Commodity Listing Conditions in Side Market of IME

To list any commodities in the side market, the following conditions must be met:

1- There must be no ban or legal barrier to trade of the suggested commodities.

2- The product must have the specified characteristics, conditions and qualities to be announced in the public offering for the IME customers.

3- The supplier must be able to submit the required collaterals to the clearing house in order to guarantee delivery of the asset and must not be legally banned to trade. 

It is worth noting that, if a product has been admitted in other exchange markets, then it could not be offered in the side market by the same supplier. 

Listed products in the side market of IME are as following:

1- Immovable assets

2- Products not having conditions for listing in the physical market in accordance with regulations

Listings terms of the immovable assets in the side market

To offer a product in the side market, for every session, a separate request should be submitted to the IME and the approval of the offering committee must be obtained. Offering a product in the side market is not a proof of possibility to offer it continuously without meeting the conditions of this instruction. The offering committee would announce its decision to accept or reject the offering of product no later than 5 working days after receiving all necessary documents and information. In case of approval, the exchange is obliged to submit relating prospectus and other documents to the Securities and Exchange Organization of Iran (SEO). If the SEO would not reject the offering within three working days, exchange could issue the prospectus publicly. 

The IME should preserve all of documents which are submitted during the listing process in the side market and provide them on request of the SEO, immediately. If the SEO realizes that regulations have not been met during the listing process or quality and quantity of presented information are based on regulations, the SEO can prevent offering of the product in side market.

Moreover, after listing and before offering the product in side market, whenever the public offering committee realizes that the product has lost the listing conditions in side market either the supplier has violated the regulations the committee would cancel the listing of product and prevent its offering in side market. However, after each offering of product, its listing would be canceled automatically pursuant to IME side market regulations. 

Listing of the products suspended or de-listed from the physical market

1- In case of a supplier's product suspension in spot market, the IME would submit commodity listing consideration report to the offering committee and the committee will make a decision about listing the product in the side market pursuant to Articles 6 and 7 of side market regulation. 

2- In case of listing the product in the side market, maximum time to trade the product will be 3 months after suspension. During this period, it will not be necessary to complete the listing process for each offering. 

3- During the above-mentioned period, whenever the suspension is removed, trading product will be ceased in the side market and be resumed in the spot market.

4- In case the suspension has lasted to the end of 3-month period, the IME shall submit a report on the decisions regarding the continuation of suspension of trading in the spot market to the listing committee.

5- In case the listing committee approves the continuation of suspension, trading the product will be continued in the side market. But it is necessary to meet the listing process regulation in each offering in the side market. 

6- Maximum period of the continuation of suspension of trading the product would be 6 months after the product suspension in the spot market and after the end of this period, listing the product in the side market will be cancelled automatically.

Necessary Documents for Listing in the Side Market

The application should be submitted with the following documents to exchange by the listing advisor, and after verification of the completeness of documents should be recorded in the IME:

1- Listing questionnaire and product ID form

2- Sales order form

3- Listing fee payment receipt

4- Providing required documents related to the supplier's ascertainment of title of the listing product  determined by the board of director for each product.

5- Supplier's commitment to provide the IME requested condition for listing product to be visited by buyers.

6- The original or a certified duplicate of the original documents of the imported product which is mentioned in the listing questionnaire.

7- Approval of competent authorities regarding the products whose public offering are subject to compliance with the specific standards or legal licenses.

8- Listing advisor's contract

9- Other documents required by the buyer or offering committee

It is worth noting that the IME publishes the documents related to products characteristics or standard in prospectus format in its official website and in case of public offering committee discretion, the product evaluation report should be provided by the competent authorities. However, the format of listing questionnaire, product ID form, sales order form and prospectus shall be approved by the board of directors of the exchange.

Terms of offering, clearing and settlement in the side market through auction 

In offering through auction in the side market of the IME, product order registration, trading, settlement, clearing and delivery will be accomplished based on physical market regulation of the IME. In this type of offering, for trading volume less than purchasing limit for price discovery, the supplier is able to re-offer its product up to 5 working days after the first offering. If the product is not sold in second offering, the supplier should submit another application and accomplish the listing and offering process anew.

