AmendmentTrade

Ethiopia Commodity Exchange Internal Rules Amendment (Directive No. 559/2021)

Ethiopia Commodity Exchange Authority559/2021

Summary

This directive amends the Revised Internal Rules of the Ethiopia Commodity Exchange (ECX) No. 558/2021. Key amendments include the addition of definitions for 'Commercial Farmers' and 'Processors', the establishment of 'Regional Electronic Trading Centers', and revised financial requirements and fees for Non-member Direct Traders, with specific provisions for those trading exclusively at Regional Electronic Trading Centers.

Who's affected

Commercial farmers, investors, agricultural organizations, processors, suppliers, and exporters engaging with the Ethiopian Commodity Exchange, particularly those utilizing regional trading centers.

Action required

Review the amended rules to understand new definitions, trading center provisions, and updated financial requirements and fees for Non-member Direct Traders.

Key points

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  • Amendment of ECX Internal Rules No. 558/2021.
  • Introduction of 'Commercial Farmer' and 'Processor' definitions.
  • Establishment and operation of 'Regional Electronic Trading Centers'.
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    • Revised financial obligations (Net worth, trade access fee, security deposit, annual fee) for Non-member Direct Traders.
    • Specific, reduced financial obligations for traders exclusively using Regional Electronic Trading Centers.
    • Requirement for an undertaking for traders exclusively using Regional Electronic Trading Centers.
    • Notification process for trader transfers between trading centers.

Requirements

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  • Commercial Farmers are defined as persons, including investors and agricultural organizations, producing agricultural products for commercial purposes.
  • Processors are defined as persons using processing industry on agricultural commodities for value addition.
  • Regional Electronic Trading Centers are electronic trading centers opened by the Exchange outside of Addis Ababa.
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    • Non-member Direct Traders are categorized into Small holder farmer, Supplier, Exporter, Processors, and Commercial Farmers.
    • Suppliers, Exporters, Processors, or Commercial Farmers need a minimum Net worth of 250,000 Birr, evidenced by an audited financial statement.
    • Suppliers, Exporters, Processors, and Commercial Farmers must pay a trade access fee of 25,000 Birr.
    • Suppliers, Exporters, Processors, and Commercial Farmers must pay a 50,000 Birr non-interest bearing security deposit for the Settlement Guarantee Fund.
    • Suppliers, Exporters, Processors, and Commercial Farmers must pay an annual maintenance/renewal fee of 5,000 Birr.
    • Non-member Direct Traders trading only at Regional Electronic Trading Centers have reduced financial requirements: no audited financial statement for net worth is needed, a trade access fee of 5,000 Birr applies, no security deposit is required, and an annual maintenance/renewal fee of 3,000 Birr applies for processors and commercial farmers.
    • Non-member Direct Traders trading only at Regional Electronic Trading Centers must sign an undertaking to adhere to trading exclusively at these centers.
    • Non-member Direct Traders trading only at Regional Electronic Trading Centers may trade outside these centers only if they terminate the undertaking and fulfill admission requirements for outside trading and secure Exchange permission.
    • The Exchange must notify the Authority of trader transfers between Regional Electronic Trading Centers and the Addis Ababa Trading Center.

Rights and permissions

2
  • Non-member Direct Traders who choose to trade only at the Regional Electronic Trading Centers can conduct trades at all Regional Electronic Trading Centers of the Exchange.
  • Non-member Direct Traders who choose to trade only at the Regional Electronic Trading Centers may trade outside such trading centers upon termination of their undertaking and fulfilling admission requirements and securing Exchange permission.

Restrictions

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  • Non-member Direct Traders who choose to trade only at the Regional Electronic Trading Centers shall confirm their adherence to trading exclusively at these centers by signing an undertaking.
  • Non-member Direct Traders are restricted from trading outside Regional Electronic Trading Centers if they have signed the undertaking, unless they terminate the undertaking and meet specific admission requirements and obtain permission.

Objectives

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  • To amend the Revised Internal Rules of the Ethiopia Commodity Exchange No. 558/2021.
  • To introduce new definitions for 'Commercial Farmers' and 'Processors'.
  • To establish and define the role of 'Regional Electronic Trading Centers'.
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    • To revise financial requirements and fees for Non-member Direct Traders, including differentiated rules for trading at regional centers.
    • To ensure adherence to trading center commitments through undertakings.

Organizations

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  • Ethiopia Commodity Exchange (ECX)
  • Ethiopia Commodity Exchange Authority

Legal references

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  • Article 12(10) of the Ethiopia Commodity Exchange Proclamation No. 550/2007
  • Article 6(3) of the Ethiopia Commodity Exchange Authority Proclamation No. 551/2007
  • Revised Internal Rules of the Ethiopia Commodity Exchange No. 558/2021
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    • Article 21.1 of the Rules
Original sourcehttps://justice.gov.et/en/directives/ethiopia-commodity-exchange-internal-rules-amendment-directive-no-559-2021/
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