History

Warsaw Commodity Exchange was founded in 1995 as a joint stock company on the basis of the Polish Commercial Code. 56% of the initial share capital has been subscribed by the Foundation for the Establishment of Grain and Feedstuff Exchange - a government sponsored organization, and the remainder by several banks, large commercial enterprises as well as individual investors.
The exchange organizes spot market for agricultural commodities and fuels as well as derivatives market for both commodities and non-equity financial instruments. First transactions on the spot market took place in December 1995. The spot market is divided into exchange auction based market and the so called intermediation market which is in fact organized OTC market supervised and registered by the Exchange.
June 1997 witnessed first options contracts being traded on the Warsaw Commodity Exchange, while first futures contracts were introduced in January 1999.
In September 2000 The Foundation sold all its shares to the group of private investors thus effectively privatizing the Warsaw Commodity Exchange.

Derivatives contracts

Two types of derivatives are currently available on the Warsaw Commodity Exchange. Those are spot options and futures contracts. Options are traded on the agricultural commodities market only. They are issued in series from time to time, depending on the availability of issuers. Futures contracts are traded on continuous basis in series according to their contract specifications which are provided below. For the year 2001 WCE is considering implementation of additional derivative instruments including options on the most active futures contracts.

Contracts specifications

Futures contracts specifications

Membership Requirements

Clearing

Warehouse and Warehouse receipts

The exchange uses warehouses as delivery points for spot transactions as well as spot options and wheat futures contracts. Majority of warehouses in Poland are privately owned enterprises. In October 2000 Polish Parliament approved new Law on Public Licensed Warehouses. According to the new law those Warehouses which receive license from a Government Agency will attain a status of a Public Warehouse and will be able to issue warehouse receipts against goods stored in the warehouse. Warehouse receipt is a two part security representing right of ownership of goods stored in the Public Warehouses. One part of the warehouse would be used as a credit collateral instrument. The new law comes into force in 2001.

Regulator

On October 26th, 2000 Polish Parliament approved new "Law on Commodity Exchanges" which regulates the activity of commodity exchanges, clearinghouses, brokerage houses as well as sets up regulatory and supervisory framework. According to this law commodity exchanges will be regulated by the Polish Securities and Exchanges Commission (KPWiG). It will also license and regulate clearinghouses and commodity brokerage houses. Brokerage house currently licensed to operate on the securities market will be allowed to extend their licenses to cover commodity exchanges as well. The law comes into force in the second quarter of 2001 and provides for an 18 month transition period during which all exchanges and brokerage houses currently active in Poland have to receive necessary licenses. WCE intends to apply for such a license as soon as the new law comes into force.