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Membership in the exchange gives the right to trade in its hall.


The abstract provides information about the commodity exchange, part of the infrastructure, without the development and improvement of which we can hardly talk about the full development of the market in our country, as well as how they work and what functions the exchange – an attribute of a market economy.

Commodity exchange by definition – a corporate, non-profit association of members of corporations, which provides material conditions for the sale of goods on the market through public bidding in accordance with the rules and procedures that ensure equality for customers and members of the exchange.

The tasks of the exchange – not the supply of the economy with raw materials, capital, currency, and the organization, streamlining, unification of markets for raw materials, capital and currency.

Commodity exchanges do not buy and sell goods, but contracts for their supply. They sell contracts for standardized types of goods that can be sold in large batches or samples of technical description. Commodity exchanges reveal basic prices that are formed under the influence of the ratio of supply and demand. All exchanges are independent enterprises and operate independently of each other. Some goods are sold and bought only on one exchange, others – on several; however, the size of contracts for the same commodity and other characteristics differ from each other on different exchanges.

In relation to our conditions, the main functions of the commodity exchange should include such as the development of standards for products sold through the exchange, as well as a package of standard contracts for purchase and sale agreements, price quotations, dispute resolution and information activities …

Currently, the activity of commodity exchanges is regulated by the Law of Ukraine of December 10, 1991 “On Commodity Exchange” as amended on January 26, 1993. The law aims to regulate relations on the establishment and operation of commodity exchanges, exchange trade and legal guarantees on commodity exchanges. …

The exchange performs the functions of balancing supply and demand through open purchase and sale, streamlining and unification of the market of commodity and raw materials, stimulating market development, economic indicator.

In the early 1990s, there were about 50 commodity exchanges in the market countries with a total turnover of more than $ 10 trillion, which is 25% of their gross national product. They sell products of more than 60 items. In countries with developed market economies, commodity exchanges mainly function as non-profit associations, exempt from corporate income tax. The main items of their income are: founding and share contributions and contributions of organizations that form the exchange; revenues from the provision of services to members of the exchange and other organizations are proceeds from other revenues.

Membership and management on the stock exchange

The members of the exchange are: founders, domestic and foreign legal entities, as well as individuals. Membership in the exchange gives the right to trade in its hall. Members of the exchange may vote at meetings and in various exchange elections and participate in the work of committees. In addition, members of the exchange undergo training and retraining programs, receive comprehensive exchange information and can use library and information centers.

An organization is considered accepted as a member of the exchange if a qualified majority of the founders and a simple majority of enterprises and applicant organizations have voted for it. Voting is conducted after assessing the financial condition of the applicant. Members of the exchange are obliged to pay an entrance fee, which is returned to them in case of withdrawal from the exchange. Admission of new members of the exchange is carried out by the general meeting of founders and members of the exchange.

Exchange members pay an annual membership fee, but are exempt from all general fees charged to exchange participants. To facilitate their work, members of the exchange are given the right to hire employees who are allowed access to the trading floor in the form of clerks or messengers.

The main internal documents governing the activities of the exchange are the Charter of the Exchange and the Rules of Exchange Trading. The Charter reflects all the main provisions that determine the internal structure of the exchange, the relationship of members of the exchange and other bidders; organizational and legal form of the exchange.

There are two categories of members of the exchange:

full members – with the right to participate in exchange trading in all sections of the exchange and for the number of votes determined by the constituent documents of the exchange at the General Meeting of the Exchange and at the General Meeting of members of sections of the Exchange ; incomplete members – with the right to participate in exchange trading in the relevant section and for the number of votes determined by the constituent documents of the exchange at the General Meeting of Exchange Members and the General Meeting of Members of the Exchange Section.

In some exchanges there is an institute of visitors. They are divided into permanent and one-time. Regular visitors pay an annual fee for admission to the exchange, one-time – for each visit.

Exchange management scheme

The governing bodies of the exchange include three main levels that correspond to the breadth of each of them.

The supreme body is the General Meeting of Exchange Members, which is to some extent the legislature.

