new PSE trading rules

erFor the investing public and trading participants,

The Philippine Stock Exchange issued a new trading system, which will take effect on July 26, 2010. The new trading system (NTS) will use a new trading software, developed by NYS Technologies SAS which is wholly owned by NYSE Euronext, which operates the largest exchanges around the world eg. New york Exchange.

The major changes in the trading system are as follows:

1. New Trading Schedule

There will now be a Pre-Close period prior to the Run-off Period of 12noon.

8:45 am - National Anthem
9:00 am - Pre-Open*
9:30 am - Market Open
11:57 am - Pre-Close *(NEW)
12:00 pm - Run-off / Trading at Last
12:10 pm - Market Close

* You can modify and/or cancel your orders during the Pre-Open period and the Pre- Close period.

2. New Board Lot and Price Fluctuation Table

3. Implementation of Trading Price Limits

The price of an order shall be within the Trading Limits for the Trading day. There are two limits implemented; i.e., Static and Dynamic Thresholds.

The Static Threshold used to be known as the Floor and Ceiling Prices and is computed as follows:
- The upper Static Threshold shall be fifty percent (50%) above the Reference price (closing price)
- The lower Static Threshold shall be fifty percent (50%) below the Reference price (closing price)

The Dynamic Price Threshold** is computed as follows:
- Dynamic price threshold (upper) = last traded price + (last traded price multiplied by the Dynamic tick)
- Dynamic price threshold (lower) = last traded price - (last traded price multiplied by the Dynamic tick)

** An order entered breaching above or below the Dynamic Threshold will cause the security to be Frozen by the PSE stopping all trades until the PSE reactivates the security with a new Dynamic Threshold.

Example:
If the last traded price for stock A is 5.00 pesos and it has a PSE defined dynamic tick of 0.05 then:
- Stock A dynamic price threshold (upper) = 5.00 + (5.00 x 0.05) = 5.25
- Stock A dynamic price threshold (lower) = 5.00 - (5.00 x 0.05) = 4.75


4. Closing Prices will now be calculated during the Pre-Close Period which will be similar to pre-opening calculations of the opening price.

A Pre-close period (from 11:57-12:00) will be added similar to pre-open that will freeze matching for three minutes but allowing posting. Cancellations and modifications to orders are only allowed from 11:57-11:58 thereafter only posting of new orders are allowed until 12:00. Noon time will bring about a closing price that will match pre-close posted orders then continue trading at the closing price until 12:10.


5. Partial matching of Odd-lot orders will now be allowed.


6. Good-Till-Cancelled orders will now cover a period of seven (7) calendar days instead of seven (7) trading days.

All present GTC orders will be cancelled by end of day Friday July 23, 2010 to make way for the new data format on Monday. Placement of GTC orders will resume on July 26 Monday 9:00 AM. GTC orders may be entered during ATO (after trade hours). But GTC orders that have already been sent to the Exchange can only be cancelled or changed during allowable moments in pre-open (9:00-9:15) and during trading time. You can still send an advanced notice to cancel or change the GTC order during ATO periods but its effect on earmarked balances and positions will only take effect at 9:00 AM onwards.


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Since I am one of the small-time investing public, I am interested to know what will happen next week, hoping that the transition will go smooth.

As of this date, my stocks bought through Citiseconline are ALI (Ayala Land Corporation), CHIB (Chinabank Corporation), EDC (Energy Development Corporation), MWC (Manila Water Corporation), SECB (Security Bank Corporation), SMDC (SM Development Corporation), URC (Universal Robina Corporation), which gave me an average gain of 31.98%. Yey! This is way way better than our time deposit interest rate : )

I can't wait to sell some stocks to realize my gain, and invest on other stocks.

Thank you Citiseconline for always providing updated information regarding my investments and stock exchange news.

Here's to a more fruitful investment-filled future : )

--Wondermom A.