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Clarifications on how the automatic expansion of the variation limits works

12/19/2018

In order to clarify the information circulating in the open regarding the price changes registered by some of the shares traded on the Bucharest Stock Exchange (BVB), please find below the following clarifications:

BVB applies automatically the mechanisms regarding price limits, as described in the BVB’s Rulebook – market operator, as follows:

  • maximum percentage variation of the orders for all financial instruments
  • mechanism for extension of the price limits for shares included in the indices BET and BET-FI as well as for the international shares

The main requirements for extending the price limits are as follows:

  1. They are determined based on orders from the main market (REGS) of the envisaged symbol and it is applied only in its Open status
  2. If during a monitoring period (5 minutes), there are continuously registered one of the following situations with regard to orders from the register of active orders for the respective symbol in main market:
    a) best buy order from the registry of active orders is at the maximum allowed price or

b) best sell order from the registry of active orders is at the minimum allowed price.

The extension of the price limits is carried out automatically when the requirements for applying the automatic procedure described above are met, while after the expiration of monitoring period the BVB system initiates the automatic procedure to extend the price limits in terms of price evolution (ascending or descending) for the respective symbol in Main Market, that consists in the following successive price limits:

a) + percentage compared with the reference price: +25% (first extension); +35% (second extension); +40% (third extension) – for situation described at point 2 letter a)

b) - percentage compared with the reference price: -25% (first extension); -35% (second extension); -40% (third extension)  – for situation described at point 2 letter b)

 

Further information regarding the application of the mechanism for extension of the price limits is available in the BVB’s Rulebook – Market Operator and related procedures.