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  • Sec. 3 Sec. 3 Trading Procedures

    • Article (13)

      • Validity of Bids and Offers

        1- To be valid, bids and offers must be made:
        b) during the trading session;
        c) to all members generally and without discrimination; and
        d) in the manner prescribed by this Resolution.
        2- To be valid, an order must specify:
        a) the name or symbol of the listed security;
        b) whether the order is to buy or sell;
        c) the number of shares or stock to be traded;
        d) explicit instructions regarding the trading price;
        e) any conditions which must be met prior to the order becoming effective, if any;
        f) the Exchange Account Number of the underlying client on whose behalf the order is being effected, if applicable; and
        g) the financial intermediary code, if applicable.

    • Article (14)

      • Board Lots and Tick Sizes

        Orders must be entered within the defined board lots and tick sizes, as specified by the Exchange. All trades shall be executed within the trade ranges as set by the Exchange. The Exchange shall have the right to adjust the board lots and the tick sizes in light of market conditions. Any trades effected at prices which are outside the stipulated trade range will be cancelled.

        The Exchange adopts, in the meantime, the following board lots and tick sizes for orders in Bahraini Dinars and U.S. Dollars:

        1- Board Lots:
        a) Orders in Bahraini Dinars.

        Regular Market Odd Lots WON
        Market
          Market
        Board Lots
        Class Price (BD)   Board Lot Maximum Minimum
        No From
        BD50,000         		To Shares Shares
        1 0.001 0.050 10,000 9,999  
        2 0.051 0.100 5,000 4,999  
        3 0.101 0.250 2,000 1,999  
        4 0.251 0.500 1,000 999  
        5 0.501 Above 500 499  
        b) Orders in U. S. Dollars.

        Regular Market Odd Lots WON
        Market
          Market
        Board Lots
        Class Price (US $)   Board Lot Maximum Minimum
        No
        BD50,000                 		From To Shares Shares (Eqv.)
        1 0.01 2.00 1,000 999  
        2 2.01 4.00 400 399  
        3 4.01 10.00 200 199  
        4 10.01 Above 100 99  
        2- Tick Prices:
        i) Orders made in Bahraini Dinars.

        Class No Price Range (BD) Tick Size
          From To (Fils)
        1 0.001 0.200 1
        2 0.201 0.500 2
        3 0.501 1.000 5
        4 1.001 2.500 10
        5 2.501 Above 20
        b) Orders made in US Dollars.

        Class No Price Range (US $) Tick Size
          From To (¢)
        1 0.01 2.00 1
        2 2.01 4.00 2
        3 4.01 10.00 4
        4 10.01 Above 5

    • Article (15)

      • Price Fluctuation:

        The Exchange protects the prices by limiting the price variation (up and down) to a maximum of 10% of the previous closing price.

    • Article (16)

      • Source of Orders:

        The following orders shall be accepted for trading on the Exchange:

        1. Client Order
        2. Foreign Investor Order
        3. Market Control Order
        4. Mutual Fund Order
        5. Issuer Order
        6. Professional Order
        7. Insider Order

    • Article (17)

      • Definition of Orders

        The following are the permissible orders:

        1- Limit Order: An order that has a specified price when it is posted for execution.
        2- Market Order: An order that does not have a specified price when it is posted for execution. A Market order must be executed promptly at the best price obtainable, and will have priority over Limit Orders at the same price levels entered in the Pre-Opening period, and assumes an initial price limit value normally based on the most advantageous price on the market. A Market Order trades through a range of prices, starting with the best price on the market. The range of prices that a Market Order can go to may be limited by the Exchange.
        Market Orders require a current market price, and therefore are not accepted until the market is loaded.
        3- Day Order: The order is valid until the close of the trading day on which it was entered.

    • Article (18)

      • Time in Force Restrictions (TIF)

        Orders are allowed to have time restrictions, which limit the period the order is available to trade. The order will be automatically removed after close of trading for the stipulated day.

    • Article (19)

      • Orders Exceeding BD999,999/-

        Prior approval of the Director is required before execution, if the value of the order exceeds BD999,999/-

    • Article (20)

      • Disclosed and Undisclosed Volumes

        1- An order may specify the total share volume and may also specify a lesser amount than is disclosed to the market. However, the disclosed share volume should not exceed the undisclosed volume by 50% of the total share volume.
        2- Undisclosed volume amounts are private; they are only seen by the stockbroker entering the order and the Market Controller. Everyone else will only see an indication that an undisclosed volume is present. When fills have reduced an order to the point where there is no remaining undisclosed volume, the indicator will no longer appear.
        3- If an order can be filled on initial entry, it will be filled to the extent of the total volume of the order. A partial fill will result in the remaining order volume being posted with the full original disclosed volume, provided sufficient volume remains.
        4- The disclosed quantity acts as the roll-in quantity upon the original order entry. Roll-in quantity cannot be changed, except by changing the disclosed quantity. A change in the disclosed volume will not change the total or remaining volume.
        5- An increase in the disclosed volume will lead to a new time stamp and change in queue priority. A decrease in the disclosed volume will not lead to a new time stamp.
        6- Partial fill diminishes current volume without replenishment from undisclosed volume, unless there are no further orders behind at the current price level. Where no orders exist behind the traded order, the disclosed quantity will be automatically rounded-up to the full disclosed amount. When there are orders queued after the disclosed volume, the total disclosed volume must be traded before a new roll-in quantity is brought in. Once the total disclosed volume is traded, another amount equal to the disclosed volume will be rolled-in with a new effective time stamp.
        7- Only the disclosed volume and an indicator showing that there is an undisclosed amount is public.

