b) or (c)) shall be reduced by 50% (and rounded down, if
applicable, to the nearest whole gram). An Allowance in respect of the net
weight shall be determined by reference to the relevant scale of Allowances
83
for Residue and Foreign Matter entitled “Residue and Foreign Matter
Allowances (all origins except Papua New Guinea)”, irrespective of the Origin
of the Cocoa in the sample.
In the event that the gross weight of bean clusters stated on the grading sheet
is greater than:
(d) 150 grams for a sample drawn from a Standard Delivery Unit;
(e) 225 grams for a sample drawn from a Large Delivery Unit; or
(f) 375 grams for a sample drawn from a Bulk Delivery Unit;
the sample shall be graded as not tenderable and the affected Delivery Unit
cannot be delivered.
2.2.2 Standard Deviation of the Bean Count Test and Bean Count
2.2.2.1 This test is to be conducted on all Delivery Units in accordance with the
provisions of the Cocoa contract terms and these Procedures:
(a) the entire sample in respect of a Delivery Unit (i.e. 2 kg, 3 kg or 5 kg

for Standard, Large or Bulk Delivery Units respectively) will be
poured into a mixing container, hand mixed and passed through a
sample divider. A representative sub-sample of 300 g (“300 g Sub-
Sample”) will be withdrawn from the Cocoa which passed through the
sample divider. Any Residue or Foreign Matter remaining in the Sub-
Sample will be removed, weighed and replaced with whole beans of an
equivalent weight;
(b) three sieves, with a round mesh of 13mm, 11.5mm and 10.5mm
respectively, shall be assembled in descending mesh size order onto a
base and placed on the sieving machine. The 300 g Sub-Sample shall
be poured onto the upper sieve, and the sieves sealed;
(c) the sieving machine shall be set to 180rpm, and operated for three
minutes. After such time, the Cocoa beans retained on each sieve and
in the base shall be counted and weighed separately. Any Cocoa beans
remaining in the apertures of a sieve shall be deemed to be retained on
such sieve. Any Cocoa beans which subsequently fall through the
mesh when dismantling the sieve, shall be added to the numbers of
Cocoa beans from the sieve onto which they fall. The total weight of
the Cocoa beans retained in each sieve and in the base shall be rounded
down to the nearest 0.1 g.
In the event that any bean clusters are found on any of the sieves
following the sieving process, they shall be removed, weighed down
84
and replaced with whole beans of an equivalent weight and the sieving
process shall be repeated; and
(d) the information obtained in Procedure E 2.2.1 (c) including the number
of beans forming the 300g (the “bean count”) shall be marked on the
grading sheet.
2.2.3 Bean Count
2.2.3.1 For the purpose of determining the percentage of Defective and Slaty beans, a
quantity of Cocoa beans must be cut open along their full length, creating two
halves which clearly expose both cotyledons of the Cocoa bean for
examination. Cocoa beans have to be cleanly cut through the widest section
and shall not be cut whilst laying flat.
2.2.3.2 In respect of:
(a) an application for grading, the number of Cocoa beans cut per sample
will be as follows:
(i) in respect of a sample drawn from a Standard or Large Delivery

Unit, a minimum of 300 Cocoa beans will be cut; and
(ii) in respect of a sample drawn from a Bulk Delivery Unit, a

minimum of 500 Cocoa beans will be cut, or
(b) a grading appeal, the number of Cocoa beans cut per sample will be as
follows:
(i) in respect of a sample drawn from a Standard or Large Delivery

Unit, a minimum of 450 Cocoa beans will be cut; and
(ii) in respect of a sample drawn from a Bulk Delivery Unit, a

minimum of 750 Cocoa beans will be cut.
2.2.3.3 The number of Defective and Slaty Cocoa beans shall be marked on the
grading sheet.
2.2.4 Smoky/Hammy/Unsound Cocoa
2.2.4.1 Cocoa which is considered by the Grading or Appeal Panel:
(a) to have a smoky, hammy or other taint or smell;
(b) to contain a substance not inherent to Cocoa; or
(c) to be unsound,
85
will be graded as not tenderable and the grading sheet shall be marked
accordingly. Any such beans that have been cut shall not be returned to the
sample bag with the rest of the contents.
2.2.5 Cocoa graded as not tenderable
2.2.5.1 If, during the course of grading, a sample is found not to conform to the
contract requirements in any category, such sample shall be graded as not
tenderable and grading of the sample shall cease.
2.2.5.2 Delivery Unit which has been graded as not tenderable will be marked as such
on the grading sheet, and the grading sheet shall specify under which category
the sample has failed. In respect of gradings conducted pursuant to the Cocoa
contract terms and these Procedures, the grading sheet shall also be marked
with such information as will indicate at which stage of the grading process
for that particular category the Delivery Unit became not tenderable.
86
SCHEDULE 1
A. Goods which are placed into a Warehouse and listed on GATS for the first
time on or after 1 August 2006 shall be stored in accordance with Procedures
D 2.1.1 (c), D 2.1.1 (d), D 2.2.1 (a) (ii), D 2.2.1 (b) (ii), D 3.1.1 (c) and D 3.2.1
(b) of these Procedures.
B. With the exception of Goods covered by C below, Goods already in a

