PRECIOUS METALS AND DIAMOND MARKET
Precious Metals Market

 

Development and Activities of The Market

It took a long time to bring gold which has important social and economic roles in Turkey into its current financial situation. With the amendments in Decree number 32 concerning the Protection of the Value of Turkish Currency in 1993, determination of the gold price, gold export and import are liberalized. The decisions aimed at liberalization of gold helped import and export processes. The rapid growth seen in gold sector due to these developments accelerated new decisions concerning gold which has a great economic potential. These new decisions aimed at restructuring gold sector. The first legal decision concerning the establishment of Istanbul Gold Exchange was made in 1993, General Regulation Concerning the Foundation and Operation Principles of Precious Metals Exchanges was issued by Capital Markets Board on the basis of the provisions of Article 40/A of Code of Capital Markets, number 2499 as amended by law number 3794. On the basis of mentioned general regulation, in 1995 the Istanbul Gold Exchange (IGE) was opened (July 26, 1995) and authority to import gold was given to the members of the IGE in addition to the Central Bank. On the other side, Borsa İstanbul A.Ş. (the Exchange) was established on April 4, 2013 through the merger of Istanbul Gold Exchange and Istanbul Stock Exchange under the provisions of the Capital Market Law No. 6362.  Now precious metals and diamond transactions are executed in the Precious Metals and Diamond Market of Borsa İstanbul A.Ş.

Precious Metals and Diamond Market became an important step in canalizing the gold to financial system, developing gold based investment vehicles and international integration of gold sector in Turkey. After the Precious Metals and Diamond Market, local gold prices became in conformity with international prices, imported gold bars were enforced to meet generally accepted standards and fineness and the system gained a transparent structure. The establishment of Precious Metals and Diamond Market started a continuous development process on the market, set a base for the development of gold based financial instruments.

Trading on the Precious Metals Market

Domestic or foreign banks, precious metals brokerage companies, authorized corporations (formerly called currency offices) precious metals producing and marketing companies, international precious metal companies with its full-authorized branch in Turkey that obtained the membership certificate from the Under-Secretariat of Turkish Treasury and complied with the requirements set forth by the Borsa İstanbul A.Ş. Board of Directors, are authorized for trading on the exchange.

Only members of the Precious Metals Market of Borsa İstanbul A.Ş. are eligible to import precious metals and obliged to submit the import to the Exchange vault within three business days after the arrival of precious metal to Turkey.
Conduct of Trading

Buying and selling orders are matched in the Electronic Exchange System automatically based on price and time priority. Orders are submitted to the system by representatives of the Exchange members. Members, who want to buy or sell precious metal, submit their order to the system via the internet. If a buying order that sent to the system has higher price from the best selling price or equal it, the selling order can be matched completely or partially. If a selling order that sent to the system has lower price from the best buying price or equal it, the buying order can be matched completely or partially. The pending orders are broadcasted worldwide beyond the trading floor through information broadcast services.

 

Trading Hours

There is a continuous session in Precious Metals Market included weekend days and other holidays. Daily session starts 04:00 pm and closes 04:00 pm next day. Daily Exchange Bulletin is published and announced 04:00 pm. Clearing operations are executed in business days and official working hours of the Exchange.  

Precious Metals Market Session Hours

Starts 04:00 pm and closes 04:00 pm next day. (24hours continuos session)

Precious Metals Delivery Liabilities

At the latest 16:00 for daily transactions (T+0)

Monetary Liabilities

16:00 - 17:00

 

Trading Unit

Trading units in the market are Turkish Lira/kg, US $/ounce, EUR/ounce.

 

Minimum Price Fluctuation

Minimum price fluctuation for gold, platinum and palladium is 1 kuruş for TL/kg quotations, 5 cent for US $/ounce quotations and 5 cents for EUR/ounce quotations. For silver it is 1 kuruş for TL/kg quotations, 1 cent for US $/ounce quotations and 1 cents for EUR/ounce quotations.