    • Article (21)

      • Alteration of Orders (Change Former Order-CFO)

        A stockbroker may change the terms of an order already entered in BATS for the following reasons:

        1- If the security, symbol, market or the order type (buy or sell) needs to be changed, the order must be cancelled and re-entered.
        2- If any of the following changes are effected, a new effective time stamp will be given to the order:
        (a) change in price;
        (b) increase in disclosed volume;
        (c) a change in the underlying client.
        3- If any of the following changes are effected, the order will keep its original effective time stamp:
        (a) decrease in disclosed volume.
        (b) changes in undisclosed volume.

    • Article (22)

      • Cancellation of Orders

        An order can be cancelled as long as it has not been matched. During trading, stockbrokers can remove groups of orders or all of their orders from the trading system. Once a cancel order has been issued, the original order cannot be retrieved.

    • Article (23)

      • Priority of Orders for Execution (Queue Priority)

        Orders that cannot be immediately executed are queued for future execution in a specific order, based on a queue priority. The factors used to determine the queue priority in order of consideration are:

        1- The Price:
        The price of an order determines its primary priority for execution. An order can be specified with a limit price or a market price. For both buy and sell, the higher priority price is defined as the better price, i.e. a buy order at a higher price will take priority over other buy orders at a lower price, and a sell order at a lower price will take priority over other sell orders at a higher price.

        A market order being queued at a limit price will be treated the same as if it had been entered as a Limit Order at that price.
        2- Source of Order Priorities:
        Sources of orders shall have the following priorities:
        a- First priority:
        (a) client order
        (b) foreign investor order
        (c) market control order
        b- Second priority:
        (a) mutual fund order
        (b) issuer order
        (c) professional
        c- Third Priority:
        (a) insider order
        3- Time of Entry:
        (i) The time of entry of an order governs its priority on a First-In First-Out (FIFO) basis. Orders entered into BATS are given a time stamp, noting their actual date and time of entry. At a ingle limit price, the earliest time of entry takes priority in the queue.
        (ii) If any portion of an order remains unfilled after the opening, its time priority will be based on the actual time of entry during Pre-Opening.
        (iii) An order that participates in a fill that does not entirely deplete the current disclosed volume (i.e. is partially traded), will retain its effective time of entry and its position in the queue.
        (iv) Changing the terms of an order may result in a new effective time stamp, and may change the relative priority position of the order in the queue. Whether or not a new time stamp is assigned depends on the nature of the change to the order. See the Alteration of Orders — Change Former Order (CFO) section.
        4- Cross priority:
        Is applied starting with the order of the highest queue priority on the side designated as aggressive. This order is traded first against orders from the other house, then against the same house order.
        5- Random Factor:
        In the event that two orders are received at exactly the same time, priority will be given using a random factor.

    • Article (24)

      • Bahrain Stock Exchange's Automated Trading System

        The BATS shall consist of a Pre-Opening stage, At the Open, and Opened stage for continuous trading.

    • Article (25)

      • Pre-Opening

        1- Prior to the start of regular trading, there shall be a Pre-Opening period, during which orders can be entered to determine the opening price for each security. These orders will be queued in accordance with the Priority of Orders for Execution (Queue Priority) and shall not be processed immediately.
        2- During this period, stockbrokers can enter orders, change former orders (CFO), cancel orders and carry out inquiries on orders already in the system.
        3- As each order is queued, the system will verify whether the security is expected to open and calculates the opening price in accordance with the Opening Algorithm.
        4- A market imbalance can be created during the Pre-Opening period, whereby the best bid is higher than the best offer. In this instance, an opening price will be chosen based on the following criteria in priority order:
        a) maximum volume of shares to be traded;
        b) minimum imbalance in share volume;
        c) least net change from last day's closing price;
        d) highest share price.
        5- In the Pre-Opening period, the actual price entered for a limit order that is better than the current predicted opening price is considered private information to the stockbroker entering the order and to the Exchange. The stockbroker entering the order would see the actual price entered and be able to clearly see that the order is causing an "imbalance". The Market Controller would also see the actual price. For all other stockbrokers, the order would be treated as if it had been entered at the currently predicted opening price. However, as the opening price changes, the volume at the previously predicted opening price and the currently predicted opening price will change.

