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Commodity Listing

Part I: Admission Advisor

Application for admission and listing together with the documents subject of the Article 8 of the present “instruction” must be submitted to IME by the admission advisor and be registered with IME.

The admission advisor is selected from among the brokerage firms having the license of reference broker and the investment companies.

The liabilities of the advisor are as follows:

1-advising to the applicant on the process of admission and public offering

2-Assessment of the level of readiness of the applicant for admission

3-Submitting the required documents and information to the exchange

4-Control over compliance of the rules and regulations by the applicants during the process of admission.

The admission advisor must review all documents, information and papers provided by the applicant and confirm the documents are in full, signed by the authorized signatories and sealed by the applicant. 

To list a commodity at least the following conditions shall have to be met:

1-The applicant shall have to enjoy a good and reliable track record of career in the market of the listing commodity and there should be in place a clear outlook of the continuation of the applicants operation.

2-The amount of public offering of the commodity shall be in the manner that facilitates fair price discovery in the IME.

3-The nominated commodity shall not be subject to the restrictions including those of legal pricing and monopoly in supply and demand which prevents fair price discovery.

The board of admission shall, at the time of admission of each commodity, establish the minimum annual offer quantity and the minimum percent of offer quantity, in the exchange, out of total annual production for producers and total amount of annual imports for the importers. Note: enforcement of any change in the minimum quantities subject of the present article shall be possible by proposal of the exchange and confirmation of the board of admission.

The person who offers commodity in the exchange shall comply with the rules including the requirements of the present “instruction” and the regulations concerned with disclosure of commodity offer information.

 

 

Handling Listing Applications

The IME shall, during 30 days from the registration of the application, submit the expert report on admission terms and conditions together with the documents relating to the board of admission. The layout of the mentioned report shall be proposed by the exchange and established by the board of admission.

The board of admission shall, within 30 days from submission of the report and the documents concerned by the exchange, announces its opinion in writing stating the reasons on approval or dismissal of the admission application to the applicant through the exchange. In case of dismissal of application, the applicant may, during no later than 10 days from notification of the decision of the board of admission, file a protest with the secretariat of the “Organization”. The decision of the board of directors of the “SEO” on re-handling of the issue or confirmation of the view of the admission board shall be final and binding on the applicant, listing board and the exchange.

In case that the board of directors of the “SEO” discerns the protest as justified, the application shall have to be reviewed at the first meeting of the board of admission.

In case of dismissal of the application and if the applicant relinquishes from protesting, or after implementation of the revision of the decision of the board of directors is dismissed by the board of admission, the application shall be reviewed at least 6 months later in the board of admission having undergone again all procedures of admission and remitting the admission fees.

Listing of the nominated commodity with the IME price list shall be subject to meeting of the entire provisions which are determined by the board of admission.

In case the commodity was not offered in IME within 6 months from the date of admission, it shall be delisted, and its relisting shall be subject to pursuing the admission procedures anew.

 

 

 

Commodity Listing Process

Listing application form shall have to be submitted to the exchange together with the following documents:

1-Admission and listing questionnaire,

2-Prospectus

3-Commodity ID form

4-Certified copy of the standard certificate of commodity

5-Admission fee payment slip

6-The written undertaking of the producing company stating that the company has prepared the ground for a visit to the production lines and warehouses at the request of the board of admission or the exchange.

7-Certified copy of the clearing documents of the commodity which is under listing from the Islamic Republic of Iran’s Customs Administration

8-Customs Green pass

9-Inspection certificate of origin/destination

10-Warrant for the commodities which are cleared from customs and shipped into the domestic warehouses

11-Certified copy of proforma invoice, registered for order placing, together with the documents of the opened letter of credit or payment certificate for the non-cleared imported commodity

12-Certification of the competent authorities for the commodities which are subject to observation of special regulations or obtaining legal licenses

13-Further information which may be discerned significant by the applicant or at the request of the exchange or the board of admission

With regard to the commodities which are not subject to compulsory standards, applicants shall have to provide quality control certificate from laboratories certified by the Standard Organization. In case that obtaining the certificate from the standard organization is impossible the certificate shall have to be obtained from other exchange certified labs.

 

 

 

Settlement and clearing process

The clearing house has a major role in the process of pre-trading and post-trading, settlement and clearing of traded commodities.

When the abovementioned documents and materials are presented to the Exchange in full and within the specified period of time, IME shall, upon making certain about the compliance with rules, confirm the offering advice and send it to the clearing house not later than 2 p.m. of the same business day. The offering advice shall, upon the approval of the clearing house, be published by the Exchange not later than 3:30 p.m. of the same business day prior to the offering.

Guarantee Criteria

The most important part of the controlling process of pre-opening stage in clearing house is to control supplier's and broker's assurances. This control is a necessary condition for products supply and plays very important role in risk controlling.

It is worth noting, supplier's brokers applies some approaches including deposit of cash or settlement of previous commitments to make sure there are enough guarantees to supply. Already, in this matter, the current procedure of the IME, according to the Board of Directors resolution, is to provide 100% supply assurance.

 

 

Clearing Process

In accordance with the instructions, regardless of type of contracts (cash - futures - credit) clearing process just is possible in two forms of cash and credit. In cash settlement, buyer is required to deposit the amount of contract considering both parties fees to the settlement account, within the deadline (maximum three working days. But, in the credit settlement, the credit settlement document and other documents in company's format are rendered to the clearing house, after getting confirmation of the seller, the seller and buyer's broker. 

The settlement deadline

The settlement deadline is three working days after completion of trading. The timing of settlement would be determined based on the IME's Board of Directors resolution. Already, according to this resolution, the last time to deposit the amount of contract is 1 p.m. of the third day. All receipt of deposit and contract documents should be submitted to the clearing house by brokers before 3 p.m. of each day through the system.

 

 

Operating Account

Operating Account is a banking account for the settlement based on the Clearing House instructions.

Penalties for delayed settlement

If contracts do not clear within the settlement deadline (three working days), customers would be given this opportunity (possibility) to deposit the amount of contract and final settlement within up to 7 calendar days after settlement deadline. In this case, the buyer is obliged to pay 0.25% of trading value as penalty. Since the fine is deposited in seller's account, if the seller withdraws to receive the fine, the clearing house would settle the contract with and "specific approval".

 

 

 Cancellation of trading

 If the buyer does not make the settlement even after 7 calendar days, the trading is cancelled and the buyer's broker is obliged to deposit 5% of trading value as cancellation damage in addition to both parties fee. Already, the value and amount of each contract, based on ID code containing each contract characters, is deposited to operating account. 

 

 

Delivery Process

After contract settlement, the seller is obliged to deliver the product according to the date mentioned in the contract. 

1.In cash and credit contracts, the maximum time to deliver is up to three days after settlement deadline. In case of delayed settlement, delayed days will be added to this deadline.

2.In forwards contracts with maturity date less than 30 days, up to 5 calendar days after delivery maturity date.

3.In forwards contracts with maturity date more than 30 days, up to 15  calendar days.

 

Listing Forms

1- Listing Application in Iran Mercantile Exchange

2- Commodity Listing Questionnaire

3-Products Listing and Registration Prospectus

4-Industrial Commodity Identification Form

5-Commitment Letter to List Commodity in Iran Mercantile Exchange

6-Listing Consultancy Contract

 

 

 

 

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Tuesday, October 24, 2017 13:05

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