Warehouse and listed on GATS prior to 1 August 2006 shall be stored in
accordance with Procedures D 2.1.1 (d), D.2.2.1 (a) (i) and D 3.1.1 (c) with
effect from 1 August 2007.
C. In respect of Procedure D 2.1.1 (c), Cocoa comprising a Large Delivery Unit

which was in store prior to 1August 2006 may be stored in non adjoining piles
in the same Warehouse. Procedure D 2.1.1 (e) of these Procedures shall apply
to all non adjoining piles.
D. Subject to E below, Goods already in a Warehouse and listed on GATS prior

to 1 August 2006 shall be marked in accordance with Procedures D 2.2.1 (a)
(ii) and D 3.2.1 (b) on the next occasion that the Goods are reweighed,
following the effective date of these Procedures.
E. Goods already in a Warehouse and listed on GATS prior to 1 August 2006

shall be stored in accordance with Procedures D 2.2.1 (a) (ii) and D 3.2.1 (b)
with effect from 1 August 2009.
87

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LONDON INTERNATIONAL FINANCIAL FUTURES

AND OPTIONS EXCHANGE

Grading and Warehousekeeping Procedures in respect of

Issue Date: 18 May 2007

Section C Statements of Principle in respect of Warehousekeepers Nominated by

Section D Warehousekeeping Procedures in respect of Warehousekeepers and

1.1 LIFFE Warehousekeeping Operations

2.1 Piling of Cocoa

3.1 Piling of Robusta Coffee

Section E Grading Procedures in respect of Cocoa and Robusta Coffee

1.1 LIFFE Grading Operations

A Goods stored on or after 1 August 2006

B Goods in store prior to 1 August 2006

C Cocoa stored as Large Delivery Units prior to 1 August 2006

D Goods in store prior to 1 August 2006. Marking of a bag on the bottom

E Goods in store prior to 1 August 2006. Procedures effective from 1

1. LIFFE Administration and Management, which administers the futures and

2. Pursuant to Rule 4.14.7, the Board may implement Procedures in relation to

3. These Grading and Warehousekeeping Procedures prescribe in more detail the

“Appeal Panel” means a minimum of three Graders selected in accordance

“Charge period” means a period of six calendar months, commencing on the

“contract terms” means the contract terms and Administrative Procedures of

“Converted Original Delivery Unit” means a new Delivery Unit which is

“Delivery Unit” means a Standard Delivery Unit, a Large Delivery Unit or a

“Dual Capacity Warehousekeeper” means a Warehousekeeper which has been

which appears on the List of Nominated Warehouses and Warehousekeepers

“Exchange” means LIFFE Administration and Management.

“Exchange official” means any employee of the Exchange.

“Fogging” means the application within a Warehouse of a chemical agent

“Fumigation” means the use of either a chemical agent and/or a process

“Goods” means either Cocoa or Robusta Coffee.

“Grader” means a LIFFE Registered Cocoa or Robusta Coffee Grader, as the

“Grading Panel” means a minimum of three Graders selected in accordance

“Grading Room” means the LIFFE Grading Room.

“Grading Station” means the workbench where a Grading Panel or Appeal

“London Agent” means a person acceptable to the Exchange who is authorised

“LoU” means the Letter of Undertaking for a LIFFE Registered Cocoa or

“Movement Out Charge” means the fee charged by a Warehousekeeper in

“Nominated Delivery Unit” means each Delivery Unit to be converted by or

“Owner” means the person entitled to the Goods where:

(a) he has the beneficial interest in the Goods; and/or

(b) he is the Warrant holder;

(i) where these Procedures confer a right on an Owner, such right

(ii) where these Procedures confer an obligation upon an Owner, it

“Parcel” means, in respect of Robusta Coffee, all or any portion of a shipment

“Quartering” is the process by which sample material is mixed thoroughly and

“Related Company” means a subsidiary or parent company or any subsidiary

“Rules” means the Rules of LIFFE.

“Senior Grader” means a Grader of sufficient knowledge and experience,

“Single Capacity Warehousekeeper” means a Warehousekeeper which has

“Supervision Company” is a company whose business is the supervision

“Supervisor” is a person employed exclusively by a Supervision Company and

“Warrant holder” means, the person in possession of the relevant warrant.

“Warehouse” means a warehouse in respect of which a Warehousekeeper has

“Warehousekeeper” means either a Single or Dual Capacity Warehousekeeper

3. In these Procedures, a reference to:

(b) a time of day is a reference to the time in London, unless a contrary

(c) a Procedure, unless the context otherwise requires, is a reference to a

(d) a term, unless the context otherwise requires, is a reference to a term of