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Ao~&-IA ~.?&T .?IL"I

FEDERAL NEGARIT GAZETA
OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA
(l~ ""r-*" t...r..~"<e -'t<J"h~Q'<e tT1l1\..h
1';"1111 i'cnt,r-"f 9"hc 0."" mfJ4:~:" rcnn,

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hif'"f.' 4!'rC

?;Ht1il Kjil

2007

CONTENTS
'}.9"

f'1\. .1.\,-*,.f' f'9"C .1. 10.f' D?tJ:<J:'/J 1\if' ~

Proclamation No. 550/2007

1'1\ritt nt

Ethiopia Commodity Exchange Proclamation No. .Page 3898

PROCLAMATION

ntp~ 4tIfC ?;f!lIIiif'ljj

f'n.-rf-k f ~C-r 11lf'

13thYear
No.61
4th
ADDIS ABABA
September,

NO. 550/2007.

A PROCLAMATION TO PROVIDE FOR THE

ESTABLISHMENT OF THE ETHIOPIA
COMMODITY EXCHANGE

/\lP!**~

"'}.oce;
(J11lf
ta.e ro1.+ODlPl.+
f'U1t.~'
WHEREAS transforming the country's agriculture to
f'itOD~l.-r
FC'}-r
D1Jo;J1C f:U'I-r')
I\OD~'1{'1 market oriented production system has been envisaged by the
(J)lt~
ODUft.f
ODIf't- (JOD'}"'}F-r
cpe; cpe; major policies of the government as critical tool for poverty
Tl\.(a.?J"f
f'+1/\?
(JODIf't-I
alleviation;

it'lft+;;: f''''}.oce; it~ ~:Y:"f ro~:t'~

f'1(Jj'
/WHEREAS
it is important to promote increaseD
ODl.)f h '}Jtj'1"f-e;
/\~C:t':frof'+if 1\ CP;J participation of small agricultural producers by
OD1.Ir1.C
h '}Jt"ft\.
(JD1J
f:l.",}
(J1(Jj'ro- ta.e providing up-to-date market information and enabling
them to negotiate better prices for their products;
.eta:fro-') +It-rb': lP!lt1."'} +10. (JODIf't-I
I\lLU?" ~AflJ~ r FC'}:'"
fl\w< f''''}'(Jce;. ?"C.y-."f') f'1(Jf
itft&A1. 1ft; (JOD11~I
.

fl\ro-e;
FC'}:'"

roT'I:'"
D1J**?"

(]n.:"'f-k f &...e..lrta~ .e..qohlr(a.f~ t.T'Ol\.h

J11 OD'}"'}F~ it'}~?\:1(;
liil ODlPl.:'" f'~h+
1\0)<:t'w<~A::

WHEREAS to these ends it is found necessary to

establish an efficient, orderly and unified marketing
system for agricultural commodities;
NOW, THEREFORE, in accordance with Article 55
Sub-Article (1) of the Constitution .of the Federal
Democratic Republic of Ethiopia, it is hereby
proclaimed as follows:

hlf:A it'1:
l11~tata

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ittif!'C CiJiI
.eU itCP~ "f'n.:"'f-k f f'?"C:'" 1(Jf D1J**~f
itCP~ ~TC
~f2/Ijjf1jj"
+'Oir'
l\.l11~ft
.e:ftaA::
.f'1~ 'P;J
Unit Price

5.15. ,.

PART ONE

GENERAL
1. Short Title
This Proclamation may be cited as the "Ethiopia
Commodity Exchange Proclamation No. 550/2007."

~;Jt:" ;JH.fT/ ;r. .'t. 4', ii1i.li

Negarit G. P.O. Box 80001

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Unless the context otherwise

Proclamation:

38

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r~&.?t~o7o
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requires,

in this

1/ "clearing institution" means the Ethiopia

Commodity Exchange or domestic bank or
similar financial institution recognized by the
Ethiopia commodity Exchange Authority;

2/

"clearing and settlement" means the procedure

by which an organization acts as an
intermediary and assumes the role of a buyer
and seller for Exchange trade transactions in
order to reconcile orders between transacting
parties, and insures the physical or financial
settlement of the transaction;

Y.:C~'r "
Oh1C;~~+
m~~
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Negarit

2. Definitions

r :Pt\- h111'fIt\." +C'''~ r~.f'()mm- ttAtf~

O+C:

Federal

3/ "authority" means the Ethiopia Commodity

'Exchange
Authority
established
under
Proclamation No. 551/2007.