 

Value Date

(T+0) - (T+15) for TL and USD and Euro

 

Precious Metals Trading In The Market
Standard Precious Metals

Standard precious metals that have features below can be traded in the Precious Metals Market: 

a)      Standard Unprocessed Gold: Gold bullion and bar that their features set by the Under-Secretariat of the Turkish Treasury with minimum 995/1000 fineness.
b)     Standard Unprocessed Silver: Silver bullion and bar and granules that their features set by the Under-Secretariat of the Turkish Treasury with minimum 99.9 % fineness.
c)      Standard Unprocessed Platinum: Platinum bullion and bar that their features set by the Under-Secretariat of the Turkish Treasury with minimum 99.95 % fineness.
d)     Standard Unprocessed Palladium: Palladium bullion and bar that their features set by the Under-Secretariat of the Turkish Treasury with minimum 99.95 % fineness.

General Specifications of Precious Metals
a)      Precious metals that have the fineness seal of internationally accredited refineries or domestic refineries are traded at the Exchange. 
b)        It is compulsory that each bullion or bar which will be traded in the Exchange have the refinery emblem or seal, bullion serial number, weight and fineness. 
c)        Granule silvers which took place in the Refinery List published by the Exchange are traded in the Exchange as standard granule in case of being granule package, having the seal, fineness, weight and refinery name or emblem on the package.

Standard precious metals that have surface features below can be traded in the Precious Metals Market:

a)      Precious metal should have smooth surface, not have blisters, crusting and migration and sharp corners. They should easily be stored and moved.  
b)     Granule silver packages should be prepared against outside intervention, tamper and impact resistant. 

Types bar and bullion for standard precious metals trading are as follows:

Gold
a)      Mini Bar: 1 gr, 2,5 gr, 5 gr. 10 gr, 20 gr, 50 gr, 100 gr, 250 gr ve 500 gr
b)     Bullion: 1 kg
c)      Large Bar: Bullion over 1 kg.

Silver
a)      Mini Bar: 1 gr, 2,5 gr, 5 gr. 10 gr, 20 gr, 50 gr, 100 gr, 250 gr ve 500 gr
b)     Bullion: 1 kg
c)      Large Bar: Bullion over 1 kg.
d)     Granule: Packaged granules in various weights  

Platinum
a)      Mini Bar: 1 gr, 2,5 gr, 5 gr. 10 gr, 20 gr, 50 gr, 100 gr, 250 gr ve 500 gr
b)     Bullion: 1 kg
c)      Large Bar: Bullion over 1 kg.

Palladium
a)      Mini Bar: 1 gr, 2,5 gr, 5 gr. 10 gr, 20 gr, 50 gr, 100 gr, 250 gr ve 500 gr
b)     Bullion: 1 kg
c)      Large Bar: Bullion over 1 kg.

 

NonStandard Precious Metals

Nonstandard precious metals that have features below can be traded in the Precious Metals Market: 
a)      Nonstandard unprocessed gold: Gold bullion, bar, dore bar, granule, powder or scrap with below 995/1000 fineness (except 995/1000)
b)     Nonstandard unprocessed silver: Silver bullion, bar, dore bar, granule, powder or scrap with below 99.9 % fineness (except 99.9 %)
c)      Nonstandard unprocessed platinum: Platinum bullion, bar, dore bar, granule, powder or scrap with below 99.95 % fineness (except 99.95 %)
d)     Nonstandard unprocessed palladium: Palladium bullion, bar, dore bar, granule, powder or scrap with below 99.95 % fineness (except 99.95 %)

Exchange members who deliver nonstandard precious metals to the Exchange are responsible for compliance with the fineness of precious metals with its certificate of assay.

Members who want to trade in the Exchange should take into consideration the rules below that took place in the Decree Regarding the Amendment of the Decree numbered 32 Concerning Preservation of the Value of Turkish Currency which is published on the Official Gazette numbered 28115 and dated November 17, 2011.

