AmendmentOther

Ethiopia Commodity Exchange Internal Rules Amendment (Directive No. 558/2021)

Ethiopia Commodity Exchange Authority558/2021

Summary

This directive amends the Revised Internal Rules of the Ethiopia Commodity Exchange No. 554/2021, introducing new sub-articles, renumbering existing ones, and modifying specific provisions related to membership, trading, dispute resolution, and quality control for commodities, particularly coffee.

Who's affected

Members of the Ethiopia Commodity Exchange, including ordinary members, limited members, non-member direct traders, and their representatives, as well as suppliers and buyers of commodities traded on the exchange.

Action required

Members and other affected parties should review the amended rules to understand how they impact their trading activities, membership rights and obligations, and dispute resolution processes.

Key points

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  • Introduction of definitions for Affiliate or Sister Company.
  • Amendments to rules regarding seat transfers, annual fees, and auctions.
  • Clarification of trading session definitions and electronic trading procedures.
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    • New provisions for identity-preserved commodities trading.
    • Refined rules on membership termination, suspension, and seat sale rights.
    • Stricter rules on trading floor conduct and representation.
    • Updated procedures for financial statement submission and client assessment.
    • Enhanced dispute resolution mechanisms, including arbitration and conciliation.
    • Detailed procedures for coffee grade appeal and quality determination.
    • Provisions for services to suppliers of direct or alternative transaction schemes.
    • Amendments to contract amendment and technical team formation processes.

Requirements

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  • Members must adhere to new sub-articles regarding seat transfers, trading sessions, and membership fee obligations.
  • Affiliated or sister companies must declare their affiliation and ensure their transactions do not negatively affect market price discovery.
  • Suppliers engaging in direct or alternative transaction schemes must present documentation to the Exchange.
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    • Members must provide audited financial statements within four months of their financial year-end.
    • Identification badges must be worn by floor representatives and Exchange employees on the trading floor.
    • Members must take reasonable steps to assess new clients, including obtaining tax clearance documents.
    • Members must provide required information to the Judgment Execution body for seat sales via public auction.
    • Non-member direct traders are limited to two authorized representatives, with only one permitted in a single trading session.
    • Any member requesting a seat transfer at the beginning of the budget year may be exempted from annual membership maintenance fees under certain conditions.
    • Members are required to adhere to new procedures for trading identity-preserved commodities.
    • Dispute resolution processes, including arbitration and conciliation, must be followed.
    • Complaints regarding coffee grade and quality must be filed within 24 hours with the Coffee Quality Inspection Center.
    • Reference samples for coffee quality disputes must be managed jointly by the Exchange and a designated Coffee Quality Inspection Center employee.

Rights and permissions

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  • Members have the right to be represented by up to four authorized representatives, with a limit of two in a single trading session.
  • Members can request seat transfer under specific conditions to avoid annual membership maintenance fees.
  • Members whose membership is revoked or suspended have rights regarding the sale of their membership seat and potential refund of fees.
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    • Suppliers can submit claims related to commodity quality or grade to the Coffee Quality Liquoring and Inspection Center.
    • Parties have the right to opt for arbitration or conciliation for dispute resolution.
    • Buyers have the right to challenge coffee quality determination under specific circumstances and procedures.

Restrictions

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  • Members shall not be obliged to pay annual membership maintenance fees if they request seat transfer at the beginning of the budget year and have not traded.
  • A member who transferred their seat via auction shall stop trading from the date of approval of the sale.
  • Membership may be terminated if a member fails to commence trading within three months of approval or fails to trade for six months, unless justified.
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    • Trading representatives are restricted in the number allowed per trading session.
    • Non-member direct traders have restrictions on the number of representatives and their participation in trading sessions.
    • Members and their representatives are prohibited from talking to each other on the trading floor.
    • Two buy member's trade representatives are not allowed to compete to buy one warehouse receipt number for the same client for identity preserved commodities.
    • Affiliated or sister companies must not negatively affect market price discovery.
    • Parties are prohibited from appearing before the Coffee Quality Inspection Center once experts begin their evaluation.
    • Claims to downgrade the Exchange-given grade of coffee to a local grade shall not be accepted.

Penalties

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  • Membership may be terminated if a member fails to commence trading or fails to trade for a specified period without justification.
  • Penalties may be imposed on affiliated or sister companies for performing transactions against declared affiliations and market price discovery principles.
  • Suspension from trading may occur if a judgment-debtor fails to comply with an arbitral award within one month.

Objectives

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  • To amend and update the Internal Rules of the Ethiopia Commodity Exchange.
  • To clarify definitions and procedures related to membership, trading sessions, and seat transfers.
  • To enhance the framework for dispute resolution and quality control, especially for coffee.
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    • To introduce new provisions regarding affiliated companies and services for suppliers.
    • To refine processes for contract amendment and the establishment of technical teams and consultation panels.

Organizations

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  • Ethiopia Commodity Exchange (ECX)
  • Ethiopia Commodity Exchange Authority
  • Coffee Quality Liquoring and Inspection Center
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    • Coffee and Tea Marketing & Development Authority
    • Ethiopian Coffee Exporters Association
    • National Exchange Actors Association
    • Ethiopian conformity Assessment Enterprise
    • Ethiopian Pulses, Oilseed and Spices Processers and Exporters Association

Legal references

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  • Ethiopia Commodity Exchange Proclamation No.550/2007
  • Ethiopia Commodity Exchange Authority Proclamation No.551/2007
  • Coffee Marketing and Quality Control Proclamation Number 1051/2010
Original sourcehttps://justice.gov.et/en/directives/ethiopia-commodity-exchange-internal-rules-amendment-directive-no-558-2021/
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