4/

"commodity" means a product which is

interchangeable with another product of the
same kind;

5/ "commodity exchange" means an exchange

where standardized commodity-linked contracts
are trad ed;

'k/

"m-A" 1PJl\7o l\~C7o 10.e "J'fI~'r

f\IlA h'}~'1 ~C7o l\OD"JIj7o m~~
l\ODn'J' m'J' tflj r.,.".'J~c; r~C~1
ODm1:
1f.'J:
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r~tf'}07oC;
r~c'l:
chh'fI
r~/..?t~o7o')
+1 01lCliC r~.f'tt707o
t)~~~7o ~m.I

6/. "contract" means a standardized agreement to

buy or sell a specified commodity, detailing the
amount, grade and price of the commodity and
the date on which the contact will mature and
become deliverable for purposes of trading on
the Exchange;

%/

"~;1-"
1PJl\7o r1..fbh7oC'~ht)
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r 1..fbh7oC'~ht)
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t;r.1~C'
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m~~
O"'ODl)l)~ I1J.1..?J:f-r~OD~6J!':

7/

r~"h:
OD:)1" ~aJ- I

r~.(ct)

m~~

r~hlPJ:r-

"data message" means information generated,

sent, received or stored by electronic, optical or
similar means including, but not limited to,
electronic data interchange, electronic mail,
telegram, telex and telecopy;

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A tJh i: r .f' 1-""'hJ)' ODl~ (J~,Ir U? ro' r 0 Y.'/>
OJf, r .,. '/>l)f, 'I'''' '1'f OD If~.'" "lIT!ODA h.'"
'I':"r

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rOJy.~..", ,/>,., r9DCi: chh.n r~~.~9D(J..,.

10/ "futures contract" means an exchange traded

contract to buy or sell a commodity for delivery
of the physical good at a specified future date;

" rOD .r 'IC.r 11" '0 " OIJ1\.} "'J'IC &.~ O?

PJ"f 010.r ~.e 1\000&.tJ~:" h1.f.' "'J.o
.e :,. 0 OD.r 'If .,:,. I\. .r fI~ 9" m. :,. r O? 1 ()
1111'0 "OJ'I

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~ ~ OIJ1

ODODII~: rO?.r

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A OIJ.} O? 'I,fl1; C ., en'I

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() en'" OIJ1\:" r i' &.T C' () en- OJ.e 9" 0 ih '?

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13/ Ministry"- means the Ministry of Agriculture

and Rural Development. of the Federal
Democratic Republic of Ethiopia;
14/

"person" means any physical or juridical

person;

15/

"spot contract" means an exchange trade

contract for immediate delivery of and payment
for the commodity

EXCHANGE

3, Establishment

r9"c:"

10.r /hll.u O~~

"r9"c:" 10.r" hri'(}1\

(}1\11:".,-f; rOD1'? ~.}
()en-.,:,.

12/ "member" means any person that fulfills the

requirements
of Article
8(1) of this
proclamation;

PART TWO
THE ETHIOPIA COMMODITY

r h. :"~k.r r9"c:" 10.r

~/ rh.:"~A'.r

11/ "margin" means the funds which must be

deposited by exchange actors as collateral for a
&iventransaction for the exchange;

chh.Oc; h~.r OJJt.rOJ'~'rO?&,~9"o:"

r9"c:" ,?o.e.} en-A "OJ'::

r.

8/ "electronic signature' means data in electronic

form, affixed to or logically associated with, a
data message, which may be used to identifY
the signatory in relation to the ?ata message
and to indicate the signatory's approval of the
information contained in the data message;
9/ "exchange actor" means any person recognized
by the Authority who engages in the business
of buying and selling exchange trade contracts
for others or for his own account;

9DC''''''' "ODO'l' OJf,9D "ODo/II'''' rU?y.lol

r 9DC..,. Nl f,'''' OrA 'IOJ'I

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1.f: P' Ir r 'h')lIT!Ir (Jl)
c; '1')'
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P' A fll~' tJOJ.:"

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1/ The Ethiopia Commodity Exchange (hereinafter

'the Exchange') is hereby established as a
wholly state. owned market institution having
its own legal personality.