    • Article (26)

      • At the Open & Opened Operations

        1- During 'At the Open', an opening price is chosen in accordance with the 'Opening Algorithm'. The calculated opening price is intended to create the largest volume of trade.
        2- Once the opening price is chosen, all the orders that can execute at this price will take place.
        3- 'At the Open', the aggressive side is designated as the "balanced side"; i.e. the side that will be completely traded in the open.
        4- When the bid volume and the offer volume are the same, both sides will be completely traded. In this case, the side with the earliest order will be chosen as the aggressive side.
        5- The allocation of orders during 'At the Open' is based on the following :
        a) Allocation at better than opening price — Once the opening price is selected, all market orders will be fully traded, followed by limited orders at better than opening price, taking into consideration the source of order, priority and the cross priority.
        b) Shared allocation at the opening price — Once all market orders and limit orders i.e., at better than opening price are fully traded, the remaining volume will be allocated on the board lots between the numbers of the remaining orders on the opposite side. The allocation is made in the order of the FIFO method.
        c)
        (iii) Orders not completely filled — All orders entered during the Pre-Opening have a time priority based on the actual time of entry. For orders not completely filled during 'At the Open', this time priority is maintained thereafter during the trading day.
        d) Trading done during 'At the Open' on the basis of cross priority has no effect at all on the calculation of the trades for the shared allocation of any remaining volume. Shared allocation of remaining volume is done strictly on the basis of the number of orders on the opposite side of the market from the remaining volume on the designated aggressive side.
        6- At the completion of the Opening Algorithm, the market will be open for normal continuous trading. Each new order, revision (CFO), or cancellation will be processed by the system on arrival. If an order cannot be executed immediately, it will be queued in accordance with the Priority of Orders for Execution-Queue Priority mentioned earlier.

    • Article (27)

      • Close of Trading

        New orders and revisions to existing orders can be input until the closing signal.

    • Article (28)

      • Market Controller

        The Market Controller assumes the following functions:

        (a) Provides advice to members on the interpretation and implementation of trading rules.
        (b) Configures the Exchange parameters and enforces controls.
        (c) Manages the daily trading schedule.
        (d) Monitors price movements and reviews market activity.
        (e) Reviews market imbalances 'At the Open', (BATS automatically updates all imbalances).
        (f) Provides information to investigative and regulatory agencies as required.
        (g) Executes orders on behalf of the Exchange (corrects errors i.e. cancelled trades).
        (h) Controls trading activity (i.e. half suspends, reinstates a symbol for trading).
        (i) Has access to current and historical market information, including private broker information, such as undisclosed volumes, client account reference, IDS, etc.
        (j) Enters and completes trades that take place outside the regular operating hours on behalf of members of the Exchange (i.e. to enter late trade).
        (k) Changes the attributes of any of the trades that have already occurred, including the time stamp (trade correction).
        (l) Corrects any errors made by traders when they enter a trade. A trade allows them to rectify their mistake. The Market Controller, when reinstating the buy or sell orders or both when cancelling a trade, can reinstate the orders to the original time stamp.
        (m) Sends bulletins to broadcast information to traders, other stock markets and various data feeds (i.e. Reuters).
        (n) Determines the state of a symbol independently from the rest of the securities listed on the Exchange (e.g., if symbol XYZ is halted by the Market Controller, the remaining symbols in that market are nor effected).
        (o) Halts, suspends, or delays trading of a symbol in one or more of the markets that the symbol trades in (e.g., symbol XYZ can be halted in the odd lot market, but allowed to trade in the negotiated deals market if the Market Controller allows only half Odd Lot Trading).
        (p) Uses the market state function in exceptional circumstances to manually control the state of a specific market during the trading day (e.g. the Market Controller can halt the trading in the Odd Lot Market).
        (q) Sets the current state of the entire Exchange. This can be set Pre-Opening suspended or closed.
        (r) Suspends/resumes any trader groups of traders or houses.
        (s) Sets the state of tightly coupling with the CDS to ON/OFF.
        (t) Cancels the orders in a frozen trade or allows the trade to continue.
        (u) When the freeze parameters are changed in the database, the Market Controller can reload the parameters to take effect immediately.

    • Article (29)

      The following Resolutions shall be cancelled forthwith from the date of this Resolution:

      (a) The Chairman of the Exchange Board of Director's Resolution No. 1/1998, regarding the Extension of the Trading Period at the Bahrain Stock Exchange.
      (b) The Director of the Exchange's Resolution No. 2/1995, regarding Order Execution Slips on the Exchange.
      (c) The Director of the Exchange's Resolution No. 12/1994, regarding Trading of Bahraini Joint Stock Companies Shares by Non-Bahraini Residents.
      (d) The Director of the Exchange's Resolution No. 19/1991, regarding Whole or Non Orders.
      (e) The Director of the Exchange's Resolution No. 11/1991, regarding Allowance of One Minute during the Trading Session.
      (f) The Director of the Exchange's Resolution No. 10/1991, regarding the Trading of Odd Lots.
      (g) The Director of the Exchange's Resolution No. 6/1991, regarding the Price Range on the Exchange.
      (h) The Director of the Exchange's Resolution No. 12/1990, regarding the Organization of Trading Operations on the Trading Floor.
      (i) The Director of the Exchange's Resolution No. 8/1990, amending the Trading Rules and Procedures.