Chapter 7Trading Rules and Operations
- The time of opening of the trading facility for the receipt of orders and the location, days and times upon which trading will take place and the time during which the trading facility may accept corrections to reported trades shall be specified by the Board on not less than three days’ notice.
- The Board may suspend trading at a particular session, and reduce, extend, or otherwise alter the duration and number of trading sessions.
- The Board may issue Administrative Notices on the operation of the market under a general authority granted by the Council. Requirements in respect of the location of the market, opening and closing hours, and the format of information displays and documents shall be specified by such Notices.
- All securities issued by issuers registered with the Council shall be traded by members of GASCI according to these rules.
- Permission for members of GASCI to execute trades in private, unregistered and overseas registered securities shall be subject to application to the Board.
- All customer orders must be executed by time and price priority according to the order in which they have been received from the customer, unless the Board has invoked a Single Price Opening.
- All customer orders shall be executed in accordance with the requirements of best execution and this overrides limit order requirements. (If a better price than that stipulated in a limit order is available, members are committed to execute at that price.)
- Orders submitted “at market” with no price limit have priority over limit orders except where the Board has invoked a Single Price Opening.
- If the Board does not intend to open the trading facility for the receipt of orders or trading within one month of the previous opening it will inform the Council.
Trading limited to members and representatives
Only members and registered representatives of members may participate in open-outcry trading, or execute orders against the Limit Order Book, or enter orders for a Single Price Opening auction.
- The Limit Order Book shall be maintained on the Local Area Network on the GASCI premises.
- Orders may only be posted by members during a session and at such other periods as shall be declared specified by the Market Official prior to the opening of a trading session.
- The Limit Order Book shall show bids and offers in respect of all customer orders which have not yet been executed, with the exception of block orders.
- All bids and offered shall be recorded on the Order Book and a summary display shall be maintained in the format prescribed in the Third Schedule.
- Special trade conditions relating to a bid or offer shall be shown on the Limit Order Book.
- A dealer may cancel or reduce an order on the Book, but any other change shall require cancellation and re-entry and loss of time priority.
- The Market Official shall maintain a Market Display on the Local Area Network. The Market Display shall show:-
- The last trade prior to the open-outcry session, or, where there has been a single price auction, the opening price established by the auction
- The best bid-offer on the Limit Order Book
- The best bid-offer quantities on the Limit Order Book
- The last trade in the current open-outcry session
- The highest and lowest trade prices in the current session
- The number of shares traded in the current session
- Trading shall be by word of mouth response to orders posted on the Limit Order Book.
- Execution of orders against the Book shall be conducted by time priority.
- Orders displayed on the Book shall not indicate whether they are for customers or for the account of a member or persons employed by the member; members shall ensure, however, that customers have priority in allocation of stock where all orders have not been satisfied in full.
- If trading becomes disorderly, the Market Official may invoke open-outcry rules requiring members only to deal in stocks as they are called. Under these rules bids and offers for shares made by Responding Brokers shall be in the following form: –
- for a bid, the dealer shall say: “I buy [ quantity] shares at price in dollars to the nearest tenth of a dollar which shall be expressed as “point” followed by the number of tenths”;
- for an offer, the dealer shall say “I sell [ quantity] shares at price in dollars to the nearest tenth of a dollar which shall be expressed as “point” followed by the number of tenths”.
- Bids and offers for debt issues shall be for stock units of $100 nominal value and shall be expressed to the nearest tenth of a dollar.
- When a trade has been agreed:-
- The Initiating Broker who posted the order on the Book shall forthwith up-date the Book, and
- The Responding Broker shall forthwith make out his part of a Trade Report, sign it, and pass it to the Initiating Broker;
- The Initiating Broker shall complete the Trade Report, countersign it and pass it to the Market Official;
- The Trade Report shall include the customer order references for the brokers.
- The Market Official shall issue a Market Contract which includes the broker order references and a unique GASCI trade reference number.