Recycling houses and refineries should seal their company emblem, fineness and weight on precious metals which they produced.  

Members who want to trade in the Exchange with these nonstandard precious metals must get certificate of assay that is prepared by the Turkish Mint or assaying institutions approved by the Mint. Members should submit these certificates of assay to the Exchange.

Nonstandard precious metals that are imported by the members should be delivered to the Exchange with their customs declaration and precious metal information form that is set by the member and certificate of assay. In case of emergency, submitting of certificate of assay and customs declaration is sufficient. The Exchange Presidency is authorized to take every measure for that.

 

Domestically Produced Precious Metal Ore Transactions

Domestically produced precious metal ore in the form of dore bar, granule and other shapes can be traded in the Exchange in two ways as below:

Domestically produced precious metal ore is refined by internationally accredited refineries or domestic refineries. After completing refining process it should be delivered to the Exchange Clearing Center in 7 business days and traded in the Precious Metals Market of the Exchange. 

Domestically produced precious metal ore can be traded separately in terms of precious metals type based on its certificate of assay that is issued by the Turkish Mint or assaying institutions approved by the Mint.

Specifications of domestically produced precious metal ore that is subject to transaction in the Exchange 

According to the article 13 of the Communiqué about Standards and Refiners of Precious Metal the principles are implemented as below:

Producer company ensures that domestically produced precious metal ore is suitable with the principles in Communiqué about Standards and Refiners of Precious Metal at most.

Members, who want to trade with these precious metal ore in the Exchange, should get certificate of assay from Turkish Mint or assaying institutions approved by the Mint.

The Turkish Mint or assaying institutions approved by the Mint issue a certificate of assay that describe features, fineness and weights of domestically produced precious metal ore.

 

Order Types
Standard Precious Metals
Normal Order
The order which is submitted for the standard precious metals that are defined in the Communiqué Concerning Precious Metals Standards and the Refineries Subject to Transactions in the Precious Metals Exchange which is published on the Official Gazette numbered 26350 and dated November 18, 2006 by the Under-Secretariat of Turkish Treasury.
Official Auction
This type of order responds to the precious metals sales of courts, official institutions in the Exchange. Exchange is authorised to determine the rules of this type of auction. If needed the Exchange can sell precious metals on its own initiative. In this case the Exchange takes the commission.
Fixing Order
This order can be given only for standard gold. It’s executed over London am fixing prices and can only be in US Dollar and T+0 maturity. If “0” enter to the price section it means transaction will be executed at the fixing price and if a ± US Dollar value enter to the price section it means transaction will be executed up or below over the fixing price. Fixing transaction is not included netting transaction.

 

NonStandard Precious Metals
Nonstandard Order
The order which is submitted for the nonstandard precious metals that are defined in the Communiqué Concerning Precious Metals Standards and the Refineries Subject to Transactions in the Precious Metals Exchange which is published on the Official Gazette numbered 26350 and dated November 18, 2006 by the Under-Secretariat of Turkish Treasury.
Official Auction
This type of order responds to the precious metals sales of courts, official institutions in the Exchange. Exchange is authorised to determine the rules of this type of auction. If needed the Exchange Presidency can sell precious metals on its own initiative. In this case the Exchange takes the commission.

 

Domestically Produced Precious Metal Ore Transactions
Ore order
This is a type of order which is submitted for the precious metal ore in the form of bullion, bar, dore bar, granule, powder or scrap to be traded in the Exchange.
Official Auction
This type of order responds to the precious metals sales of courts, official institutions in the Exchange. Exchange is authorised to determine the rules of this type of auction. If needed the Exchange Presidency can sell precious metals on its own initiative. In this case the Exchange takes the commission.

 

Order Sizes
Standard Precious Metals
Minimum amount for precious metal orders is 100 grams and increases by multiples of 100 grams. Each bullion/granule package order is matched by the same bullion/granule package and their settlement is done with the same bullion/granule package.

