"All is set for the commencement of the futures from December five," East India Cotton Association (EICA) president Suresh Kotak told PTI over phone from Mumbai. The futures exchange would be inaugurated by consumer affairs secretary N N Mookherjee, he said.

Trading at the exchange would be initially for two hours from 1330 hrs and it would later be extended to four hours with commencement being advanced to 1130 hrs, an official of EICA, which will run the exchange said.

Cotton futures is being revived in the country after a gap of 26 years after it was banned in 1962. The Kamal Nayan Kabra committee had suggested in 1996 that domestic cotton futures could be resumed and the proposal was cleared by the United Front government in August last year.

"We will begin futures for February and April to start with at the exchange.Trading would be done through an open outcry system," the EICA official said.

Mock trading at the exchange began on October 14 and EICA had conducted seminars and workshops to explain the nuances of trading to its members. Kotak said though trading would be through an open outcry system, clearance and settlement would be online.

"Clearance and settlement will be done on the same day," he said.

Stating that all infrastructure was in place for the exchange, he said settlement, clearance and delivery would begin from the first day of the beginning of the exchange. EICA had enrolled 400 primary members for the exchange and 15 had been admitted as clearing members.

"Another five or 10 are in the process of enrolment and by the time the exchange starts, we should have 25 clearing members," Kotak said.

EICA would itself perform the function of a clearing institutions, while Union Bank of India would be the bank to clear the transactions. Kotak, however, refused to divulge details of the capital of theexchange.

The domestic cotton futures was among the first to be cleared by the government but considerable amount of time was consumed in framing bye-laws for trading.

The final clearance for the exchange was given by the Forwards Market Commission (FMC) during the last week of September after EICA amended some of the trading norms based on FMC suggestions.

Government has expressed its keen interest to get the exchange "off the ground".