ParticiPant’s GuideFor investment firms and credit institutions in Romaniathat want to directly access Bucharest Stock Exchange’s market

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Admission to trading procedure, for BVB’s Regulated Market, implies a process whereby a company, authorized as an intermediary of

Admission to trAding BuchArest stock exchAnge (BVB) mArket PArticiPAnt

investment services that wishes to obtain the status of BVB Participant, requests access to the market showing that it fulfills the requirements both for trading start and also for ensuring the post-trading support.

Completion of a request for granting the Participant status

Ensure membership to the clearing and settlement system and the registry

Complete a standard set of documents

Proof of membership to an investor compensation scheme

Payment of the access fee (in installments, according to the contract signed)

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ParticiPant’s Guide

Admission of SSIFs as Participants to the BVB trading system implies submission of the application for admission, in accordance with BVB documentation, accompanied by the following documents:• Individual documentation permit

issued by the Financial Supervi-sory Authority (ASF), authorizing the company’s financial invest-ment services and a proof of registration in the ASF registry (a copy);

• Articles of incorporation, certif-icate of registry with the Roma-nian Trade Registry (ORC), all decisions rendered by GSM, all additional acts to the articles of incorporation and all the conclu-sions of delegated judge attached to ORC (a copy);

Admission of credit institutions as Participants to the BVB trading sys-tem implies submission of the appli-cation for admission, in accordance with BVB documentation, accompa-nied by the following documents:• Proof of registration in ASF regis-

try (a copy);• Individual documentation permit

of authorization and registration in ASF Registry, released by ASF for the personnel authorized by ASF (financial investment agents, delegated agents, representatives from the internal control depart-ment etc.) (a copy);

Admission of an Investment Firm to trading (SSIF)

Admission to trading of a credit institution

• Individual documentation for permit of authorization and registration in ASF Registry, released by ASF, for the authorized personnel (financial investment agents, delegated agents, representatives from the internal control department etc.) (a copy);

• Information on the Board members, managers, stockbrokers and repre-sentatives of the internal control department (according to the specific documentation of BVB);

• Specimen of signatures of all persons who will sign correspondence with BVB, indicating area of responsibility for each person in conformity with BVB documentation;

• information materials for clients that set out the principles of company’s activity (a copy);

• If the case, the annual financial audited report that includes the financial statements with a balance sheet, income statement, statement of equity changes, cash flow statement, accounting policies and explanatory notes together with Board members Report and Financial Auditor’s Report – for the previous year of activity;

• If the case, half-year report that incudes financial statements with a balance sheet, an income statement, statement of equity changes, cash flow statement;

• If the case, a mandate agreement concluded with another participant;• Any other documentation considered necessary by BVB.

• Information concerning the manager of the organizational structure related to operations on the capital market, the stock brokers, financial investment services agents and representatives from the internal control department (according to the specific documentation of BVB);

• Organizational chart related to the operations on the capital market; • Specimen of signatures of all persons who will sign correspondence with

BVB, indicating area of responsibility for each person, in conformity with BVB documentation;

• Information material for clients that set out the principles of conducting business (a copy);

• Any other documents considered necessary by BVB.

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Having regard to the request for admission to trading, the participant must meet the following general requirements to start trading:• Meet the technical equipment

requirements (hardware and software minimum configura-tion) as well as minimal technical requirements for using Arena Terminal interface, as provided in the BVB system manual;

• Appoint at least 2 professionals for managing the investment ser-vices who meet the authorization requirements of a stockbrokers, in conformity with BVB Rulebook;

• Pay the participant admission fee (fee for purchasing a license of trading), as included in the List of Fees and Commissions of BVB;

The following conditions must be fulfilled in order to acquire the title of a stock broker:• Holding a valid authorization for

an agent of financial investment services, issued by the ASF in case of companies providing financial investment services and branches of intermediaries locat-ed outside EU Member States;

General requirements for Participants regarding trading start

BVB’s Stock-Broker permit

Payment of this fee can be made in installments, according to the contract signed between the investment firm (ssiF) / credit institution and BVB, taking into consideration a payment scheme that is suitable for the given ssiF / credit institution. BVB’s General Manager is authorized to establish terms and conditions of payment of the admission fee for the partici-pant to the BVB’s trading system.

• Prove its direct or indirect membership/participation to the clearing and settlement system and / or registry approved by ASF and BVB;

• Complete and sign a standard set of documents provided by BVB; • Obtain / possess membership to the Investor Compensation Fund, within

the time-period specified in the ASF regulation.

Admission to trading: • The Board of Governors can render decision regarding company’s admission

and can enter it in the Participants’ registry. • BVB will publish on its website and will inform the Participants, Central Depository and

asF regarding the registration in Participants registry of the respective company, within 3 working days from the date of registering in the Participants registry.

• The CEO of BVB will establish by issuing a decision, the date of commencement of trading on the BVB regulated Market. He/she will also issue a decision authorizing exchange brokers to the respective participant.

• Attendance to the courses organized or recognized by BVB, payment of a fee for the broker exam (according to the list of tariffs and commis-sions charged by BVB) and the passing of professional tests and exams, including the recertification, renewal or verification of the brokers’ obtained quality;

• Personal data, according to the specific BVB documentation; • Possession of an individual labor contract in given company or an

investment firm from an EU Member State or one of their branches, the existence of a contractual relationship with the respective company.