2/ The Exchange shall have Members, with

permanent seats, who meet the necessary
requirements set out in article 8 ot: this
Proclamation.

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The exchange shall be demutualized with a

separation of ownership, membership, and
.
management.

4/ The exchange shall be governed by this

proclamation, the proclamation to establish the
Commodity Exchange Authority No. 551/2007,
and other relevant laws.

The exchange shall have head office in Addis

Ababa and may have branch offices elsewhere, as
may be necessary.

The' purposes for

established are:

f?DCT 10.ew' f-tcJ:cJ:OOOT 'JI\DfJ?Jr

f"?h-tt\.T
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QI

3901

6. Purpose

DfJ SD r
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EI

Gazeta No. 61 4th September, 2007... page

5. Head Office

f?DCT 10.ew- tp'l oop.-t.e Il.T OltJtfl 1tOfl

,f

3/

Negarit

The Ministry of Agriculture

and Rural
Development shall be the supervising authority of
the Exchange.

l;. tp'l oop.-t.e Il.T

iii

Federal

4. Supervising Authority

-t., fl1fl1t q t\ p.- A fl1"}

"?~/H;~, f?DCT 10.ew- -t"fl1fl1t

flt\p.-Afl1"} ~tf'lA::

i.

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t\ CDfl11\:t~CD-

UPlPlT f"?tf'"
DIJI1;J~TI

SJOC'.y.

UPl~?Jr"}
t\rl111~
011UP'I ce
ltlP~C1

'1 ,0 ~

which

the

Exchange

is

1/ to create an efficient, transparent, and orderly

marketing system that serves the needs of
.
buyers, sellers, and intermediaries, and that
promotes increased market participation of
Ethiopian small scale producers;

2/ to provide a centralized trading mechanism in

.
which offers to sell and bids to buy are
coordinated through' a physical trading floor
with open outcry bidding or an electronic
order matching system or both;

3/ to provide automated back office operations

.
to record, monitor, and publicly disseminate
information on Exchange transactions;

4/

to provide standardized grade-specific

contracts as the basis of Exchange trading;

5/

to 'conduct trading on the basis of product

grade certificates and guaranteed warehouse
receipts;

CD1'~T .eI\Tw- w-fr'r1

l;1 PSJOCT J!.l~ fSJOflhc CDl~T"}'

tpflT'I
.et\w- PlJ:P DIJhDIJ:F J!.lt'1~"} UPlPlT
ODIJY:l'1 '1'O~T DIJil~Y:I

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101OJ-'}Cj ritll~-t.,}
UAOJ<CjCj
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t\DIJl;111' 101OJ<'} O:t>c.O ODh.+-tA:

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it";1

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to avoid Contingent risk to the market

through implementing risk management by
employing proper management mechanism;

7. Capital

r~c.}
101OJ- r-tt..,,1.
il1:.+A 'OC If:!
~t\.r-'}
ItJ.t\-r OD.y. I/~ta ~t\.r-'}I
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3902

9/ to ca~ry out market surveillance to ensure the

integrity ofthe members and of the market;

-t<1JIlt-<e

11-C.+A

4th September, 2007... page

to provide timely market information to the

public'

DIJ:t>l.CH

ill

Gazeta NO.6]

7/ to provide a mechanism for dispute resolution

through arbitration;

itDIJilf, '-r

FCf}-r ODHC;1-rI
r10 I

Negarit

6/ to clear and settle all transactions conducted

on the Exchange to minimize default risk;

/~:r1
'1t\OOaJff)'} rUIJ.f :J1'oo. i'tf.:JsP"f1
t\OO<l''1fl ()9C'} 1()fo>- rUIJ.hlJaJ'i- Hl,e-f.
"f1 h~flJ chh.() root.7t~I

1:1 hchC''f

Federal

The authorized capital of the exchange is Birr

250,000,000 (Two Hundred Fifty Million) of
which Birr 90,000,000 (Ninety Million) is paid in
cash and in kind.

