OREANDA-NEWS. On 25 December 2008 was announced, that the new version of the law on commodity exchanges, passed by the two chambers of Belarus’ parliament creates a framework for the development of the futures and option market, the head of the legal department of OAO Belarusian Universal Commodity Exchange, Nikolai Tarasov, told when commenting on the bill.

“The possibility to conclude futures and option contracts enables traders to insure their risks caused by market price changes,” Tarasov said.

According to him, the existing law, adopted in 1992, does not meet modern requirements. “The outmoded law does not regard a commodity as a subject of transaction [but only the acquisition of sale and purchase rights]. Besides, it is short of the set of notions of exchange trade,” he said.

Tarasov said the new version of the bill extends the list of transactions that may be concluded at the exchange: spot contracts, forward, futures and option deals. “Since every type of transactions requires special operations and rules, infrastructure will also develop. Futures contracts require a clearing house, settlement bank, and guarantee fund. These additional institutions will secure transactions,” he said.

The expert said the new bill includes requirements that a commodity exchange must meet: accreditation of participants, registration of transactions, and measures to prevent price manipulations.

“The developers of the bill aimed to facilitate the performance of the key objectives of commodity exchanges: to promote organized commodity markets, increase the efficiency of export operations and enhance material security of companies,” Tarasov said.

All disputes arising as a result of exchange operations are to be addressed by the arbitration board of the exchange, a pre-trial agency that aims to promote amicable agreements and partnership. “Unfortunately, many traders tend to resume disputes in economic courts, so we suggested authorizing arbitration boards to examine cases on their merits, that is, vesting the powers of economic courts in them. The decisions of the boards are to be executed by marshals of economic courts,” the expert said.