Definition of the Commodity Exchange
According to Article 28 of Law No. 5174 on Chambers, Commodity Exchanges and the Union of Chambers and Commodity Exchanges of Türkiye (TOBB): “Commodity exchanges are public legal entities established to conduct the purchase and sale of commodities included within the scope of the exchange and to determine, register and announce the prices formed on the exchange, in accordance with the principles set out in this Law.”
When the term exchange is mentioned, stock exchanges where securities are traded generally come to mind. However, there are differences between commodity exchanges and stock exchanges. The most fundamental distinction between the two is that agricultural products are traded on commodity exchanges.
Commodity exchanges are institutions with financial and administrative autonomy, the limits of which are defined by legislation. In other words, they are organisations that generate and use their own resources without imposing any financial burden on the state and even transfer resources to public institutions. They are also governed by boards elected from among their own members. In this respect, they are an indispensable element of liberal democracy. Commodity exchanges are also an important part of the market economy, as the prices of agricultural products are determined according to supply and demand conditions.
Duties of the Commodity Exchange
According to Article 34 of Law No. 5174 on Chambers, Commodity Exchanges and the Union of Chambers and Commodity Exchanges, the duties of commodity exchanges are as follows:
- A. To regulate and register the purchase and sale of commodities included within the scope of the exchange.
- B. To determine and announce, in accordance with the applicable procedure, the daily prices formed on the exchange for commodities included within its scope.
- C. To establish general regulations, subject to the approval of the Union, specifying the obligations of buyers and sellers regarding delivery, acceptance and payment, the conditions for the settlement of transactions, factors affecting prices and voluntary arbitration procedures in the event of disputes.
- D. To monitor domestic and international exchanges and markets, provide price information and guide members on electronic commerce and internet networks.
- E. To issue and approve the documents specified in Article 51.
- F. To establish laboratories and technical offices, or participate in existing ones, in order to determine the types and characteristics of commodities included within the scope of the exchange.
- G. To identify the customs, practices and conventions relating to exchange activities within their regions, submit them for the approval of the Ministry and announce them.
- H. To submit proposals, requests and applications to the relevant public authorities on matters concerning exchange activities and, where the interests of all or some of their members are involved, to initiate legal proceedings on behalf of those members or in their own name.
- I. To monitor agreements, decisions and concerted practices that may have anti-competitive effects and, where identified, notify the relevant authorities.
- J. To carry out duties assigned by legislation to ministries or other public institutions and organisations where such duties are delegated to commodity exchanges within the framework of the establishment purposes and areas of responsibility specified in this Law.
- K. To issue the documents required by their members and provide the necessary services relating to them.
- L. To evaluate applications concerning domestic fairs and submit proposals to the Union.
- M. To perform other duties assigned by legislation and the duties to be assigned by the Union and the Ministry within the framework of the relevant laws.