Executive functions are performed by the Exchange Committee, which has the right to control the activities of other services and develop the main activities of the exchange, to establish and adjust the rules of exchange trading.

The current management of the exchange is carried out by the Control and Revision Commission, the competence and powers of which are regulated by the Charter of the Commodity Exchange.

The policy of the stock exchange is carried out by directors consisting of members of the stock exchange appointed by the Board of Directors. Committee members work without pay. They make recommendations and assist the Board of Directors, as well as perform specific responsibilities for the operation of exchanges.

The number of committees is not constant and ranges from 8 to 40. The main ones are the following 5 committees, which are available on almost every exchange.

The divisions of the exchange include:

Control Committee – monitors the business activity on the stock exchange, the size of the open position, as well as the progress of the liquidation of contracts with expired supplies. The Arbitration Committee – the judicial body of the exchange, appoints arbitrators to resolve disputes between members, as well as in the case of clients – non-members in the event of a dispute between them and members of the exchange. The Quotation Committee is a working body whose main task is to prepare for the publication of stock quotes and analysis of price movements. Supervisory Committee – considers disputes and makes decisions on all disciplinary issues, which is referred to it by the Business Ethics Committee. Admissions Committee – considers all applications for membership in the exchange. The recommendations of the committee are provided to the Board of Directors, which decides on the admission of a candidate to the Exchange.

Exchange apparatus

1. The Center for Economic Analysis carries out:

control over the market situation of products; preparation of market surveys; analysis of technical, economic and other factors that may affect market conditions; market forecasts; paid consultations on economic issues.

2. The Legal Department with Arbitration shall:

execution of agreements between the partners under the agreement; legal registration of agreements, controls the correctness of their implementation by brokers; control of legality of actions of bidders; preparation of cases for consideration by the arbitration commission.

3. The transport and tariff department carries out:

organization and provision of delivery of products purchased at the exchange; advising sellers and buyers on issues related to transportation; preparation of proposals for effective methods of delivery of consignments to the buyer; registration of payments for delivery of goods.

4. The department of improvement of exchange trade carries out:

analysis of the level of development and state of trade on this exchange; search for ways to improve the efficiency and quality of the exchange; development and implementation of innovations that encourage the exchange apparatus to be more active; study of the experience of the organization of exchange trade in the country and abroad.

5. The information center provides:

receiving, storing and processing all circulating information; members and visitors of the exchange with services for making the necessary calculations, as well as information services.

6. The department of organization and support of exchange trade carries out:

maintenance of the exchange hall in due order; providing the exchange with commercial information; providing members of the exchange with the necessary materials and conditions for concluding the agreement.

7. The administrative and economic department carries out:

traditional economic tasks; solving problems related to accounting, solving issues of remuneration and personnel.

8. Brokerage offices provide:

implementation of exchange trading in the exchange hall; providing brokers to members of the exchange for their trading agreements; execution of agreements; control of fulfillment of contractual obligations by both parties; examination of consignments of goods received for exchange trading.

As commodity exchanges became active, the main actors were identified as members of the exchange and brokers.

The brokerage office is the main operating link on the stock exchange.

The task of brokerage offices is to ensure exchange trading in the exchange hall. As a rule, a brokerage office can be established only if there is a full member of the exchange, which can be purchased at periodically held by the administration of the exchange tender. Only one brokerage office can be created for one full participant, which in turn can accredit a certain number of brokers free of charge. Additional brokers and their assistants are accredited for a fee.

The brokerage office has the right to enter into brokerage services agreements with clients, as well as to act on its own behalf and at its own expense.

Brokerage activities of brokers on domestic exchanges are mainly limited to the execution of clients’ orders at the conclusion of certain types of transactions. The conclusion of transactions can be carried out by the broker both on behalf of the client and at his own expense, and on behalf of the broker and through the current account of the latter, where the client transfers funds. In fact, in the latter case, the broker becomes a commission agent, not a broker in the true sense of the word.

Relationships between clients and brokerage firms are formed on the basis of agreements concluded by them and agreements.