FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010ISTANBUL GOLD EXCHANGEOsman SARACChairmanIstanbul Gold Exchange targets tostimulate local business and internationalattention with all other globally competitiveenterprises which will provide Turkey to bea central hub for the gold business.Istanbul Gold Exchange targets to stimulate localbusiness and international attention with all otherglobally competitive enterprises which will provideTurkey to be a central hub for the gold business,due to its strategic position, as it lies in the heartof a major gold trade area, exposed to MiddleEast, Europe and Gulf States.In 2009 we have managed technicalinfrastructural studies as well as market structuresand gold backed financial instruments studies.Since 2007 we have been making important stepsto integrate international communities.For the integration of the Exchange to theinternational markets, there have been importantsteps since 2007. In March 2008 we have beenan associate member to London Bullion MarketAssociation, by May 2008 we have joined WorldFederation of Diamond Bourses, by February2010, we are honored to be part of a large familywith distinguished members, <strong>FEAS</strong> as an affiliatemember. The Exchange became a member of theKimberley Process Certification Scheme (KPCS),in August 2007, which aims to curb the flow ofconflict diamonds, with 49 participants worldwide.By 2008 and 2009 IGE organized InternationalGold Summit in corporation with Active Academyto share the experiences of the Turkish andforeign participants in the Jewelry Sector whichhas been gaining important goals in the recentyears.The Turkish gold Jewelry market has undergone amajor revival since the early 1990s with thetraditional and long-standing historical affinity forgold jewellery adjusted for modern tastes. Turkeyis now the world’s fourth largest market for goldjewellery, third largest manufacturing centre andsecond biggest exporter.The annual export is estimated at US$ 2.5-3billion, part of which is from exports towholesalers and retailers abroad while the bulkcomes from sales to tourists sold in the localmarket. By 2009, due to the supply of scrap goldto the market, Turkey turned to be an exporter ofgold in the market.As a first spot trading gold exchange in theworld, IGE was founded with the principle semielectronicsystem trading floor. By 2009, a newscreen-based fully electronic trading system hasbeen launched with remote access in order toprovide investors 24 hours trading.Istanbul Gold Exchange is having a role ofsafeguard for gold funds and gold ETF which islisted in ISE. Over 6.000 kgs of Gold kept in theExchange on the name of the 21 funds.For the upcoming years, our target is to establisha secure and organized market condition inTurkey for diamond and precious stones trading.Turkey is launching its first diamond market andaiming to become a regional trading hub for theprecious stones. Istanbul Gold Exchange is alsoworking on a project to launch a foreignexchange market, base metals market andCarbon Licenses Market. We aim to see tangibleprogress on these objectives in 2010.General InformationIstanbul Gold Exchange is a state institution whichhas an autonomous system, for precious metalstrading in organized market conditions with timeand price priority. Gold prices on the Istanbul GoldExchange are determined by the market, generallyreflecting trends in international prices. Members ofIstanbul Gold Exchange are authorized to importgold to Turkey.Services Provided• Spot gold, silver and platinum trading,• Precious Metals Lending Market transactions,• Physical settlement of the transactions,• Depository for the precious metals belonging tomutual funds and gold ETF in Turkey.• Depository for individual investors.• Authority for Kimberley Process CertificationScheme for rough diamonds in Turkey.• Determination of local and international PreciousMetals Refineries, whose products can be importedto Turkey and be transacted in the Exchange,Brief HistoryIstanbul Gold Exchange began its operations onJuly 26, 1995. The Exchange has two types ofmarkets: Precious Metals Market, Precious MetalLending Market. In markets, standard and nonstandardgold, silver and platinum are traded.Spot gold trading started at the opening of theExchange. Silver and non standard precious metalsstarted to trade in 1999. Precious Metals LendingMarket started its operations in Istanbul GoldExchange on March 24, 2000 for the purpose ofbringing supply and demand into an organizedmarket, lowering the production costs of thejewellery sector and securitization of gold.Domestic or foreign banks, precious metalscompanies, currency offices, precious metalsproducing and marketing companies and preciousmetals refineries that obtained the membershipcertificate from the Under-Secretariat of TurkishTreasury and complied with the requirements setforth by the IGE Board of Directors can trade on theexchange. There are 83 members consisting of 22banks, 32 Foreign Exchange Offices, 21 PreciousMetals Brokerage Houses and 21 Precious Metalsproducing and marketing companies.Form of Settlement and TransfersThrough member accounts by Clearing Center andClearing BankLegal StatusState InstitutionSettlement PeriodFrom T+0 up to T+9Regulated byState MinistryUnder –Secretariat of TreasuryBoard of Directors: 5 MembersPresident of the ExchangeVakifbank T.A.O (bank)Atasay Kiymetli Madenler A.S. (Precious MetalsBrokerage House)Istanbul Altin Rafinerisi A.S. (Precious MetalsRefinery)Yildiz Doviz ve Kiymetli Maden Tic. A.S. (ForeignExchange Office)Memberships to InternationalOrganizationsLondon Bullion Market Association (LBMA)World Federation of Diamond Bourses (WFDB)Federation of Euro-Asian Stock Exchanges (<strong>FEAS</strong>)Future OutlookIn 2010, IGE intends to:• To complete the new infrastructure for internetbased 24 hours trading,•Establish the customer based ordering, tradingsystem and mobile trading system• To open Diamond and Precious Stones Market,•Establishment and implementation of Base MetalsMarket in IGE,• Establishment and implementation of CurrencyMarket in the Exchange,• Establishment and implementation of Carbon,Rights and Licenses Market in the Exchange,PAGE 92
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010ISTANBUL GOLD EXCHANGEI. PRECIOUS METALS MARKETMembers 2008 2009 Change (%)Banks 20 21 1Precious Metals Brokerage Houses 11 21 10Foreign Exchange Offices 22 32 10PM Producing & Marketing Companies 8 8 -Total 61 82 212008-2009 GOLD IMPORT FIGURES(kg)2008 20092008-2009 GOLD TRADING VOLUMES(kg)2008 200950,00045,00040,00035,00030,00025,00020,00015,00010,0005,0000J F M A M J J A S O N D60,00050,00040,00030,00020,00010,0000J F M A M J J A S O N D2008-2009 SILVER IMPORT VOLUME(kg)2008 20092008-2009 SILVER TRADING VOLUME(kg)2008 200918,00016,00014,00012,00010,0008,0006,0004,0002,0000J F M A M J J A S O N D50,00045,00040,00035,00030,00025,00020,00015,00010,0005,0000J F M A M J J A S O N DCONTACT INFORMATIONContact Name Y. Oguzhan Aloglu E-mail oguzhan.aloglu@iab.gov.tr Website www.iab.gov.tr* Please refer to page 96 for the Turkey country report.PAGE 93
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