• General Description of Trading and Settlement Methods in the Stock Market (doc, 144 Kb)

Stock Market

The Ukrainian Exchange has implemented the following technologies: order-driven market, quote-driven market, and repo market solutions.

Order-driven market

Basic principles of the order-driven market:

• anonymous trading based off a continuous double auction, with settlement on T+0 and 100% advance depositing of securities or cash;
• opportunity to chose the settlement day for negotiated trades;
• DVP settlement in UAH as the only available settlement option.

When a trade is executed trading participants do not have to sign any paperwork because for this purpose an analogue of the handwritten signature is used. The securities sale and purchase agreement between the exchange members is executed in e-form simultaneously with matching of the two opposite orders. This enables trading participants to cut costs related to registration of trades and allows them to offer competitive brokerage commissions to end-investors that are reasonable even in case of minimum-value trades.

Internet trading not only eliminates the costs of submitting orders to the broker on paper but also, more importantly, enables market participants to respond to changing market conditions faster.

Quote-driven market

The quote-driven market offers:

• non-anonymous quotes without the need for advance depositing of securities and cash;
• opportunity to negotiate terms of trades based on these quotes.

The quote-driven market contributes to

• improving price discovery for less liquid securities that are not fit to trade in the order-driven market;
• attracting new entrants to the exchange, for example, those who are interested in the bond market;
• expanding the list of instruments trading on the Ukrainian Exchange.

Repo Market

Currently a repo trade is the easiest way to lend money against securities, or the other way round. Though legally a repo trade is not a loan tool, it basically serves to lend or borrow securities and cash.

It is very common for the repo market to be an OTC market. Virtually everywhere repo trades are negotiated and executed over the phone. Repo trades can be settled in off-exchange settlement systems, or, on the exchange on DVP terms with advance depositing of assets. The latter option is especially preferable if cash or securities are borrowed for further investment on the exchange.

Benefits of executing repo trades in the trading system of the Ukrainian Exchange:

• the exchange ensures settlement on DVP terms;
• immediately after executing the first or the second repo leg both parties to the trade can use the obtained assets to trade on the stock exchange;
• the trading system helps to calculate the price of the second repo leg taking into account the repo rate and repo term;
• the exchange treats two repo legs as one transaction, and therefore charges the commission only for the first leg of the repo trade.

Schedule of trading on the stock market

Please, note that this trading schedule applies to all trading days (including Fridays and days before public holidays).

Please see national holidays at Trading Calendar.