Precious Metals Swap Market

Precious Metals Swap Market

Brokerage houses and banks, which are authorised in accordance with Borsa İstanbul regulations, and the Central Bank of the Republic of Turkey may trade on Precious Metals Swap Market.

In the market, swap transactions are carried out aiming the exchange of precious metals, whose standards are specified in the legislation, with Turkish Lira, US Dollar and Euro currencies in the determined conditions. Orders are placed on house, client, investment trust or investment fund accounts.

Takasbank provides central counterparty (CCP) service for the Market and guarantees the settlement termination by acting as buyer to the seller and seller to the buyer for any transaction executed.

Order Types

In the market, orders are matched using the multiple price method. Two types of orders may be placed: limit orders and market orders.

Limit orders, are placed by specifying the precious metal amount, swap point and precious metal price.

Market orders, are placed by specifying the precious metal amount but without specifying the precious metal price and swap point. A market order may match either partially or fully with the standing orders in the system. The unexecuted portion of the market order shall be canceled automatically.

The above order types can be placed including specific conditions defined below:

a) Immediate or Cancel Order: It is the condition that as soon as the order is entered, it matches with the outstanding counter-orders, and its non-executed part is automatically cancelled.

b) Fill or Kill: This order type is subject to the condition of execution in full. If this condition is not met as the order is placed, the order is cancelled.

Order Rules

Swap orders are placed by specifying start value date, end value date, precious metal amount, swap point and precious metal price.

In precious metal sale swap orders in exchange for Turkish Lira or a foreign currency, the highest swap point and the lowest precious metal price; in precious metal purchase swap orders in exchange for Turkish Lira or foreign currency, the lowest swap point and the highest precious metal price are prioritized, respectively. For orders with same swap point and precious metal price, time priority is applied.

Precious metal sale swap orders in exchange for Turkish Lira or foreign currency match with precious metal purchase swap orders in exchange for Turkish Lira or foreign currency with same or lower swap point and same or higher precious metal price. Precious metal purchase swap orders in exchange for Turkish Lira or foreign currency match with precious metal sale swap orders in exchange for Turkish Lira or foreign currency with same or higher swap point and same or lower precious metal price. In such trades, the swap point and precious metal price of the order entered in the system earlier are the swap point and the precious metal price of the trade.

Orders are valid for the day on which they are placed. Unmatched orders and the unexecuted part of matched orders transmitted to the Market can be canceled. All the same day value-dated orders are canceled unless executed at the time the same day value-dated order entry ends. Future value-dated orders are canceled by the system automatically unless executed when the Market is closed.

If swap point and/or precious metal price of an order is changed or if precious metal amount of the order is increased, the order loses its priority. Priority is not lost if the reference information is changed and/or precious metal amount of the order is decreased.

The swap point and precious metal price tick applicable to orders conveyed to the market is 0,01%.

The precious metal price of the order conveyed to the market must be within ± 15% of the weighted average precious metal price announced by Borsa İstanbul Precious Metals and Diamond Markets. These limits can be changed during the day by the decision of the CEO.

Order Sizes

Orders are transmitted in 1 kilobar and its multiples. The maximum order size to be transmitted at once is 300 million USD or EUR.

Trading Hours

Same day value-dated orders are sent weekdays at 09:30-12:00, forward day value-dated orders are sent weekdays at 09:30-17:30.

Value Dates

Order with same day or T+1 start date can be transmitted to the market. The maximum number of days between the start value and end value dates can be 365 days. If the start and/or end value date of the order or the relevant currency falls on a holiday, the start and/or end value date of the trade is the next business day.

Settlement and Default

Takasbank shall determine the principles and procedures regarding the fulfillment of clearing obligations of trades executed in the market and the defaults arising from the failure to fulfill the clearing obligations partially or completely within the scope of time and procedures laid out in the legislation.

Exchange Fee

The exchange fee in the Swap Market is calculated as “TL amount on the start date of the swap trade x 0.005 per ten thousand (0.0000005) x Number of calender days between the start and end value dates of the swap trade”.