Presentation

Starting from the experience gained in the organization of auctions, RCE initiated in July 2006 a project, i.e. the CASH MARKET. Such involves the organization of specialized floors for this category of commodities with a high standardization degree, also referred to as fungible commodities. Thus, it is created a framework where the demand and supply for this type of commodities meet under conditions of maximum transparency.

According to the law regarding commodities exchanges (i.e. no. 357/2005), fungible commodities are those commodities which are general determined and which may be replaced between them during the performance of a contractual obligation.

The main characteristic of such commodities is their high standardization degree. Irrespective of their producer, the commodities are identified based on physical and chemical characteristics which determine their quality. Thus, products are divided in several quality classes, according to which their price is determined. Due to the high standardization degree, the lots of the same product falling within the same quality classes are interchangeable.

Romanian Commodities Exchange is currently organizing six specialized floors: oil products floor, electric power floor, coal floor, cereals floor, potato floor and vegetables and fruits floor.

Within each floor, the support assets (i.e. commodities) are defined, for which trading sessions may be organized. For example, on the petroleum product floor, products such as: petrol, gas oil and black oil are identified as support assets.
 

Transactions on the cash market are performed either by open outcry on the exchange floor, or on the exchange electronic trading platform. In the case of electronic trading, brokers may launch the orders without requiring their presence in person on the exchange floor.

Operation of the cash market - Draft

Guarantee Account

RCE uses a guarantee system to make sure that the sellers and purchasers fulfill their contractual obligations.

Brokerage companies establish for their clients a guarantee account at BRM’s disposal, in which the guarantees related to all traded orders are administered. The guarantees are not individualized for each separate order, being transferable from one order to another. Practically, the company shall take care that the amount existing in the guarantee account exceeds or equals to the aggregate amount of all the guarantees requested for the orders which it intends to perform. The amounts are blocked into the guarantee account according to the order in which the trading orders were registered.

The guarantee may be established in one of the following forms: payment order, cash, bank letter of guarantee, cheque or promissory note.