Iran Mercantile Exchange

Governance

• General Assembly
• Board of Directors
• Managing Director
• Auditor/Inspector

Management

Dr. Hossein Panahian,  President and CEO

Regulatory Environment

IME is the sole commodity exchange of Iran and a self regulated organization (SRO) operating under rules and regulations of Iranian capital market and supervision of the market regulator, the Securities and Exchange Organization of Iran (SEO).

Brief History

The IME launched operation in 2007 after merger of TME and IACE, the two specialized exchange markets trading metals and agricultural commodities. In early 2008 IME new products including petrochemicals, chemicals, refinery products, crude oil and minerals were listed in the spot market of the exchange and after a short while the exchange inaugurated International Oil Exchange trading floor in Kish Island on Persian Gulf in the midst of 2008. The first crude oil transaction in the oil exchange executed in 2010 while IME had already established the futures market, trading contracts of copper and gold coin in July 2008. The concept of Islamic Standard SALAM contract was developed in late 2010 on crude and fuel oil. The exchange plans to launch futures contracts on corn, steel rebar and polyethylene in the near future. IME trades account for 7% of GDP of the nation.

Spot Market

Open outcry electronic trading floor hosts for three main asset classes traded in cash against delivery.

• Agricultural products
• Metals,  Minerals and Precious Metals
• Petrochemicals and oil refinery products

Spot Transactions

Cash: Prompt cash payment against prompt delivery

Forward Delivery: Prompt cash payment for delivery in a specified date in future

Credit: prompt delivery against deferred payment

Spot Market beneficiaries

Since the spot market acts as the primary market it functions for transparent price discovery for the industries various sectors. From ore mines to raw material processing plants to smelters and finished products manufacturers to farmers and the food industries all are the clients and beneficiaries of this market. It sends signals on economic indices for decision and policymakers and sheds light on overall status of trade and commerce.

Futures Trading

At the outset, IME launched futures trading on copper as the first underlying asset listed to the futures contracts. At that time there were little knowledge on futures trading in the market and among ordinary  or even institutional investors resulting in lackluster transactions on this product and eventually delisting of copper from tradable futures entries. Then gold was adopted as the second contract leading to introduction of gold coin as a popular asset among investors who could invest on it to speculate as scalpers or arbitrage the spread of physical and future markets and also to hedge against price movements. The contract which results in mandatory delivery at the end of contract month rapidly became popular with many participants having interest in it. At the same time education and training on futures markets elements and functionalities attracted more individuals and entities and increasing number of investors attended the seminars and training courses held both by the exchange and the brokers.

Other financial instruments

Now market demands for other products and instruments to quench their investment need and IME is responding to this need by embarking on doing feasibility studies on new futures contracts  and options on futures as well as warrant contracts on agro-products and metals but the exchange tends to take the steps forward cautiously and prudently preparing the market by holding training seminars among the people across the related industries from producers to the end users and investors.

Trade Volume Statistics

 Trading System

Enjoying a viable and resilient trading platform developed by ICT staff specialists from scratch, IME has provided an integrated functionality from exchange matching system to clearing house related to the clearing members back office online and realtime.

 Clearing and Risk Management

The clearing house of IME is owned by the exchange imposing collaterals and margins on both clients and members in order to mitigate the counterparty risk of default on the side of seller or the buyer while implementing constant oversight on risky accounts and doing market surveillance to ensure sound operation of the exchange markets.

Realtime Margining

IME has set up a pre-trade margin mechanism to reduce the risk of default and at the same time realtime margining is in place to roll the risky positions out of the market during sharp volatilities and adverse price movements.

Clearing Fees 

Surveillance

The sound operation of trades, accounts and also performance of the clients are constantly monitored by the exchange electronic and physical surveillance gadgets. The credentials come from regulator.

Global Partnership

Membership to Association of Futures Markets, taking part in SFOA Burgenstock meeting and establishing good ties with our pears in capital market with an eye to have strong relations with the emerging economies exchange markets like BM&F, JSE, DCE, India exchanges, signing MOUs with regional and universal exchanges and sharing technologies from well known providers to run a robust exchange for the years to come. Thanks God we are not alone in this venture and we have our good and reliable friends in AFM secretariat and members alongside.