Moscow Interbank Currency Exchange (MICEX) implements projects for creating and developing commodity exchange markets in close collaboration with National Mercantile Exchange (NAMEX). NAMEX is mainly engaged in organization of exchange trading on cash commodities market and on the market of mercantile instruments and derivatives (futures and options) in Russia via maximum coverage of regional market players. For this purpose NAMEX uses organizational, IT and technical resources of MICEX as well as such resources of regional exchanges, technological partners and commodity traders. NAMEX has concluded collaboration agreements for development of mercantile trading markets with MICEX, Rostov Currency and Stock Exchange (RCSE), Nizhegorodskaya Currency and Stock Exchange (NCSEX), Samara Currency Interbank Exchange (SCIEX), Urals Regional Currency Exchange (URCEX), Siberian Interbank Currency Exchange (SICEX), Saint-Petersburg Currency Exchange (SPCEX), Asian-Pacific Interbank Currency Exchange. These agreements set frames for joint realization of various projects on the commodities exchange market.

Another important trend of NAMEX business is participation in government activities for development and regulation of internal mercantile market.

From November 2002 till January 2003 NAMEX took part in government procurement interventions on grain market, which have been conducted via a digital network with remote access points within a single trading and information system cum infrastructure, provided by MICEX and regional currency exchanges mentioned above.

Thus, government procurement interventions were conducted simultaneously in seven regions of the Russian Federation. Agricultural producers received an opportunity to participate in intervention trading sessions via Trading Places, located in Moscow, St.Petersburg, Nizhniy Novgorod, Samara, Rostov-on-Don, Yekaterinburg and Novosibirsk.

343 grain producers from various regions of Russia took part in grain trading sessions with government interventions. Total turnover of government grain procurement intervention via trading exchange in November 2002 — January 2003 reached 2,834100 tons of grain for the sum of 4,941,803,600 RUR.

NAMEX has actively participated in all events and activities, directed towards development of exchange trading market, such as grain conferences, held in Nizhniy Novgorod (February, 2003), Moscow («Russia as Grain Power» and «Grain — 2003») at National Exhibition Center, as well as in the work of Russian Grain Council Ad Hoc Group, engaged in implementing grain warehouse receipts and developing grain market for exchange trading.

In 2004 NAMEX has won the tender (together with Central Russian Universal Exchange (CRUE)) for performing government interventions on grain market during the same year.

NAMEX functioned as Administrator of trading sessions, as well as a Clearing and Settlement Center. NAMEX organized six Trading Places in St.Petersburg, Rostov-on Don, Nizhniy Novgorod, Samara, Yekaterinburg, and Novosibirsk. During trading sessions traders made their bids in a digital trading network, covering all main grain-producing and grain-processing regions of Russia. Access of regional traders to trading sessions has been provided by SPCEX, RCSE, NCSEX, SCIEX, URCEX and SICEX.

While organizing and conducting trading sessions for government procurement interventions on grain market in 2004 NAMEX has been using services of Moscow Interbank Currency Exchange as a main Technical Center. Total quantity of grain, sold during interventions, has been 1,552,881 tons for the sum of 5,959,505,880 RUR. Number of accredited traders has been 307.

Key areas of NAMEX activities on the futures market are the following:

• Organization of market infrastructure for futures and derivatives on traded commodities;
• Selection of features for traded commodity futures;
• Development and organization of delivery procedure for executing futures contracts for traded commodities.

At present MICEX and NAMEX jointly develop a project for launching a futures grain contract (traded instrument) with basic asset delivery.

While organizing trading sessions, NAMEX uses IT infrastructure of MICEX and of six regional exchanges, which act as functional, technical and operating centers of NAMEX at mercantile trading markets.

Functions in the exchange trading network are distributed in the following way:

• NAMEX acts as Organizer of Trading, Clearing and Settlement of Accounts/ Administrator of Exchange Trading Network/ Trading Place in Moscow;
• MICEX acts as Technical Center with its integrated computerized system used for supporting trading sessions and for providing access to traders into Exchange Trading Network at Trading Places;
• Regional Trading Places, listed below, act during trading sessions as representatives of NAMEX. Their integrated computerized systems are used for providing access to traders into Exchange Trading Network at Trading Places and remote access points:
  • Saint-Petersburg Currency Exchange (SPCEX)
  • Rostov Currency and Stock Exchange (RCSE)
  • Nizhegorodskaya Currency and Stock Exchange (NCSEX)
  • Samara Currency Interbank Exchange (SCIEX)
  • Urals Regional Currency Exchange (URCEX), Yekaterinburg
  • Siberian Interbank Currency Exchange (SICEX), Novosibirsk.

Elements of this trading system have been successfully used for trading operations, related to government intervention on grain market in 2002-2004.

Exchange Trading Network is based on MICEX state-of-the art, robust and well- protected integrated computerized system, equipped by advanced high-performance hardware. It supports the functioning of several closely interacting national markets, dealing with various financial instruments, providing a full servicing cycle for traders, including transactional, depository and clearing services.

Unified Exchange Trading Network:

1. is based on state-of-the-art, highly reliable and well-protected integrated computerized systems;
2. is a single system, functioning on the platform of an ultimate distributed telecommunication infrastructure;
3. supports digital on-line trading sessions;
4. supports parallel trading session in several instruments on various markets and by different rules;
5. can utilize different trading routines;
6. supports trading transactions, conducted from workstations at trading floors and from remote workstations, installed in traders' offices;
7. establishes connections (also via Internet as an access channel) with various external digital data processing systems, owned by traders (digital brokerage systems, data distribution networks, risk management systems);
8. provides protection of communication channels and exchanged data;
9. renders services in clearing/settlement of accounts, depository services and digital documentation circulation;
10. is maintained by highly qualified and experienced personnel.

Remote access points can be also used for organization of nation-wide trading commodities market.

Diagram of Trading Places and remote access point's location is shown in Fig.1.

Remote access points are linked together by a single exchange trading network and are connected by dedicated communication channels to servers, located at the Technical Center of Nizhegorodskaya Currency and Stock Exchange and Siberian Interbank Currency Exchange.

Traders can be also granted access to trading session from remote workstation via Internet with information from a trading session displayed on-line, enabling users to bid and conclude deals in real-time mode.