Trading Flashcards
“Auction call session”
A period of time during which orders FOR INCLUSION IN AN AUCTION can be entered into and deleted from the central order book and there is no automated trading.
Define “auction matching”
The process of matching buy and sell orders ACCORDING to a MATCHING ALGORITHM at the end of an auction call session.
Define “auction price”
The price of transactions resulting from an uncrossing at the end of an auction call session.
A transaction matched automatically in the JSE equities trading system during continuous trading.
“automated trade”
A transaction matched automatically in the JSE equities trading system resulting from an uncrossing at the end of an
auction call session.
Define “auction trade”
“central order book”
The order book of the JSE equities trading system in which automated and auction trades occur according to price
then time priority
“trade cancellation”
The cancellation of an on book or off book trade on the same business day or next business day.
“direct market access”
The process whereby an order is received electronically by a TSP from a client and then submitted electronically to the JSE equities system by means of an order entry application operated by the TSP, without the intervention of a registered securities trader.
“equity securities”
Those JSE listed securities traded on the JSE equities trading system
“foreign professional market participant”
A person who does not reside in the Republic and whose regular business is the buying and selling of securities.
The computer system or systems and associated network or networks operated or used by the JSE for the purpose of providing a market for the trading of equity securities
JSE equities trading system
The person appointed by the JSE to supervise, administer and control the daily operations of the JSE equities trading system.
“market controller”
“market order”
An order submitted to the central order book during an auction call period with no price limit, which is held on the central order book and may execute either in full or in part against eligible orders, at the price of a new order entered into the central order book or at the reference price.
market order extension session
An extension to an auction call session WHICH OCCURS when there would be UNEXECUTED MARKET ORDERS on the central order book following AUCTION MATCHING.
member trading application
Any system, software or program operated by a member which submits data to and receives data from the JSE equities trading system.
Define “Agricultural Derivatives”
those commodity securities which are derivative instruments and the financial terms of which are determined by an underlying agricultural product, which is physically settled in terms of the derivatives rules.
“order”
An instruction from a client to buy or sell equity securities or an instruction to amend or cancel a prior instruction to buy or sell equity securities
Define “order entry application”
Any system, software or program operated by a member which facilitates electronic submission of orders to a member trading application and which complies with such requirements as the JSE may from time to time prescribe in the directives.
Define “on-book trade”
Means a transaction in equity securities executed by a member on the central order book of the JSE equities trading system.
Define “pre-issued trading”
Transactions effected in pre-issued securities in accordance with the rules.
Define “pre-issued securities”
Entitlements to equity securities the listing of which on the JSE has been approved but where the listing becomes effective only after a number of conditions have been fulfilled on or before the commencement date of official trading.
“price monitoring extension session”
An extension to an auction call session which occurs when the indicative auction price is a specified percentage or more away from the reference price.
Define “reference price”
The last auction or automated trade price or the previous closing price, whichever is the most recent, or in the absence of a last auction and automated trade price or a previous closing price, a price as determined by the JSE.
Define “registered securities trader”
An employee of a member, registered with the JSE and who is authorised by such member to enter and execute orders through, and report trades to, the JSE equities trading system on behalf of such member.
Define “off-book trade”
A transaction in equity securities negotiated off the central order book and submitted by a member to the JSE equities trading system.
Define “non published off book trade”
An off book trade or transaction which is not published to the market.
Define “volatility auction call session”
The auction call session which occurs if an order is entered that would execute at a price that is equal or greater than a percentage, as specified by the market controller, away from the reference price.
Are all transactions in equity securities by a member required to be conducted through the central order book of the JSE equities trading system?
Yes, unless the transaction meets the criteria set out for off book trades
What are the requirements for a person who seeks to be registered with the JSE as a registered securities trader?
- He must satisfy the fit and proper requirements.
- Must have passed the Registered Securities Trader examination prescribed by the JSE.
What are members accessing JSE systems at all times required to do?
- Maintain and enforce appropriate security procedures which are designed to prevent unauthorised persons from having access to any JSE systems, member trading applications or client applications.
- Have the necessary resources to ensure that any data sent to or received from JSE systems does not interfere with the efficiency and integrity of the equities market or the proper functioning of the JSE systems.
When and who reports off book trades to the JSE trading system?
In the case of an off book trade between two members, the members must agree on which member will initiate the submission of the trade to the JSE equities trading system.
Off book trades executed during trading hours must be submitted to the JSE equities trading system without delay.
Off book trades executed after trading hours must be submitted to the JSE equities trading system within 45 minutes of the commencement of the off book trade reporting session on the next business day, with the exception of nonpublished off book trades which must be submitted to the JSE equities trading system before 10h00 on the next business day.
What is a block trade?
a transaction where ** a member trades as an agent or a principal** in a single equity security and the transaction comprises at least the specified minimum value determined by the JSE according to the Average Daily Value tier attributable to that security, as set out in the directives
Define “BBE codes”
Means the Broad-Based Black Economic Empowerment Codes
Off book transactions do not have to be executed through the central order book. What type of off-book transactions may validly be reported to the JSE equity trading system? (12)
- Block trades (BT).
- Book Build (BK).
- Corporate finance transactions (CF).
- Portfolio transactions (PF).
- Late trades (LT).
- Exercise of warrants (WX).
- Exercise of traded options (TX).
- Exercise of options (OX).
- Off order book principal trades (OP).
- Give-up trade (GU).
- Next day cancellation of on book trade (LC & NC).
- Delta trades (OD).
What is an off order book principal trade?
An off order book principal trade is a transaction where a member trades as a principal in a single equity security with a foreign professional market participant.
Which types of off book transactions are not published?
- Give up trade.
- Exercise of options.
- Exercise of warrants.
- Exercise of traded option.
- Delta trades.
- Next day cancellation of a non-published off book trade.
What is a bookbuild trade?
Transaction where a member trades in a single equity security as an agent or a principal with another member in order for the second member or its clients to participate in a bookbuild. The member managing the bookbuild must advise the Director: Market Regulation of the bookbuild prior to reporting a bookbuild trade
What are the criteria for Block Trades?
the transaction must comprise at least the value specified in the table below, according to the Average Daily Value Tier to which that security is assigned by the JSE:
Tier 1 = min R30 000 000
Tier 2 = min R25 000 000
Tier 3 = min R20 000 000
Tier 4 = min R15 000 000
Tier 5 = min R10 000 000
Tier 6 = min R7 000 000
Tier 7 = min R4 000 000
Tier 8 = min R2 000 000
Tier 9 = min R1 000 000
Tier 10 = min R1 000 000
above 10mil akhula nga 5m below 10 ehla nga 3,3,2,1,0
What is a corporate finance transaction?
An off book transaction which:
1. Must be entered into in writing.
2. Requires public notification in the press; and
3. Complies with the requirements of transaction categories 1 or 2 of Section 9 of the Listing Requirements of the JSE.
What is a portfolio transaction?
An off book transaction which -
1. Has a minimum value of R15 million; and
2. Comprises at least 10 different equity securities none of which exceeds 25% of the total value of the portfolio.