8. Membership.
t\ODO''}

r~t.A

<1JDIJ'}7f OJ-~ (}OJ<:

1/ A member shall be any person:

VI

Ollt\.-All)~
ODODtl
ODlPl-r
0 <1J.of,-r
t.~~ '-r
,}OJ-:t>Cj
117:
hCj
(}.
OJ f, ~
t\ I
t\ tt\ t\. ~ (}OJ- (}. A
O~C-r
<1J'Of,-r .-t- r-t(}DIJt-:
ODO',} f,C;CO'+A::

a)

recognized as an exchange actor, under the

directives of the Authority; and

b)

engaged in the trading of exchange

commodities either for his own account or
for the account of others,

r~c-r
101m< 0~1.'<1J1a}< tJ').;t-$D'f
ODIPl-r r~c-r
10.fJaJ<O'l~ t\.-t~t\~
OD6li).$D'f I ~ ~~OJ<
r~ 'f (\. *~
OD'"
itll~-r f,C;~'+A::

2/ The Exchange shall have members with

permanent seats which are freely transferable,
subject to the terms and conditions that may be
prescribed by the Exchange.

EI

O~C-r 101OJ< r-tIf.~~Cj Ollt\.-All)~.

r81.~ r~c-r, 101m< rOJ-fl1' "'}(1'f

3/ The Exchange rules and by-laws to be developed

by the Exchange and approved by the authority
shall
set
requirements
necessary
for
membership.

t\it 11A '-r

7f $D'f'}

ill

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ODODIf

f,1. '<1J;1(\,::

O~C-r
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rOJ<fl1'
"'}(11'r-tODt\h-f:-r'}
r itllA '-r
ODODIf7f$D'f
DIJ,}~OJ<~
(}OJ<
ritllA
r~I~~
OD'" OD6li). t\. 1 Ii f,"1- ~ A::

4/

Any person that fulfills membership

requirements set by the Exchange rules and bylaws may purchase a membership seat.

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t;'jj .,..t lilf'1.il

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1(JfCD- f'ro-{}1'
y"}.(J (Ji'ODf\h-f;-r OD.(J.y.i.lJ 1'~qo"f
.
f'ODmct~ OD.(l-r .eflflJA::

'il

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h lbl\":r. OD.(J.y."f (Ji'GL1,OIJt

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1 (JJ'CD- (i.OIJ~'}.y.:Pf ~ ,e~h
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Negarit

Gazeta No.61

41hSeptember, 2007... page

3903

5/ Membership shall entitle a member of the

Exchange to exercise such rights and privileges
as provided under the Exchange rules and bylaws.
6/ Membership shall, among other things, confer a
right to. trade on the Exchange

9.

Liability of the Exchange,

Third parties

Members,

and.

1/ The Exchange shall be liable for any acts or

omissions of its officers, directors, and
employees.

2/ The Exchange shall be liable for any failures

relating to:

"-.r:t\-f:-'"

.t'mf~ 'lOr-'
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a)

Exchange trading system;

f\1 h~c-r

b)

Exchange
system;

c)

Exchange-operated
warehousing,
warehouse receipting, and warehouse
receipt central depository;

d)

Exchange-operated grading and product

certHication;

e)

Exchange-operated
settlement

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f.lfc;t\.::

information

3/ The Exchange shall

total asset.

llJc

dissemination

clearing

and

LJ liable beyond its

4/

The members shall be liable for the non

performance of exchange- trade contracts in
accordance with relevant law.

5/

The members shall. be liable for acts,

omissions or failures of any agent acting on
their behalf.
6/ Third parties certified or affiliated with the
Exchange
to perform
warehousing,
warehouse receipting, warehouse receipt
.central
depository,
grading
and
certification, clearing and settlement or
other functions shall be liable in
accordance with the relevant contracts and
laws.

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f~CT 10fCD-h*~
f~CT

Federa] Negarit Gazeta NO.61

10. Organization

h fl &.fI '1. CD- ;} 1\k

~C;~.;rAB

21 a Chief Executive officer; and

31 The necessary officers and staff.

91 ':{.e; lP t- l' "if"f 1

11. Composition of the board of Directors

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{i/

f~~t.h1'C'':{' IlCY: h;1JJt- h1Y: hfll\T

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II.