- Members may not deal with one another out of trading hours
- Members may execute cross-trades out of hours and such trades shall be reported immediately before the next trading session
- The Board may permit members to amend the Order Book from their offices in between trading sessions provided it is satisfied as to the security of the electronic links between their offices and GASCI’s premises,
- GASCI staff are not permitted to enter orders or amend orders on behalf of members.
- Members may be permitted to participate in trading sessions by telephone from their offices subject to Board notice approved by the Guyana Securities Council. Such trading sessions shall follow the same rules as those for on-floor-dealing save that the Market Official shall not be authorised to invoke open-outcry rules.
Single price opening auction
- The Board may invoke a single price auction to determine the fairest opening price for a previously untraded issue or for an issue in respect of which it is not possible fairly to determine priority of execution by reference to time of receipt of order.
- The Board shall announce the intention to invoke a single price auction not less than 24 hours before the opening and the Trading Official shall arrange for orders to be received by GASCI up to not less than one hour before the opening.
- Orders may be submitted for the Opening either as “Limit Orders” stipulating a bid or offered price, or as “Market Opening Orders” not stipulating a price but seeking to be executed at whatever Opening Price is determined by the opening process.
- No special conditions may be attached to orders entered for the opening process.
- The Trading Official shall determine the Opening Price according to the following procedure, using either a manual worksheet in a form determined by the Board, or a computer algorithm approved by the Board –
- record all the prices at which Limit Orders have been entered and sum the total quantity of stock offered and bid at each price;
- sum the totality of stock offered at each price plus all prices below that price;
- sum the totality of stock bid at each price plus all prices at above that price;
- identify the Opening Price -from the (b) and (c) totals – as being the price at which the greatest volume of stock subject to Limit Orders would be traded;
- where the highest bid is below the lowest offer the opening price will be the mid-price between highest bid and lowest offer;
- where the maximum volume of stock subject to Limit Orders could be achieved at more than one price, the Trading Official shall declare the higher or highest price to be the Opening Price.
- Generally, Limit Order bids above the Opening Price are satisfied at the Opening Price and Limit Order offers below the Opening Price are satisfied at the Opening Price.
Imbalance in Orders
- If there is an imbalance in Limit Order bids and offers, orders on the larger side of the imbalance shall be scaled down to ensure that the totals match and that price priority is maintained.
- Such scaling will be carried out as follows. Starting with the order(s) with the highest price priority (highest bid or lowest offer depending on the side of the imbalance) in turn, all orders at a particular price are met in full unless there are insufficient orders remaining on the smaller side of the imbalance to fill them in which case orders on the larger side of the imbalance are scaled down proportionately.
- Any unfilled orders may be filled subject to the rules governing the execution of Market Opening Orders provided that if there are insufficient Market Opening Orders to fill the unfilled Limit Orders the unfilled Limit Orders will be scaled using the same process described in paragraph (2) above for an imbalance in Limit Order bids and offers.
Indicated opening price
- The Board may require the Market Official to calculate an “Indicated Opening Price” 30 minutes before the opening of the Market and permit dealers to amend their orders in response to the indicated opening.
- The Market Official may delay the opening of the Market by up to 30 minutes if the calculation of the Opening Price cannot be completed at the official opening time.
Execution of “Market Opening Orders”
- Market Opening Orders shall execute at the Opening Price.
- Market Opening Orders shall be executed first against any residual imbalance in the volume of Limit Order bids and Limit Order Offers entered.
- If, after satisfying any Limit Order imbalance, there is a residual imbalance between Market Opening Order bids and Market Opening Order offers each Market Opening Order on the larger side of the imbalance shall be scaled down so that the totals match.
Execution of limit orders
- Orders brought forward on the Book shall have priority in floor trading when it recommences.
- Orders shall become confirmed trades, contractually binding upon the principals to the trade and upon the members, as soon as both parties have signed the trade report.
- Orders carried forward on the Book shall not automatically be entered into a Single Price Opening auction.
