What does Approved Delivery Facility mean?
An authorized point of delivery for the commodity underlying the futures contract in the event in which the futures contract is set to take delivery. As determined by the exchanges an Approved Delivery Facility includes banks, stockyards, mills, grain elevators, etc.
Futures Knowledge Explains Approved Delivery Facility
In futures contracts, the seller has to hand over the underlying assets to the buyer at a delivery facility authorized by an exchange. Exchanges determine these facilities, which are known to both parties, to ensure the successful delivery of the underlying commodity in a futures transaction. The physical delivery is done at the approved delivery facility as per the terms of the future contracts. The list of approved delivery facilities generally includes banks, stockyards, warehouses, depositories or others that are authorized by an exchange.