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E/

21 The Chief Executive Officer shall be an

additional ex-officio, non-voting, member
of the Board of Directors.
31 The term of appointment or election of a
Board Director shall be for a period of
three years. A Board Director shall be
eligible for reappointment or re-election.
41 In order to maintain the continuity of the
activities of the Board of Directors, the
terms of office of its Board Directors shall
not expire at the same time.

fft++CD-

"
In the event of vacancy,
the board of
Directors shall bring the matter to the
attention of the Ministry or members of the
exchange so that another person is assigned
in the same manner as the Board Director
who has vacated his position

51

n;r h~T 0"?.tf10T

~~t.h1'c
v. }.;r
IlCY:

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OJ.eSJO fSJOCT 10fOJo
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'''~/II~'l' .elJc;..;rA:

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11 The Board of Directors shall consist of

eleven members, of whom six, including
the chairperson, are appointed by the
Ministry and five are elected by the
members.

Y: ~ IJ fOlJ~ Itl'

ODO.} (J)~ SJO O1'OD ~ mOT

01' ('10
1\,1\ Oro- h1-'tOD~'r
f~~t.h1'C'"f
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ofthe Exchange

11 a Board of Directors;

IlCY:f

~/ h'}~ 'Pe; ;1JJt-hfl.l~"?.1 he;

r/

3904

The Exchange shall have:

10frool

{i/ f~t.h1'C'"f

4thSeptember, 2007... page

] 2.

1'DJC}C

UI Ulrecwrs

The board of Directors shall have the powen

and duties to;

P'Afll'}C;

11 appoint the Chief Executive Officer of th

Exchange;

rrc.),
'Iflfo"'} 'PC;P' Ir"i'lb.~tnt
.
.ei'itnJA:

f9"CT 101OJo'} OOI\.e~T .e~fl'mt-A

Powers and Duties of the board

2/ oversee the management of the Exchange:

l\ 'PC;(JJo P'thfl&o~"?. 1'mt

ftf~.
;}l\k91':{"}
:r1'C 1
9" Y.flC; fl'},fI'}
h'}-'tv.9" Y.lfPl1C;hOtr:t::OJo'}fO ~ ~A 1

3/ approve the employment, assignment at

dismissal of 'the Officers of the Exchan
accountable to the Chief Executive officI
including their salaries and allowance;
.

11\

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t!i! +1 Ijjf'jjj

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r1\y.?
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.

'HU

Federal

Negarit

Gazeta No. 61 4th September, 2007... page

3905

4/ approve the corporate plan and targets, Exchange

transaction fee structure, and risk management
strategy of the exchange:

fOf::PA1

li/

r,t'fJ)~

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r'l""o

ill or(l}~": r~.eCJ'}{}CJ r Ft.

trc.y.":f- t\0?~-{}-I:~.I~CllA:

6/ propose to the Ministry to increase or decrease

the capital of the exchange;
7/

ensure that proper books of accounts are kept

for the exchange;

8/

submit books of accounts to the auditors of the

exchange;

9/

submit periodic financial reports and reports on

activities to the Ministry;

OO"/t\6T'1,

"1~{}:P(}'

OClt\FAfl}~-

OO?\1.ch "11.i'mO~

hllA'I-r'}:
h&.~~~'}:

,}"?,f:1: rh~/CJ
chh.o
r~c-r
10/m-'} r"/.o.e-r

m-(\o":f.'}

5/ approve the re-investment of net profits into

specific activities or investments;

00111'0 Oh"?llO-

'1;1 t\~C-r 101m- ~Jti'~":f'

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II

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1. '} (l ":f.CJ 00 00 II ~ ?J"f ,r OJflJA:

trc;:

10 I m-'}

10/ prescribe and amend exchange rules and

req~irements regarding membership, clearing
and settlement, and contracts traded on th'\i;
Exchange, subject to approval by the Authority;

I i'j"{i~ A :

I~I Ollt\FAflJ~
OlJ1.~m' r~c-r
101mrm-{}1' 1.,}'O Oi'1. '111m- OOlPl.-r r~c-r
10/m-'} hJt{} hllA .e~O~A: hhllA'I''''

11/ admit, suspend, or expel a Member of the

Exchange, according to the provisions of the
Exchange rules and by-laws as approved by the
Authority;

,r"/PaA OJ.e~ I{}CJ'O:1'A 1

I~I O~C-r
101mri'IIl..'JOlPa~'-r
,,v"'CC}-r Oh "/llOI l. ,'J"/flJA:

lEI r(lC~.1 ~~ht. h~c-r

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r'{i~"/A CJ
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121 r~c-r
10/m-1 Oh"/ll(]- t\oo~t.-r
rO?l~. ri't\If. f10?-I:?J"f1 IWchD1JA:
Ie.

