Exchange Futures Market

At present moment, one is our development trends is the creation of organized futures market as one of the most effective ways of free money resources management to get the income and to ensure the risks.

There is a “Development Program of the Stock Market”, approved by the Council of Ministers of Belarus, and “Plan of Measures on Implementation of the National Program of Attraction of Investments into Belarusian Economy”, approved by the National Bank, aimed at developing the national futures market.

Our main tasks on the futures market are:

To organize and to carry out trades with financial instruments of the futures market.
To control the participants’ authorities and their traders.
To carry out estimation of requirements and obligations under trading results for trade participants.
Information service for trade participants.

Organization of the Exchange Futures Market

The exchange futures market is organized within the framework of the Futures Market Sector (Sector) of the BCSE . According to the Futures Market Sector Regulations as of 09.03.2004, the Sector represents the isolated BCSE’s division not being a legal entity. The Sector consolidates the professional securities market participants. The purpose of its activity is the assistance to development of the exchange futures market, growth of its participants’ professional level and establishment of fair rules and effective standards of carrying out of exchange transactions.

There are 2 categories of membership according to the Sector’s Membership Rules:

Clearing Members;
Trading Members.

These two membership categories differ by the right in their settlements with the BCSE.

The Clearing Members carry out independently settlements under their transactions, as well as under transactions concluded by the Trading Members.

The Trading Members carry out settlements through the Clearing Members under the concluded agreement.

To be a member of the Sector a legal entity should meet requirements of the Membership Rules and submit both an application with indication of membership’s category and package of documents according to the Membership Rules.

Individuals or legal entities can become clients of the Sector Member after having concluded a trading agreement with the Clearing or Trading Member who registers them at the BCSE and concludes transactions under their orders as well as keeps operations records on separate client accounts. The order and conditions of trade service are determined between the client and the Sector Member.

The Rules for conclusion of transactions stipulate trade service requirements aimed at protecting clients’ interest.

The BCSE provides trade participants with:

a modern trading clearing system that allows participants to carry out transactions in real-time mode;
a reliable settlement system ensuring absolute safety of participants’ funds and guaranteed fulfillment of obligation;
an effective system of risks control that ensures stable functioning of the market even during the crisis (through the localization of problematic segments);
transparent contractual relations between the organizer and market participants.

	Characteristic of futures on US Dollar	Characteristic of futures on Euro
Kind of Futures	settlement financial tool	settlement financial tool
Basic asset	US Dollar	Euro
Minimal lot	1000 US Dollars	1000 Euro
Term of circulation	6 nearest months	6 nearest months
Date of execution	15-th day of month of execution	15-th day of month of execution
Last day of trade	working day prior to execution day	working day prior to execution day
Execution	Payment of variational margin	Payment of variational margin
Final settlement price	US Dollar rate to Belarusian Rouble, established upon results of trades by foreign currencies on Stock Exchange on day of execution of futures	Euro rate to Belarusian rouble, established upon results of trades by foreign currencies on Stock Exchange on day of execution of futures
Number of series simultaneously under circulation	6 series with days of execution within nearest 6 months	6 series with days of execution within nearest 6 months
Exchange fee	is not levied	is not levied

Trading order within the Sector

The BCSE’s trading system allows to settle the main task of this market at the outset – to provide its safe functioning and to minimize the influence of unfavorable factors.

Joining both SPOT and futures market predetermined the formation of the starting nomenclature of financial instruments that are futures on US dollar and euro rate.

The exchange trades are carried out in an uninterrupted double auction mode in the following order:

1. Depositing cover funds (deposit margin):

the deposit margin rate is determined at a rate of two-day limits of the price change.
the deposit margin is introduced only in Belarusian roubles.
the deposit margin is deposited in advance, i.e. before opening position.

2. Trade session:

trades within the Sector are carried out electronically;
participants’ representatives participate in trades from working places in the trading room provided by the BCSE;
transactions are concluded when purchase applications meet sale applications in a mode of anonymous uninterrupted auction on the basis of limited and market applications.

Clearing and Settlements Organization

1. Clearing session:

A segregated positional account is opened for each market participant (a Sector Member, a client);
positions are kept on positional accounts; each Sector Member can have some positional accounts.

2. Settlements are carried out for each Sector Member under the following liabilities:

variational margin;
delivery payment;
additional deposition/ return of the deposit margin in Belarusian roubles;
exchange fees.

Obligations are determined for each Clearing Sector Member the under his transactions and positions, as well as under transactions and positions of the Trading Sector Member that he services.

The obligation under variational margin is determined as the change between initial positions’ cost at the beginning of the clearing session and the last positions’ cost as a result of their adjusting on the market that is a procedure of establishing an integrated price for each series of futures instruments. The settlement price is determined in accordance with the algorithm described in the Transactions Rules, as the most representative price of the these series of futures instruments upon the termination of trades.

Upon termination of clearing session, taking into account deposit margin balance as well as Clearing Member’s positions opened at the moment of calculation of this requirement, the amount of the deposit margin is determined. If this requirement exceeds the amount of Clearing Member’s deposit margin, this Clearing Member is obliged to add a deposit margin, and if the contrary, overbalance of the deposit margin.

The balance of the indicated obligations of the Clearing Sector Member constitutes his net obligation.

Settlements

All settlements under the liabilities are carried out through the corresponding Clearing Members’ accounts and BCSE’s control accounts in the National Bank.

If the Clearing Member has a negative net obligation upon results of clearing session, the amount of this obligation is written off from his corresponding account to BCSE’s control account. If the Clearing Member has a positive net obligation, the BCSE transfers the amount of this obligation to the corresponding account of the Clearing Member.