NonStandard Precious Metals
Transactions are executed over the amount and fineness given in the certificate of assay.

Domestically Produced Precious Metal Ore Transactions
Transactions are executed over the amount and assay given in the certificate of assay.

 

Trading Commissions
Standard Gold Transaction Commissions 1Kg. -100 Kg. arası 1,5 per ten thousand
101 Kg. -1.000 Kg. 1,25 per ten thousand
1001 Kg. ve üzeri 1 per ten thousand
Standard Gold Transaction Commissions of Same Buyer and Seller 1Kg. -100 Kg. arası 6 per ten thousand
101 Kg. -1.000 Kg. 5 per ten thousand
1001 Kg. ve üzeri 4 per ten thousand
Standard Silver, Platinum, Palladium Transaction Commissions 1,5 per ten thousand
Same buyer and seller of Standard Silver, Platinum, Palladium Transaction Commissions 3 per ten thousand
Non Standard Precious Metal Transaction Commissions 0,5 per ten thousand
Same buyer and seller of non Standard Precious Metal Transaction Commissions 0,5 per ten thousand
Domestically Produced Precious Metal Transaction Commissions 1,5 per ten thousand
Same buyer and seller of Domestically Produced Standard Precious Metal Transaction Commissions 6 per ten thousand
*5% Banking and insurance tax are charged over commissions

 

Trading Commissions
Delivery Out (Standard gold) 2 per thousand
Delivery Out (All other precious metals) 3 per thousand
Delivery Out (Non standard precious petals) 0,75 per thousand
Custody Commission for Precious Metals –Monthly
( not charged for the first fifteen day)
1 per thousand
Custody Commission for Investment Partnership and Investment Funds - Monthly 1 per thousand
Custody Commission for third party and company
(Charged three months in advanced)
 4 per thousand
*5% Banking and insurance tax are charged over commissions

 

Clearing and Collateral
Clearing

Clearing transactions are executed by the Precious Metals Market of the Exchange and Istanbul Settlement and Custody Bank (Clearing Bank). The Exchange acts as the buyer to the seller and the seller to the buyer. In this way obligations of precious metal and cash can be met without gathering parties of the transaction.
The buyer should deposit money equivalent of precious metal to the Clearing Bank. Then representatives of the member can receive their precious metal from the Exchange’s vault by submitting letter in written form. The seller should deliver precious metal to the Exchange vault.
The clearing mechanism functions as follows: The precious metal is transferred from the seller's account in the Exchange’s vault to the buyer's account. This is done by the Precious Metals Market Department. The payment must be made to the Clearing Bank account that is approved by the Exchange. Then the clearing is completed.


Collaterals

In order to have the right to trade on the Precious Market, the members have to submit two types of collaterals to the Exchange.

Membership/Risk Collateral
The first of these is the risk collateral which covers the possible losses that a member may cause to other members or the exchange. It is not allowed to trade without paying that collateral. Membership/risk collateral can be paid as below:
• 10.000 US Dollar or equivalent in letter of credit
• Turkish Lira or Euro equal to 10.000 US Dollar
In the case of impairment of collateral in Turkish Lira and Euro the remaining part should be completed.
Trading Collateral
This collateral is required to make transactions. It sets the upper limit on the transaction volume of a member. A member can trade up to 25 times the sum of trading collateral for T+0 and 20 times for T+1, T+2, T+3, T+4, T+5 and 12 times for T+6, T+7, T+8, T+9 and 10 times for T+10, T+11, T+12, T+13, T+14, T+15.

 

Accepted Collateral
The collateral that is submitted by the members should be as below:
• Turkish Lira
• US Dollar, Euro
• Letter of Credit in Türkish Lira or US Dollar
• Treasury Bonds and Bills
• Precious metals delivered to the Exchange vault.

 

 

 
 
Rıhtım Cad. No:81 34425 Karaköy - İstanbul Phone: (212) 292 66 00Fax: (212) 292 66 18
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