Terms of in one-lot offering, clearing and settlement in the side market

In the one-lot offerings, the seller's broker will be allowed to offer the product against receiving 3% of the product value from the seller based on the base price in cash or unconditional bank guarantee and deposit it to the clearing house account and deliver the house's approval to the IME.

It is worth noting that the state-owned suppliers are exempt from the provisions of this article.

Regarding the other executive agencies subject to Article (5) of the Civil Service Management Act which offer their products in one-lot mode, receiving the additional funds or guarantees to offer product will be based on the decision of the board of directors of the exchange referred to in paragraph (19) Article (1) of the Settlement and Clearing Instructions.

Also, in case that the seller's broker submits his written waiver of offering after publication of notices of offering and before the first offering day, and the exchange approves the waive, if the deal is not done due to the lack of buyer, his collaterals will be returned with the approval of IME within 2 working days after the return or the end of the trading session.

It shall be noted that in the one-lot offering method, the buyer's broker will be allowed to register the order in the trading system provided that receives  3% of product's value from the buyer in accordance with the base price in cash or unconditional bank guarantee and deposit it to the clearing house account and deliver the clearing house's approval to the IME.

However, if the buyer's broker fails to deal the product, his collaterals will be withdrawn with the approval of exchange up to 2 working days after the trading.

The finalizing of the trading in whole offering is subject to the payment of cash portion from the buyer and delivery of clearing document for settlements out of the clearing house in accordance with regulations and based on the following items:

1- The buyer is obliged to settle the cash portion of trading via his broker before the deadline of settlement.

2- If the buyer according to the regulations is the winner of the competition and provides the conditions of trading fulfillment mentioned in the public offering notice, the seller is required to sign the mutually beneficial settlement document and deliver it to his broker.

3- The seller's broker is committed to submit to the exchange the non-cash portion mutually beneficial settlement document which have been completed after fulfillment of announced condition by the buyer and the trading commitments. Delivery of the signed document by the seller based on the above-mentioned arrangements will result in completion of the trading. 

4- If the buyer does not deposit the cash portion of the trading under the terms of the public offering notice to the clearing house account before the deadline or does not fulfill other obligations of the trading (established by panel of jury members either approved by both parties) the clearing house will deduce all fees and other approved charges from the guaranties in Article 14 of the this instruction and the rest will be refunded to the seller's broker to return it to the seller as a guarantee of  non-fulfillment of obligations by buyers.

5- If the seller refrains from signing the clearing document for settlements out of the clearing house (credit settlement) in spite of fulfillment of obligations by the buyer as the provisions of this regulation, (established by panel of jury members either approved by both parties), all fees and other approved charges will be deduced from the guaranties in Article 13 of this instruction and the rest will be paid to the buyer as a guarantee.

6- If seller's broker does not submit the clearing document for settlements out of the clearing house (credit settlement) to the clearing house, the trading is not completed and the parties' disputes will be settled on the basis of arrangements set forth in Article 36 of the Securities Market Act of The Islamic Republic of Iran.

7- If the trading is not accomplish for any reason, the cash portion of buyer's deposit (except for 3% of the Article 14 of this instruction) will be refunded to the buyer's broker. It is worth noting that the agencies and state-owned enterprises and other executive agencies subject to Article (5) of the civil service management are excluded from sentences of paragraph 5 of this Article.

8- Delivering the clearing document for settlements out of the clearing house (credit settlement) and trade verification by the exchange will be considered as completion of trading process and its settlement in exchange and the exchange won't be liable to fulfillment of trading obligations by the parties including product delivery and clearing of non-cash transactions. 

Terms of clearing and settlement of immovable assets in the side market 

After publishing the initial public offering and based on the determined inspecting deadline, customers can visit the offered immovable asset after obtaining references from their broker which have trading license in the side market. Rules of determination of expert or Official Expert of the Justice Department will be ratified by exchange's board of directors. In trading of immovable properties, the signed purchase and sale agreement based on the public offering format is an integral part of clearing documents for settlements out of the clearing house (credit settlement). This purchase and sale agreement will be regulated by an entity determined by the board of directors of the IME.