Securities tradingin line with theRules of the stock exchange, at stock exchange meetings, may be organised by the following trading methods:
1. Quote-driven price method
2. Continuous trading method, and
3. Minimum price method–only in trading of shares at the unregulated market.
Quote-driven price method
Trading using the single auction price method comprises the following phases::
1) pre-opening – time period intended for Member’s order placement and receipt
2)auction - time moment when the single price is determined,
3) trading– time moment when transactions are concludedat the single priceand/or
4) at-the-close trading – time period intended for receipt of orders at the determined single price and conclusion of transactions.
The pre-opening phase comprises the following sub-phases:
a) order entry – period of entering trading orders, followed by
b) random period - period of limited receipt of trading orders and displaying of information.
The duration of the random period sub-phase
Random period is determined in the BelexFIX by the uncontrolled procedure based on the table of random numbers, which determines the duration of the period of admission of trading orders in the time interval between 1 to 300 seconds.
During the single price determination the following criteria are applied:
1. maximization of the trading volume,,
2. minimization of the difference between the possible price and the reference
The single price is determined as the price of the greatest volume measured by the amount of the given security.
If the greatest trading volume can be achieved at more than one price, the price closer to the reference price is determined as the single price, except in the first trading when the higher price is determined as the single price.
If it is possible to determine two prices at which the equally greatest trading volume can be achieved and which are equally distanced from the reference price, the higher price is determined as the single price.
If only market orders have been placed on both bid and ask side, the single
price which is equal to the reference price is determined.
The single price is the initial price for the next trading session.
If the single price cannot be determined by the criteria relevant for the single pricedetermination, the reference price for the next trading session shall remain unchanged.
Trading using the continuous trading method comprises the following phases:
1. pre-opening – time period intended for Member’s order placement and receipt,
2. opening – time moment when the opening price is determined,
3. at-the-open trading – time moment when transactions are concluded at the determined at the-open price,
4. continuous trading – period of continuous placing and matching of tradingorders,
5. closing – moment when the at-the-close price is determined, and
6. at-the-close trading – period intended for Member’s order receipt at the at-the-close price and the conclusion of transactions at the at-the-close price.
Trading orders waiting for execution are executed according to the price priority of the order, and if the prices in two or more orders are equal, the priority is given to the order placed earlier.
The execution of a particular trading order is possible if an order of the opposite type transaction exists in the BelexFIX with the price equal or better than the active status order waiting for execution.
Closing phase represents time moment when the at-the-close price is determined.
The at-the-close price is determined alternatively as:
1. the price of the last transaction in the continuous trading phase, or
2. the average weighted price of a specified number of the last-traded units of each security, or
3. the average weighted price of the last-traded specified percentage of the total traded units of each security, or
4. the average weighted price of the last-traded units of each security in the specified time interval.
If no transaction has been concluded during the trading in the continuous trading method, neither at-the-open price nor at-the-close price is published, andthe reference price remains unchanged for the next trading session.
Minimum Price Method
Trading in securities at the unregulated market may be organized by the minimum price method outside the BelexFIX, exclusively for shares placed by the Share Fund, upon its request and under conditions prescribed by the Rulesof Operations of the Belgrade Stock Exchange.
Share trading by the minimum price method can be organized only for the first trading of the given shares at the Exchange.
The minimum price shall be determined freely by the decision of the Share Fund.
The price of a transaction concluded by the minimum price method is called the auction price.
The auction price shall be the reference (initial) price for the next trading session for trading in that share.
The reported offer of shares, which has a unified price, shall amount to at least 10%, and at most 15% of shares of the total number of the issuer’s shares.
By way of exception, at the justified request of the Share Fund, Director of the Exchange can approve trading by the minimum price method even when the reported offer of shares accounts for less than 10%, i.e. more than 15%.
Trading in shares by the minimum price method must not be scheduled in the period shorter than 20 days since the date of filing the request.
When the auction using the minimum price method has been scheduled, only the Share Fund shall participate on the supply side, or the Exchange member who is representing him, while on the demand side shall participate only the Members who:
• previously fulfilled all the conditions prescribed by the Share Fund, and
• who have the buy orders that fulfill the conditions of minimum price andoffered quantity.
The block trading represents the block transaction with a security traded at the regulated or unregulated market.
A block transaction is the transaction concluded outside the trading session at which trading is performed by the single price or the continuous trading method, in the bilateral relation of one buyer and one seller.
A block transaction can be concluded only during the exchange session, if trading in a security or financial instrument which is the subject of the block transaction is not temporarily suspended, or if the security or financial instrument is not the subject of the special report.
If the subject of a block transaction is the security traded using the single
price auction method, the block transaction may be concluded if the following
Conditions are cumulatively fulfilled:
1) at least one Member places simultaneously buy and sell order for the same security in the same quantity, at the same price and with the same settlement date,
2) the quantity of securities of the block transaction is equal at least to the sum of the traded quantity (volumes) of the given security at the last three trading sessions, accounting for at least 3% (three percents) of the total number of issued securities, excluding the traded quantity at the trading session on the day of concluding the block transaction,
3) the highest allowed price deviation of the security which is the subject of the block transaction in relation to the average weighted price determined at the last three trading sessions (excluding the trading session on the day of concluding the block transaction) is up to 10%, except when the quantity of securities in the block transaction accounts for at least 20% of the total number of issued securities of the same type and class, when the allowed price deviation may be up to 20%.
If the subject of a block transaction is a security traded using the continuous trading method, the block transaction may be concluded if the followingconditions are cumulatively fulfilled:
1) at least one Member places simultaneously buy and sell order for the same security, in the same quantity, at the same price and with the same settlement date;
2) the value of the block transaction with a security traded by the continuous trading method is alternatively at least:
a. 200 million RSDs, if the subject of the block transaction are shares, or
b. 10 million RSDs, if the subject of the block transaction is a debt security,
c. 10% of the total issue of securities of the same type and class, issued by the given issuer;
3) the highest allowed price deviation of a security in the block transaction in
relation to the last at-the-close price at the trading session is up to 3%, except when the quantity of securities in the block transaction is minimum 10% of the total number of securities of the same type and class issued by the given issuer, when the allowed price difference is up to 5%;
4) the quantity of securities in the block transaction cannot be bought or sold at the price from the block transaction at the trading session during which the subject of the block transaction is submitted to the Exchange for approval and registration.The Board of Directors of the Exchange may decide on the changes of conditions for the conclusion of block transactions.
The prices and trade volume of approved block transactions shall not influence the prices and trade volume achieved in trading in securities during the regular trading session, or the value of the index comprising the given securities.