The MSE Board of Directors has approved the amendments to the ‘Trading Rules’ by Resolution No.:2017/08 of 2017 and sent it to FRC for approval. The notable changes among the amendments to the ‘Trading Rules’ are as follows:
- Closing price to be calculated as a weighted average of the trades within the last hour prior to trading close
The closing price determines the upper and lower limit of the next day’s trading price. The closing price has been calculated as a weighted average of the all day trading, which is being revised as the weighted average of the trades within the last hour prior to the trading close. This will make the calculation of the closing price more accurate reflection of the price trend within the trading day.
- Upper price limit for block trade to be removed
Block trades should be executed by price that is fair to the market, therefore MSE imposed 15% price limit from the previous day close on block trade price. As some securities are not regularly traded and therefore tend to be undervalued, the upper price limit is being removed.
- Order disclosed quantity’ function to be activated
Millennium IT trading program has a function that enables the traders to disclose only a part of the order quantity, also known as iceberg order. Once activated, this function will enable trades to execute large orders without affecting the market activity and the price of the security.
- New order types to be introduced
With the amendments to the ‘Trading rules’, new order types will be introduced. For instance, Fill or Kill order type enables the trades to fill the order completely as soon as the order is entered or otherwise cancels the order. Minimum Fill order specifies the minimum quantity for execution and if the minimum quantity is not executed, the order is cancelled. These new order types will enable the traders to submit orders with different specification that suit their needs and enhance the trading experience.
The amendments to the ‘Trading Rules’ will take effect upon the approval by the FRC.
MONGOLIAN STOCK EXCHANGE