¥Commodities Exchanges: Background events
–Systematic reduction of 3 long-term
Soviet institutions:
¥Gosplan (State Planning Committee)
¥Goskomtsen (State Price Committee)
¥Gossnab ( State Committee for Material
Supply)
–May 1990 first Commodity Exchange -
Moscow Commodities Exchange
–By Oct. 1991 more than 400 commodity
exchanges operating
–By Oct. 1992 ~1,000 commodity
exchanges
–Wholesale auction houses / markets even Òflea marketÕ like
–Function of Commodity exchanges
¥1) connecting commodity buyers and
sellers
¥2) price discovery
–Sources of commodity exchange revenue
streams
¥1) capitalize exchanges by selling
shares for hard currency
¥2) sell brokerage seats or rights to
transect business deals
¥3) sales commissions from 0.5 to 5.0% on
transactions, brokers get ~40% of commissions