Generalized information on registered over-the-counter contracts with exchange-traded goods

Image: Pexels

The stock exchange is far from the only place where investors can make transactions with shares and other assets. In the event that two counterparties want to agree directly on special terms, they can use the so-called over-the-counter (OTC) market.

Today we will talk about how this market works, how the process of making transactions on it differs, and why a stock broker is needed here.

Note

:
The over-the-counter market is a tool for experienced investors who for some reason are not satisfied with the terms of transactions that they can get on the exchange. To make transactions on the over-the-counter market, you will need to open an online brokerage account.

Section 1. Terms and definitions

This User Agreement (hereinafter referred to as the Agreement) uses the following terms and definitions:

Section 2. General provisions

2.1. The Agreement defines the terms of use of the Information, the rights and obligations of the User arising when gaining access to the Information and Information services through the Site.

The composition of the Information available on the Website is determined by the Company at its sole discretion, taking into account the requirements of laws, regulations of the Bank of Russia and other regulations of the Russian Federation.

The procedure and conditions for obtaining free access to Information through the Site are determined by the Agreement. The procedure and conditions for access to Information services and use of Information are determined by the Agreement, as well as agreements concluded between the Company and Users.

2.2. The agreement is a public offer in accordance with Art. 437 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation). The Agreement is published on the Site and comes into force from the moment of publication.

The user who has started using the Site is considered to have confirmed his agreement with the terms of the Agreement in the manner prescribed by clause 3 of Art. 434 Civil Code of the Russian Federation.

2.3 In accordance with the legislation of the Russian Federation and concluded agreements, the Company is the copyright holder of the Information, including, but not limited to, Exchange information, Indices and other Derivative information posted on the Site.

Speculative stock trade

Speculative refers to all types of transactions made with the expectation of increasing or decreasing the value of an asset in order to obtain subsequent benefits. This transaction is the opposite of hedging. There are also special names for speculative transactions that came from the French language: deport (for a decrease in value in the future) and report (for transactions that imply benefit from a significant increase in value and profit from the resulting difference). A speculative exchange transaction does not provide for the purpose of reducing risks.

Section 3. Procedure and conditions for access to Information.

3.1 In accordance with clause 1, part 3, art. 6 of the Federal Law of July 27, 2006 No. 149-FZ “On Information, Information Technologies and Information Protection” The Company determines the procedure and conditions for the User’s access to the Information posted on the Site.

3.2 The Company provides free of charge access to Exchange information, Indices and other Derivative information to be posted on the Site in accordance with the requirements of laws, regulations of the Bank of Russia, and other regulations of the Russian Federation. Exchange information, Indices and other Derivative information may be used under the conditions established by section 4 of this Agreement.

3.3 All Indices are calculated by the Company using methods published on the Site. The values ​​of additional parameters used in calculating the Indices (coefficients, tariffs) are disclosed on the Site in the public domain.

3.4 Exchange information, as well as any Materials posted on the Site, are not advertising and cannot be regarded as recommendations or offers aimed at encouraging the User to enter into contracts with any exchange commodities (instruments) admitted to organized trading held in commodity sections and the derivatives market section of the Company.

3.5 Information posted on the Site may contain links to third party sites. When following hyperlinks posted on the Site to information resources external to the Site, the User leaves the Site. The Company is not responsible for the unreliability of information posted on information resources external to the Site, as well as for untimely updating and update of the relevant information in their composition.

3.6 The Company does not act as a representative of third parties specified in clause 3.5 of this section of the Agreement. The placement of these links is for informational purposes only and should not be construed as advice, advertising of products, recommendations, or offers sold by any third parties.

3.7 The provision of Information services to the User is carried out on the basis of an agreement for the provision of Information services concluded between the User and the Company. The procedure and conditions for providing access to Information provided in accordance with the agreement for the provision of Information services are determined by the specified agreement.

Section 4. Terms of Use of Information

4.1 The User has the right to use the Information posted on the Site under the conditions and subject to the restrictions provided for in this Agreement.

4.2 Information may be used by the User subject to the following conditions and restrictions:

4.2.1 Any actions with the Information are permitted, with the exception of Distribution, performed by the User for personal/official purposes not related to making a profit.

4.2.2 Distribution of Exchange information by the User is permitted only subject to the conclusion of an agreement provided for in clause 3.7 of this Agreement.

4.2.3 Distribution by the User of Derivative information, including Indexes, is permitted subject to prior written permission from the Company and a link to the source of such information, in particular to the Site.

4.2.4 Distribution of Materials by the User is permitted provided that a link to the source of such information is indicated, in particular to the Site.

4.2.5 When Distributing Information, processing of its original text is not allowed. Reducing or changing the arrangement of the components of the Information, providing illustrations, comments or any explanations, is permitted only to the extent that this does not lead to distortion of the Information.

4.2.6 The User has no right to take any actions aimed at technologically extracting or copying information from the Site, bypassing the access means directly provided to the User on the Site.

4.2.7 It is prohibited for the User to use the Information for the purpose of making a profit, except for the case when the Information is received on the basis of an agreement provided for in clause 3.7 of this Agreement.

4.3 The terms of use of the Information provided in accordance with the agreement for the provision of Information services are determined by such agreement.

Exchange transactions: concept

A transaction means not only the purchase or sale of an asset (commodity, currency, shares and bonds, other securities), but also many other agreements. For example, the subject of the transaction can be an option or a future. A huge number of accompanying conditions - deadlines for fulfilling obligations, type of order (limit, market, stop or stop-limit), type of transaction (simple or with margin), the presence of a premium (forward, option) and others complicate the process. However, the elaboration of all types of transactions allows you to rely on the terms of the contract, and the technical side and requirements for the execution of transactions are determined and worked out by the exchange itself.

