Opening accounts and Placing orders

To be able to trade in the Republican Stock Exchange of Uzbekistan (RSE), every investor has to first open an investment account at a brokerage firm that is the member of the RSE. One day later, investors can instruct that member, which acts as intermediary, to place orders to the RSE. The investors can make orders only if they have at least 100% of the amount of cash (for bid order) or 100% of the quantity of securities (for ask order). These cash and securities will be frozen by the member, once the orders are submitted, for the settlement purpose or until the orders become invalid.

Trade Executions and Notifications

RSE Trading System matches the submitted orders according to the predetermined auction principles, and then notifies the trade results to relevant members, which will in turn confirm the trade information with their respective customers (investors).

Settlement

Once the trade information is confirmed by relevant members, on behalf of the customers, members shall pay for the purchased securities or deliver the sold securities to their counter parties (recipient members) with the cash or securities so far frozen.

1. Written request;
2. Telephone call;
3. Email;
4. Other means of communication.
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Trading Hours

Market opens to receive buy/sell orders from 09:30 and closes at 16:00 but the trading starts from 10:00 to 15:30 and at 16:00 once again before closing market.

Trading Days

Trading days shall be from Monday to Friday except public holidays.

Types of Order

There are two order types at the RSE, which are limit order and market order.
Limit Order – bid price as maximum offer price, ask price as minimum offer price.

Example: A bid limit order of 40,000 UZS may be traded at 40,000 UZS or lower, and an ask limit order of 40,000 UZS may be traded at 40,000 UZS or higher.

Market Order - instructs the broker to buy (or sell) at the best price that is currently available, this type of order will be executed immediately. However, market orders do not guarantee price

Reference Price

Basically, reference price should be the previous day’s closing price.
In case there is a corporate action such as capital increase/decrease, stock dividend, ex-right, split off, etc., the base price will be automatically adjusted by the RSE’s system using certain formula.
The prices calculated, when they are less than the price unit (tick size), should be rounded up to the price unit.

Trading Unit and Tick Size

The order unit of equity securities on RSE shall be one (1) share.
The minimum trading unit of equity securities on RSE shall be one (1) share.
The price movements are based on price unit (tick size) in respect of price range below: (all amounts are in UZS)

Daily Price Change Limit

Daily price change limit shall be ±20% of the Reference Price.

Validity of Orders

An order shall be valid from the time it is received in the RSE trading system to the time it is executed during the trading session of the day.

Correction and Cancellation of Submitted Orders

The correction or cancellation of an order shall be made only if the concerned order has not been executed. The time stamp of receiving order in the RSE’s trading system shall change to the correction time when there is price correction or quantity increase.

Principle of Auction

• All trades shall be executed through a single price auction.
• Priority of Bid/Ask Orders:
  1. Price
     • The lower Ask have priority over higher Ask; and
     • The higher bids have priority over lower bids.
  2. Time
     • In case of the same price orders, the orders received earlier have priority over the orders received later.
• Example

Method and Mechanism of Trade Execution

• All trades shall be executed through a single-price auction or multiple-price auction.
• Example: Single-price auction

Ex-entitlement Date

• The date of ex-dividends or ex-rights shall be one (1) trading day prior to the record date on which a list of shareholders to receive dividents or rights is determined.

Business Development Department

The RSE enables efficient market data to be distributed in a fair, transparent, orderly and rule-based environment. Investors and market participants can benefit from true and comprehensible market information, made available to all parties simultaneously. In this regards, the RSE makes public the following market data:

• Open price and close price;
• Trading volume and value;
• Indicative matching price and volume of single price auction;
• Reference price;
• Indices;
• Other useful information.

What is Clearing

Clearing is a series of processes that a Central Counter-party (CCP) performs to guarantee the settlement by netting the credits and liabilities between the sellers and the buyers.

Central Counter- party (CCP)

means an organization who assumes the accountability of buyers to all sellers and the accountability of seller to all buyers. In this way, buyers and sellers do not have financial obligations to each other but instead to the CCP.
In this case, RSE performs as the CCP in the Uzbekistan Securities Market.

Netting:

is the process of reducing multiple credit/debit obligations among multiple traders to several credit/debit obligations. Through netting, RSE calculates the final settlement size. After netting, original credit or debit obligation are replaced with a single credit or debit obligation.
The final settlement size is obtained by the following method:

• In case of securities : obtained by netting the total sold quantity and total purchased quantity per issue for the concerned member.
• In case of cash : obtained by clearing the total purchased value and the total sold value of the concerned member.

What is settlement?

Settlement is the completion of a transaction, wherein the seller transfers securities or financial instruments to the buyer and buyer transfers money to the seller.