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p't.:fOJ-1

12/. ensure the proper functioning of dispute

.
resolution mechanism' provided by the
exchange;
13/ select and assign its secretary from among the
exchange staff;
14/ appoint various committees to facilitate the
proper management of the exchange.

13. Liability of the Board of Directors

Oi'1fi.m-

Oh"/llO~

llt\D1JhCJOJCJ:fm~h1 l-r O~C-r 101m~.e

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rPa-r
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Oh'} X:'-r i'm/~
f,trCJt\.::

1/ Board Directors shall carry out their duties

with due care.

2/ They~hall be jointly and severally liableto the

for damage caused to the exchange by their
failure to properly carry out their duties.

1~

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/...fvl.-./.\ ";Jt,..,. ;Jtl.fl/ o/I1'C ;.;/i '1ih(},

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tll. r9"c-r "?1l.e-r c&fr'"f

/i/ f9"CT
O~Yfn

m-i\"":f.

Gazeta No.61

4th September, 2007... page

3910

ili\""e&flJT'i ili\rilhc~T

1/ The Exchange shall operate with spot and/or

future contracts in agricultural ~ommodities.

~ no P' C .y.

1\.e

~frCT
10Y~ rrC~1
~lW'
rc~
r~~C'OOT'} ~1J n,+ h'}~IJ.r I\.flo":f.
rm-A .e."};J'LfP":f.yt]~~ ~A yn;J~ A::
tit:. ~l

Negarit

22- Exchange Contracts

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m~Y~~
m.er
m~~T

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Federal

'U'''

""l:J1tiriJ.

2/ The Exchange shall develop the grade basis,

date and place of delivery of the commodities
and other contractual terms for each contract.

23. Grading and Certification

/i/ rSJDCT 1nYm- 010Ym- i\~t]~.f.'

""/'O.eT f}l\t1IJro~cf: m.er ~~ll.e"T
Y11- ~lWfP"f1 YmflJA' .em'O,PA::

11 The Exchange shall develop and maintain

Exchange approved grades and standards for
the purposes of trading on the Exchange.

Y./ frcT
10,em~lW
rt1lJm-flJTJ
rOtJl:J11' P'1r- YhJm-JA m.er 1\.1\
Y'iI+~
{)m- .eUT,. P'1r- h'}~1P1r.e,t~~A'
i\rCT ""/'O.eT f}l\t1IJrrCT
rrilhc
ml~T .e{)flJA::

2/

The exchange
certification or
same and to
certificate for
trading.

r/

3/

The exchange shall carry out its duties under

this Article without prejudice to the Quality
Standards Authority of Ethiopia as the solE;
government organ mandated to approve and
declare Ethiopian standards.

4/

Any third-party exchange-approved grading

and certification agents shall not engage in
commodity trading within or outside the
Exchange.
'

fh.Tf'A-Y

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h~.f.'~

i\""m-flJT

'O:J~~ pIA flJ'} r~{)mmrh. Tf'A-.e

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pIAflJ1
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h'}~?\ r~{)m-T'} ~'?lllr-'r fhJm-JA::

Q/ rrCT ~lW'} i\OtJl;J11' orcT 10Ym~~ll.e"T Y1'f t1IJ1~m-r Y'{)~~ m1'}

m.er ~mt].e nrcT 10fm- m-{)1''i

hrCT 10Ym- m-6p,>orCT ""/'O.eT
P'1r- no"'+~

h.e"fAr::

$ Q. ili\ IJ~ U?otltJ!Fc;~l{)~

lil

24. Warehousing

r6:J> "'1h"'1:F OD;J,,1 J.>.l(}~1' p'CO:" illJ>}!~'rC Efif~/Ii!f1?;

il1'1>7\ ~~ h1J.>.1'm()'I>
If'iT r9C'} 1()fo>- ra/.ncif
9C.y.1~ rh
.nJ.>.'} ilt\l'Jh11f r9C.y.~" l1Cl1C il{J1'~J.>.C,}

P't.

