According to Article 28 of the Law No. 5174 on the chambers of commerce and industry, chambers of commerce, chambers of industry, chambers of maritime commerce, commodity exchanges and the Union of Chambers and Commodity Exchanges of Turkey (TOBB); Commodity Exchanges are defined as “…public legal entities established for engaging in purchase and sale of goods that fall under a commodity exchange and as well as determination, registration and announcement of the prices of such goods formed in the commodity exchange in accordance with the principles stated in this Law.”
Commodity Exchanges are “organized agricultural and livestock products markets where products are standardized or sorted or represented by sample; their production, consumption or export, import or distribution are carried out in large quantities; are durable and suitable for stockpiling; their supply and demand are variable, their purchase and sale are carried out under free competition conditions and their wholesale is carried out at predetermined minimum amounts.” Commodity exchanges, which aim to bring the buyers and the sellers of the agricultural and livestock products together, ensure that prices are formed under free competition conditions.
When one speaks of the commodity exchange, stock exchanges where securities are traded come to mind. However, there are differences between stock exchanges and commodity exchanges. The main difference that separates the two is that commodity exchanges involves the trade of agricultural and animal products. Commodity exchanges are institutions with administrative and financial autonomy established within the limits of legal legislation. In other words, they are institutions which do not pose any financial burdens for the government and which create and use their own resources and even transfer these to public institutions. Moreover, they are managed by committees (professional committee, assembly and board of directors) elected from its own members. In this respect, they are an indispensable element of liberal democracy. Commodity exchanges also are also an important part of the market economy.
The benefits of Commodity Exchanges may be listed as the follows:
* With the registration of the purchase and sale of agricultural and animal products to the Exchange, it is ensured that these are recorded and, thus, that the state does not lose taxes on these products and that tax evasion does not take place.
* Commodity Exchanges Provide Benefits to Producers: Exchanges are market places where producers can offer their products a large number of buyers. Therefore products can find their true value on the conditions of the day. Only registered members are allowed to enter and take action in Commodity Exchanges. The only exception to this is agricultural producers. Therefore, agricultural producers form a large section in in each commodity exchange.
* Commodity Exchanges Protect Consumer Benefits. Commodity Exchanges contribute to the creation of true and fair prices by partly compensating season and location sourced price differences of the agricultural products which are very common for production and consumption.
* Commodity Exchanges Provide Benefits to Exporters: Producers and exporters who work in sectors such as food, textiles, and industry are able to retrieve committed quality, price and date of delivery of exported products by making term purchase contracts.
* Commodity Exchanges Provide Benefits to those that work in the Construction Market: Businessmen are free of risk by carrying out forward purchases in the commodity exchanges in line with the delivery date and product amount committed.
* Arbitration Management on Dispute Solving Prevents Leeway: Any dispute between members are solved by board of arbitrators.
DUTIES OF THE COMMODITY EXCHANGE
Article 34 of Law No. 5174 lists the duties of the commodity exchanges as follows:
a) To arrange and register the purchase and sale of the goods quoted with the commodity exchange.
b) To duly determine and announce the daily prices, which occurs in the commodity exchange of the goods quoted with the commodity exchange.
c) To make general regulations that come into effect by the approval of the Union concerning obligations of seller and purchaser for delivery, acceptance and payment, conditions of liquidation terms of transactions, conditions that have effect upon prices, and arbitration rules for resolving disputes that may arise.
d) To follow domestic and overseas commodity exchange and markets activities and to communicate the prices, to guide its members concerning electronic commerce and internet networks.
e) To issue and approve the documents stated in article 51.
f) To establish laboratories and technical offices or to participate in the ones that have already been established in order to determine types and specialties of the goods quoted with the commodity exchange.
g) To determine the customs and practices regarding the commodity exchange in its regions, to submit them to the Ministry for its approval and to announce them.
h) To make offers, wishes and applications to the relevant official authorities with regard to the subjects of activities of the commodity exchange; to bring a suit on behalf of him or members when all or some of the members have interest.
ı) To monitor the agreements, decisions and actions in a character of concerted practice that may have deteriorative effects over the competitiveness, and, in case of determination of any such agreements, decisions or concerted practices, to inform the relevant authorities.
j) In case that the works, which are given to the ministries and other public institutions by the legislation, are given to the commodity exchanges in the framework of their establishment and working fields that are stated in this Law, these commodity exchanges shall carry out these works.
k) To provide necessary documents to its members and render services in connection therewith.
l) To assess the applications to be made on of domestic fairs and make proposals to the Union.
m) To discharge the duties assigned by other relevant legislation and by the Union and the Ministry in accordance with the relevant Laws.
BENEFITS OF MEMBERSHIP
Article 32 of Law No. 5174 is as follows:
The persons engaged in the activity of sale and purchase of the goods that are included in the quotation of commodity exchange, are obliged to register to the commodity exchange they are located. The registration of the persons, who have not acted in accordance with this obligation, shall be done by the exchange ex officio and such registration shall be notified to them. The member registrations that shall be done as per the profession groups shall be kept in a common database which is kept up-to-date and which is constituted in the Ministry and Union in an electronic form.
The persons who are obliged to register to the commodity exchanges shall notify to the commodity exchanges where they are registered, any changes in their legal status that is required to be registered and announced according to the Turkish Commercial Code in one month following the change. If the relevant commodity exchange is informed of any changes that are compulsory to be registered but are not registered within the required formation and time limit, then such exchange shall notify the relevant registry office in order to make the necessary change. The registry office is obliged to make necessary changes upon the mentioned notification.
The branches, liaison offices, factories, representatives, warehouses, purchase and sale places and similar units regardless of their registration at the trade or craftsman registry of the real and legal persons, whose center of business is out of the commodity exchange working field, and who performs activities in the commodity exchange working field are also required to register to the commodity exchange.
The persons whose address and legal status cannot be identified for previous two years, and the persons who has not been engaged in the activity of purchase and sale upon commodity exchange goods for previous two years shall be struck off the profession groups and electorate list; accrual of their subscription fees shall be ceased, and they shall not receive the services rendered by the commodity exchange.
If the relevant person shall not apply to the commodity exchange that he is registered in order to inform about his address and legal status within two years from the new year’s day following the foregoing decision of the assembly of commodity exchange, his registration shall be erased from the exchange by the proposal of board of directors and the decision of the assembly. The subscription accrual shall be commenced again if the relevant persons inform the commodity exchange about his status in this period. However, if the subscription debts shall not be paid, such persons shall not be recorded in the electorate lists again. Producer or manufacturers that making sales directly to consumers without producing in bulk of the goods quoted to the commodity exchange shall sell their goods in the commodity exchange without being registered to it.