Intermediation agreements of derivative instruments trading

Derivative instruments which are valued according to their subjected assets are classified in four groups; forward contracts, options, future contracts and swaps. Derivatives that are capital market instruments other than securities are treated in organized or over the counter markets as regards to their properties. Intermediation in derivative instruments trading is taking place at organized markets as transactions in these markets are made only by intermediaries. Intermediation in derivative instruments trading is done by concluding a framework agreement between costumers and intermediaries, costumers giving orders by an agreement, following orders in markets, making a down payment and ending these agreements by offsetting position, physical delivery or cash settlement. Intermediation agreements of derivative instruments trading are classified as framework agreements and individual agreements. Framework agreements that are obliged to conclude under Regulations, consider the derivatives trading and the rights and obligations occurred from this activity and are conducting between the intermediary and consumer. Individual agreements are new agreements which legal properties differ according to the intermediation type are concluded after the framework agreements between the intermediary and consumer by following the orders of consumers. The obligations of intermediary and consumers can be counted as concluding an agreement in scope of consumer order, acting in manner of loyalty and care duty, informing the consumer, rendering the assets, making an explanations about the risks of the operation and paying in advance, making payment and a down payment, saving intermediary from obligation and compensating the loss of intermediary. In scope of intermediation agreements of derivative instruments trading, some precautions are foreseen in order to protect the consumers. Key Words: 1. Derivative instruments, 2. Framework agreement, 3. Individual agreement, 4. Intermediation agreements of derivative instruments, 5. Intermediation of derivative instruments trading