• Limits on the cash market

Limits with the aim of protecting investors, are meant to prevent unreasonable price movements on the market. In order to ensure this, the Exchange usually applies two limits. These are: the order limit and the trading halt limit .

Order limit: this is a limit for price movements, set as a percentage, preventing the entering of orders into the Order Book at a price higher or lower, in comparison with the security’s closing price for the previous day.

The Exchange applies a 15% order limit for all equities listed in the category “A” and/or included in the basket of the BUX index, and also for all debt-type securities.

A 20% order limit is applicable to all other equity products.

Trading halt limit: if the change in the transaction price exceeds 10% in comparison with the previous day’s closing price, this means that the trading halt limit was reached and this automatically implies the temporary stop of trading that security for at least two (2), but not more than fifteen (15) minutes. In respect of securities traded on the equity market, the Exchange applies a halt only once within one trading day for each product.

On the certificates market the issuer can request the application of order limits by product. In the case of those certificates where order limits are applied, BSE can, for the request of the certificate’s issuer, amend these limits during trading hours by inserting a five-minute trading halt. Technically the actual base price is moved to the upper or lower order limit depending on the direction of the underlying product’s price movement. The possibility to amend the base price ensures the contingency of the market making in volatile market conditions on the underlying market.

• Limits in the derivatives and commodities sections

On the futures market, two limits are applied, one of them for the maximum price movements during the day and one for the clearing spread. Limits applicable to futures contracts are included in the Product List.

The limit for the daily maximum price movement, similar to the cash market order limit, does not allow the entering of orders into the Order Book at prices higher or lower. If the price of a buy order exceeds the sum of the previous day’s settlement price and of the maximum daily price movement, or the price of a sell order is lower than the difference between the previous day’s settlement price and the maximum daily price movement, then the order shall be automatically rejected by the system.

If a transaction is made on the futures market at a price higher than the sum of the previous day’s settlement price and of the clearing spread, or lower than their difference, then trading shall be halted in respect of the given product for at least two (2), but not more than five (5) minutes. As data transfer between KELER (the Central Depository and Clearing House) and the Exchange during trading is effectuated on a real-time basis, and KELER continuously monitors the positions of the brokerage firms, during the trading halt there is no need to perform an intraday clearing procedure. On the options market, the Exchange applies no clearing spread.