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P'

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If

t\aHl.e~ l}i\"'1sP'f r~c:"

1()f0>-1 r6:J>sP'f
t1IJh"'1:FJ.>.l(}~:r OD{Jm'''''.e~"i\A;:
~I

()6:J> "'1h"'1:F OD;J,n J.>.l(}~~-' p'Co.}

"~'rC

shall carry out grading and

approve a third party to do the
issue an Exchange produce
the purposes of Exchange

Efif~/Ii!f1?;

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illJ>}!-

r.f'(}mo>-

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r 6 :J>sP~-. O'Jh"'1:F OD;J II'i 'f1
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1()fo>raH1Cif 9C.y.~" rh.nJ.>.''''' ilt\l'Jh1J r9C.y.'f
l1Cl1C il{J'f'~J.>.C1 P't. t\~IPt.
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ml<l>'} OD{Jm'} OJ.e9 t\"1.n.e-l:
l}i\"'1 sP~-- r~c'''''
1n 'o>-'} r6:J> sPI. "'1h"'1:F
J.>.l(}~~-- OD{Jm'} .e:ri\A::

11
.

and receipts

Without prejudice to Article 26 of the

Warehouse Receipts System Proclamation No.
372/2003, the Exchange may operate
warehouses to carry out weighing and
inventory
management.
of
agricultural
commodities and issues Exchange warehouse
receipts for the purposes of Exchange trading.

2/ Without .prejudice to the powers of the

Ministry to regulate warehouses under the
Warehouse Receipts System proclamation No.
372/;2003, the Exchange may certify a thirdparty warehouse operator to carry out
weighing and inventory management of
agricultural commodities
and to issue
Exchange warehouse receipts for the purposes
of Exchange trading.

11\

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()~'1"'1'~C; ()h.i\.h''''C'~h

Federal Negarit Gazeta No. 61 4thSeptember, 2007.., page

39]

31 The Exchange shall maintain an automated

central depository of Exchange warehouse
receipts or approve a third party to do the
same.
41

Any third-party
Exchangeapproved
warehouse operator shall not engage in
commodity trading within or outside the
Exchange

25. Clearing and Settlement

"6?;. h Cj:.f Cj '? F..:r 00 L '" 01J..f

00 L 'It01J.J' -t ~
*

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."

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1I The Exchange shall clear and settle all

transactions on the Exchange either clearing
internally with affiliated, recognized Clearing
Institutions or through third-party Clearing
Institutions, in accordance with the directives
of the Authority.
21 Members shall maintain accounts with any of
the affiliated recognized Exchange Clearing
Institutions, in accordance with the Exchange
by-laws.

31 Members shall grant written notice of Power of

Attorney to the Exchange authorizing the
Exchange to issue debit and credit instructions
to affiliated recognized Exchange Clearing
Institutions, for the purposes of clearing and
settlement, in accordance with Exchange by.
laws.

41 The Exchange shall reconcile daily each

Member's trading position on trading days.
51 The Exchange sh~ll generate a written and
electronic daily net obligation statement for
each Member on trading days.

fOJfTlA::

P~CT
1nJ'OJ- Pttfl~T1
poo1nJ',f'
tt*~C;
(J-);:r oo.,t\66J.YJ1'1
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.
-t*OTJT ooootJ' .etlflJA::

P~CT 1nJ'm-C; ttfl~-t. PFir .,T1-"T

~~rOJ- Ph~J' OOL'lt01J.J'-t*OTJT 11,1-(1
htt'H~' ttflA w" f\,~ ttflA w.e~
h~CT
1nJ'OJ- Pfl1h 'll}.n w" t\A

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penh
'I..Uf.n Ph.t\.hTC'~h{)
-t~t\&.J'1
nOOffi~~
*01J. ooootJ'YJ"f
h.}JtJ'{}-t~A4-.eL~ ~~:t~PA::

61 The Exchange shall, on the basis of the net

obligation statement, instruct the affiliated
recognized Clearing Institutions to settle the
obligations of the Members.
7/ The Exchange and Members shall be allowed
to give standing written instructions to
affiliated recognized Clearing Institutions to
authorize such institutions to transfer funds to
and from Member and Exchange Accounts
established in these same institutions for the
purposes of Exchange transactions, on the basis
of an electronic instruction.