Pre-trade and post-trade publication by GASCI
- The Limit Order Book shall be on the Local Area Network as specified by administrative notice, and all members shall have access to the Limit Order Book during trading hours.
- Hard copy of the information displayed on the Limit Order Book shall be made available to members at the end of every trading day.
- The Market Official shall issue each day a list of confirmed trades which shall be copied to all members.
GASCI shall publish trade prices and volumes –
- immediately after a trading session;
- as soon as a single price opening auction has been completed;
- when a trade relating to the limit order book is reported by one of the participants.
GASCI shall publish a Bulletin for each day that trading takes place, recording the prices of all trades in each security, the volume of trading in each security, the opening prices, the closing prices, the highs and lows for the day and other information specified by the Board.
A member executing a cross-trade outside a trading session must first satisfy all outstanding orders on the Book executable at the intended price of the cross and then execute the balance of its cross within the best bid and best offer on the Limit Order Book.
The Board shall set the minimum size of trade subject to the block trading rules.
- Block trades may be executed at up to 20% premium or discount against the current market price established at an opening auction or if there has been no auction in the previous 5 working days the current market price established by the best/bid offer on the Limit Order Book.
- If a block trade is crossed it must be at the crossing price plus or minus up to 20% premium or discount.
- Members undertaking crossed block trades must clear all Limit Orders on the Book that have time priority against their cross.
- Crossed block trades must be exposed via the Limit Order Book to intervention by other members for a period of not less than 30 minutes.
- Members may not intervene in a crossed block trade for less than 50% the total offered or bid.
Members executing a trade shall report it immediately to GASCI.
GASCI shall provide members with confirmed trade reports in respect of –
- trades executed through a single price auction;
- countersigned trade reports from members for trades in respect of limit orders on the Book; and
- cross trades affirmed by the member conducting the cross.
A confirmed trade may only be rescinded by the consent of both the buyer and seller member.
Transaction contracts and broker transfer form
Every trade entered into by members with one another shall be evidenced by a market contract.
Every trade undertaken on behalf of a customer shall be evidenced by a written contract note issued by the member to the customer on the day of the trade –
- where a member is acting for its own account every contract therefore shall so state;
- where a member is acting in the capacity of an agent, every contract therefore shall state the price at which the transaction occurred and the commission charged;
- the contract shall set forth any special conditions relating to the contract; and
- every contract shall bear the words “ member of the Guyana Association of Securities Companies and Intermediaries Inc.”
All transfers shall be recorded on a duly executed Broker Transfer Form.
Settlement of transactions
- In this rule-
- “cash delivery” means delivery of the cash bid price before close of regular banking hours on the date of the transaction;
- “delayed delivery” means delivery of the funds on or before the period set forth as a special condition in the transaction contract.
- All transactions shall be settled between members within five business days of the date of the transaction, except for those transactions subject to special conditions, such as “cash delivery” or “delayed delivery”.
- Payments in settlement of transactions, unless otherwise agreed to between the parties, shall be by cash or certified check.
- The seller is responsible for recording the transfer of the securities in the book of the listed company. If such Registry book is closed, then the transfer shall be recorded as soon as the Registry book is opened.
- The seller is solely responsible for the genuiness of the securities. If the securities are not properly negotiable, then seller shall promptly replace the securities with properly negotiable ones.
Procedures for enforcement of transactions
If a member defaults on settlement of a trade the non-defaulting party to the trade shall provide written notice to the Secretary of GASCI and if the defaulting member does not remedy the default within one business day, the non-defaulting member may buy-in or sell-out against the defaulting member at the defaulting member’s expense. In the case where a client defaults GASCI can instruct a Broker not to engage in any future transaction with that client relating to the exchange.
Ex-dividends, ex-rights, etc
All orders shall be executed at prices that are ex-dividend or ex-other benefit unless otherwise indicated at the time of the trade by the order condition “cum dividend”, or “cum” other benefit.