Colleterals

In GFM, they are divided into four categories: initial collateral, default collateral, account collateral, financial period collateral and physical period collateral.

initial colleteral

This collateral is in cash or in form of letter collateral in the amount of 150.000 TRY received from the participants signing the GFM Participation Agreement.

default colleteral

This collateral is a collateral in the form of a contribution received for the portion of the losses that may occur in case of default of the participants exceeding the collateral and allows for additional positions in case the position limit is reached. At least 50% of the collateral should be in cash.

financial period colleteral

It is a collateral received by participants for their existing positions and new orders. It consists of four parts: contract collateral, net loss update, market update and full spread position discount.

physical period colleteral

This is a collateral taken from performance of physical deliveries and completion of invoice payments, i.e. three days before the start of delivery period to three days after expiration of the delivery period.

Colleteral Notices, Payment and Controls

• EXIST calculates the collateral required to be submitted by 05.00 pm on each business day and informs the central settlement organization.
• The collateral in the accounts of the participants is blocked up to the Total GFM Margin amount notified by EXIST. The amount in excess of the blocked amount is free collateral.
• In case of amount in the participant accounts is below the required Total GFM Margin amount, the central settlement organization makes a “margin call” to the relevant participants following the end-of-day transactions.
• For the collateral controls to be performed 30 minutes before the start of each session, participants submit their letters of collateral to EXIST until 11.30 am and collateral forms except of letter to the central settlement organization until 15 minutes before the control.
• EXIST notifies the central settlement organization about the amount of the letter of collateral submitted by 11.30 am on each business day on participant basis until 12.00 pm at the latest.
• The central settlement organization notifies the updated information on the amount of collateral by the participants to EXIST on market participant basis between 12.00 – 17.00 pm on each business day.
• In the controls made as a result of the collateral notifications, the participants who do not comply with the margin call are deemed to be in default and default management provisions are applied.