/".~.t..A

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Federal

8/

~'}.ct lJ &.:':OJ.

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Gazeta No.61

41hSeptember, 2007... page

3912

Notwithstanding provisions of any law,

regulation, directive or customary practice
that requires a signature be. handwritten in
order to have legal effect or enforceability,
signature requirement under Sub-Article (7)
of this Article is met if an electronic
signature is used to authorize fund transfers..

9/ Any Clearing Institution shall not engage in

trading activity within or outside the
exchange.

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Negarit

26. Market Surveillance

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The Exchange shall, in accordance with the

Authority's Directives, establish and maintain the
following market surveillance tools:
11 market loss monitoring, which is a system to
track losses of Members:

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maximum open positions; which is a system

to avoid build up of open positions above
Exchange-specified limits:

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price spread limit, which limits allowable

price variation on a contract; or

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4/ other similar tools as the Authority may

reqUire.

27. Risk Management

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The Exchange shall, in accordance with the

authority's Directives, establish and maintain the
following risk management systems:

11 member security deposits, a deposit which

determines each Member's exposure:

2/ . settlement guarantee fund, which guarantees

net settlement liability of the Exchange;

3/ margin requirements, a deposit that serves as

collateral for each transaction;

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4/ trading exposure limits, which monitors

Member exposure relative to the security
deposit;

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5/ daily settlement of net obligations on market

positions on trading days;

6/ delivery default penalties,' which enforce

discipline in delivery of goods; or

7/ other similar systems as the Authority may

reqUIre.

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11 The Exchange shall, subject to the approval of

the Authority, establish rules and procedures
for the resolution of disputes arising from
exchange transactions through arbitration.

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2/ The rules of arbitration to be established by

. the Exchange under Sub-Article(l)
of this
Article shall, in particular, prescribe:

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c)

the qualifications and manner of

appointment of arbitrators;
the procedures of the arbitration
proceedings: and
.the payment of arbitration related costs.

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3/ The Exchange shall provide secretarial service~

for any arbitration proceeding to be conducte(
pursuant to the provisions of this Article.
29. Security

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The Exchange shall provide and maintain

system for protection of personal, financial, tra(
and other data relating to the affairs of tl
Exchange.
30. Changes to the Operations of the Exchange

The prior approval the Authority shall be requir

to change the operations of the Exchange w
respect to:
11 the by-laws and rules of the Exchange;

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2/ membership;

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3913

28. Dispute Resolution

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Federal Negarit Gazeta No. 61 4thSeptember, 2007... page

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3/ fees;

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3914

PART FOUR
MESELLANEOUS PROVISIONS

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31. Power to issue Regulations and Directives

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Federal Negarit Gazeta No. 61 4thSeptember, 2007... page

4/ trading system;
5/ contracts traded on the Exchange;
6/ market information dissemination;
.
7/ clearing and settlement;
8/ dispute resolution; and
9/ security.

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11 The Council of Ministers shall issue

Regulations necessary for the implementation
of this Proclamation.

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2/ The Authority shall issue directives necessary

for the implementation ofthis Proclamation.

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32. Inapplicable Laws

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No law, regulation, directive or practice shall, in

so far as it is inconsistent with this Proclamation,
be applicable with respect to matters covered
under this Proclamation.
33. Effective Date

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This Proclamation shall come into force up on

Publication in the Federal Negarit Gazeta.
Done at Addis Ababa, this 4th day of September,

2007

1\Jlft 1\011 ~d1f\ fiB +1 Iiil'1i1 '},~

GIRMA WOLDEGIORGIS
,?rOfl roA'( 'l.r-C'l.ft

fh.-rf-k f I e..~"ce Jlqoh~""fce

troOl\.h T~I1.~1-r

PRESIDENT OF THE FEDERAL

DEMOCRA TIC REPUBLIC OF ETHIOPIA