Section 5. Intellectual Property Rights

5.1 All Information is the object of intellectual property of the Company. Exclusive rights to the Information provided by the Company in connection with the provision of Information services are retained by the Company.

5.2 Materials, their selection and relative arrangement are subject to protection in accordance with the provisions of laws, regulations of the Bank of Russia and other regulations of the Russian Federation. Use of the Materials is permitted only subject to compliance with the conditions provided for in Section 4 of this Agreement.

5.3 Exclusive rights to use trademarks, commercial designations and other objects of intellectual property posted on the Site belong to the Company or its partners.

5.4 The Company, as the copyright holder of intellectual property, has the right, at its discretion, to permit or prohibit third parties from using intellectual property. However, the absence of a prohibition is not considered consent or permission to use.

5.5 The terms of the Agreement cannot and should not be considered as grounds for transferring or granting the Site User any exclusive (license) rights to use the Materials.

Why do you need a broker?

To avoid such situations, investors need to carefully calculate possible risks or attract specialists who can do this.
This is precisely the role of the stock broker in conducting such transactions. Within the over-the-counter market, a company can be both a broker and a settlement center, helping to assess all risks. For example, ITI Capital provides support services for over-the-counter transactions in shares, Eurobonds, forward or option contracts, structured products, and repos. We carry out transactions of any complexity with a large number of financial instruments.

Section 7. Liability

7.1 Any unlawful use of the Information posted on the Site is a violation of the rights of the Company as the copyright holder and/or third parties and may entail liability under the legislation of the Russian Federation.

7.2 The Company does not guarantee the continuity of operation and round-the-clock availability of the Site, services and services provided by providing access to the Site.

7.3 The Company is not responsible for:

7.3.1 losses caused by failures and other disruptions in the functioning of the Site, including those related to disruptions in the operation of equipment, communication systems or networks that are operated and/or maintained by third parties;

7.3.2 losses incurred by the User as a result of the presence of malware in the equipment and software used by the User to access the Site;

7.3.3 violation by the User of the terms of this Agreement;

7.3.4 unlawful actions of third parties, including those related to the use of the User’s data, as well as the use of information about the User, if such information has become available to third parties through no fault of the Company;

7.3.5 indirect, incidental, unintentional losses of the User (including harm caused by loss of data or damage caused to honor, dignity or business reputation) arising in connection with the use of the Site, including when following an external link posted on the Site that provides the transition to a third party website;

7.3.6 indirect, incidental, unintentional losses of the User (including harm caused by loss of data or damage caused to honor, dignity or business reputation), which are caused by the unreliability of the information specified or posted by the User during the registration process on the Site;

7.3.7 non-compliance with the requirements of the legislation of the Russian Federation of information and materials posted on the Site by the User, violation of proprietary, non-property and other rights of third parties related to the use of the Site by the User.

7.4 The responsibility of the Parties to the agreement for the provision of Information services is determined by the specified agreement concluded between the Company and the User. The amount of liability of the Parties is limited to the amount of actual damage caused to the other Party.

Organization of exchange transactions

The organization of exchange transactions is quite complex - not only from the theoretical and practical side, but also from the technical side. If at the beginning of the existence of exchanges a verbal statement was usually sufficient, which was formalized into an agreement by the end of trading, now most transactions are carried out electronically. This entails various consequences - for example, it is believed that the introduction of automation helps to accelerate any phenomenon - both growth and decline of markets (stock and others).

A tragicomic situation occurred in 1987 - on December 9, there was a large-scale failure at Nasdaq, after which the quote service of the National Association of Securities Dealers stopped working for almost an hour and a half. The reason for the non-participation in trading of over 20 million shares was... a squirrel that made its way into the main computer center of the exchange.

Section 8. Submitting Complaints

8.1 A user who believes that any information materials posted on the Site violate his rights and legitimate interests must send a corresponding complaint to the Company’s email address

8.2 The Company considers complaints that meet the specified requirements:

8.2.1 The complaint contains the applicant’s name, surname and patronymic/name, location and actual address, contact information.

8.2.2 The complaint contains a detailed description of the alleged violation of the User's rights.

8.2.3 The complaint contains contact information for sending a response: email address and telephone number.

8.2.4 The complaint contains consent to the processing of personal data (for the applicant - an individual).

Complaints that do not meet the specified requirements are not considered by the Company.

8.3 Complaints are considered by the Company no later than 30 calendar days from the date of receipt of the complaint to the Company’s email address specified in clause 8.1 of this section of the Agreement.

Cash (spot) transactions - types of exchange transactions

A spot transaction is a type of transaction in which payment for goods on the exchange is made in the shortest possible time. Cash (spot) transactions—types of exchange transactions with fast payment—are often said to transfer money “instantly.” But we are actually talking about the period for transferring funds by bank payment, which is one or two days.

This type of transaction is concluded in cases where one party is ready to pay immediately, and the other is ready to deliver the goods in a short time. Many types of cash transactions are carried out automatically or semi-automatically. This allows, for example, to play short when trading securities.

Section 9. Final Provisions

9.1 Any disputes related to the conclusion, amendment, execution or termination of this Agreement shall be resolved in accordance with the legislation of the Russian Federation.

9.2 The Company has the right to make changes to the terms of the Agreement by publishing a new version of the Agreement on the Website. The corresponding changes come into force from the moment the new version of the Agreement is published on the Website.

9.3 The User is obliged to periodically review the text of the Agreement in order to study the latest changes made to it. By continuing to use the Site after the relevant changes come into force, the User expresses his agreement with the terms of the Agreement in the new edition.