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IRENEX

Iran Energy Exchange

The Iran Energy Exchange was established in accordance with the Act in July 2012. The geo-economic situation of Islamic Republic of Iran and its rank as one of the world’s largest oil and gas producers, plus its outstanding infrastructure in electrical power and other energy resources has made the existence and expansion of an energy exchange inevitable in Iran.  

As the Statute of the IRENEX – as a self-regulatory commodity exchange- stipulates that all energy carriers and energy based derivatives shall be listed and traded on one of the IRENEX markets. The company’s mission is to develop a market in which trades are done under transparency, efficiency and liquidity.

Some significant and most important benefits of listing and trading on Iran Energy Exchange are as follows:

- Tax exemption: According to ‘The Development of New Financial Instruments Law”, 10 percent of the tax on income resulting from the sales of commodities listed and sold on commodity exchanges is relieved from tax.

- Immunity from the formalities of tenders and auctions: According to “The Development of New Financial Instruments Law” and clauses of yearly budget laws, selling and purchasing of commodities listed on commodity exchanges which trade based on the rules and regulations of these exchanges, do not need to hold auctions, tenders and other formalities of sort, through ministries, government, public and executive organizations.

- Privilege of marketing and supply in the domestic and international rings through the network of brokerage members and trading platforms of IRENEX.
- Possibility of providing required commodities by the means of a transparent and fair mechanism in IRENEX.
- Financing and managing the risk of suppliers and buyers by financial instruments in IRENEX.
- Risk hedging and procurement for diverse time periods.Reducing trade costs for customers compared to deals made regardless of the exchange (including costs of closing a contract, marketing and etc.).
- Reducing risks associated with trades such as failure to fulfill obligations by the counterparties and etc.
- Presence of standardized and defined contracts also guaranteeing the standard and quality of commodities traded on the exchange.
- Possessing a comprehensive regulatory framework for listing, trade, registration, deposit and clearing and settlement of commodities and commodity based securities.
 
 
Market Structure
 
 IRENEX consists of four markets which are the physical, derivatives, other marketable securities and subsidiary markets. In the physical market, listed commodities, and in the derivatives market, commodity based securities are traded on the exchange.

Single-shipment and off-grade commodities can be traded on the subsidiary market. The physical market itself has three panels of power, oil & gas and other energy carriers. The derivatives market has three panels in which specific contracts are traded. These contracts include: Parallel Salam Contracts, Futures Contracts and Options Contracts. Also each panel has two rings, domestic and international. On the physical market, trades are conducted in the form of spot, credit, Salam or premium discovery contracts.

 
 

Physical

Derivatives

Boards

Electricity

Oil

Gas

Other energy carriers

Electricity

Oil

Gas

Other energy carriers

Contracts

Spot

Credit

Salam

Standard Parallel Salam

Futures

Options

Trading Floor

Domestic

International

Domestic

 
 

Based on this, all energy carriers, provided that the supplier has a reliable reputation in the listed commodity’s market, have the possibility of fair price discovery considering the volume of supply and if the commodity has no limitations regarding the legal pricing and monopoly of supply or demand. Furthermore, commitments stated in the Listing of Commodity & Commodity-based Securities Instruction must be presented by the applicant, all of which must be approved by the Listings Council or Supply Committee of IRENEX as a “main” or “similar” commodity.

On the physical market of IRENEX, based on the number of suppliers on a certain symbol, the trades are done in one of the following methods: Auction, All-Electronic and Wholesale Supply.

Trades on the derivatives market are also done by the all-electronic method.

 

Resources of IRENEX


 - 70 brokerage companies with the license to trade on IRENEX.
 - Over 20 oil & gas refineries as suppliers
- More than 10 chemical plants and several coke making and tar refining companies.
- More than 40 private and public power plants.
- 39 electricity distribution companies as buyers (all distribution companies).
- Over 20 electricity retailers licensed by the Energy Ministry.
Listing and trade of more than 250 commodity-suppliers and contracts.
- All-electronic trading platform specially designed for physical and derivatives markets
All-electronic platform for registration, deposit and settlement of trades.
 

Listing procedures in IRENEX

 The listing of products and other financial instruments takes place under the supervision of Iran Energy Exchange Listing Council and according to the Listing of Commodity & Commodity-backed Securities Instruction.

Based on Listing of Commodity & Commodity-backed Securities Instruction application for admission and listing together with the documents subject of the present “instruction” must be submitted to the exchange by the admission advisor and be registered with the exchange.

 

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