BVB establishes conditions for the organization and conduct of examinations and tests for the brokers. For the broker courses organized by BVB, presentations on the trading system and on the financial instruments are provided on request.

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ParticiPant’s Guide

Access Interface BVB Arena system is developed in-house and is based on a client server architecture that can be accessed remotely.

Access to the BVB system can be provided through different access interfaces, such as:• Arena Trading Terminal (GUI) –

client application, designated for brokers, offering all the features available for trading on BVB;

• Arena Gateway without GUI [WGUI]) – application / API that is based on the protocol developed in-house, provided by BVB and which acts as an intermediary between system Participants and BVB system, specialized for Participants connecting to BVB systemB;

• Arena FIX – an interface that allows access to the BVB system that uses standard messaging protocol FIX. Versions 4.4 and 5.0.

They allow a mechanism of Strait-through Processing between a broker / investor and BVB system for the Direct Market Access. Gateway/FIX also provides all the features available for trading on BVB. All applications [GUI/WGUI] access interface of the remote system ARENA®, through the communication firms approved by the BVB.

Minimum bandwidth requirement: 28 kbps• Selective subscription to market data:

mechanism of subscription and publication; • Real-time compression packages;• Image of the market, based on incremental

and reconstruction ‘market by order’.

Access to BVB’s trAding system

Network providers: they need to be approved by BVB; they must pro-vide access to the principal location and to the location DR.

Connected members: each member must connect to BVB; it must con-nect on 2 separate lines (principal and backup) and on the BVB/DR line. VPN channels are implement-ed by data providers.

Data encryption: the internal mech-anism ARENA is based on PKI.

Selective access & complete history: history for all system entities; authorization dif-ferentiated on the level of markets / instruments.

Connectivity and security – main characteristics of ARENA

BVB electronic platform is based on modern technology, diversified facilities and perfor-mance options that promote greater transparency and orderly framework for conducting operations. it is a portable, secure and open platform that allows easy connection with other systems.

BVB offers a fully-automated electronic system, characterized by high per-formance and flexibility in configuring specific parameters and adding new features. The system provides the following functions:• Dynamic configuration of system entities

(markets, types of symbols, symbols, instruments);• Efficient administration of various entities,

based on the extensive number of parameters;• Configuration of the information in real time for different levels

(markets, symbols, market symbols);• Implementation of new instruments, transactions methods

and techniques.

BVB system is characterized by flexibility and customization therefore al-lowing incorporation of specific elements stipulated in the BVB regulation. The process of increasing the efficiency of the operations performed in the system is based on automatic verification of the parameters. Setting these restrictions in the system allows the intermediaries to conduct business in an environment that is safe and that operates with a limited number of errors.

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Arena Trading Platform offers the following options:• Various trading methods: order

driven, based on quotations, deals;

• Mechanism of ‘price discovery’: auctions (single price), continu-ous trading, mechanisms dedicat-ed to public offerings, quotes etc.;

• A number of market types, according to the specific type of a financial instrument: regular, deal, POF, buy-in, sell-out etc.;

• Different types of orders: limited, market, unpriced, hidden order, quotas etc.;

Main aspects of trading

• Valid orders: Day, Good Till Date, Open, Fill Or Kill;• Facilities for the activity of market-makers (dedicated facilities /API for

automated quotations).

The system provides a number of user-friendly operating facilities provided together with the access to interface, updated in real-time with the market data and historical statistical data.

Customized options are based on the following features: own settings (configure local workstation, set local alerts for financial instruments or for a specific market or a financial instrument on a particular market). Differ-ent facilities for selection, sorting and filtering information, data process-ing facilities, trading options that permit the accommodation of dynamic system and confirmation of applied standards and practices

BVB, as system and market operator, offers access to trading for an extended number of financial instruments, both for the Regulated Market an also for the alternative trading system.

Financial investment companies that are BVB Participants receive a distinct code (as well as distinct identifier / user code, depending on the interface used) that allows them to follow their actions in the BVB system.

Characteristics of the trading activities carried out through the BVB trading system:• Orders are recorded in real time,

on the company allocated code, regardless of the access interfac-es used for placing the orders on BVB;

• Orders can be placed / adminis-tered depending on the type of financial instrument, market etc.

Information available in BVB trading system

Trading system allows to view the following information: • Information regarding the market data (registry order, indicative quotes,

information regarding the opening, details about the transactions, statis-tics) are displayed in the BVB system in different reports / queries that are updated in the real time or on demand;

• All Participants can see the order book for each financial instrument traded in BVB system, with various options: all available orders, grouped based on the price (cumulative volume and serial number) – market by price or just own orders;

• Details on orders and transactions are displayed in specific reports that are available in the trading system, with different types of information being provided.

Arena Trading Platform provides general information about the transac-tions (symbol/instrument, market, price, volume, transaction date, the time) that is available to all the Participants. For own transactions, the Participants can access additional information such as the transition tick-et, part of the truncations, value, order number, account involved, date of settlement, bank account and other information related to the settlement.

Statistics are available in the trading system under different levels of aggregation (stock, market, symbol / instrument, market symbol). This information can be viewed for the current trading session or for a selected period (there is also a specific option that provides historical data from the storage system).

ParticiPant’s Guide

Markets and instruments On BVB’s Regulated Market, the Participant has access to the following financial instruments and type of markets:

Shares and fund units• Markets used: regular markets

(market order, the main market, trading is based on blocks), deal market (based on deal sites, bilateral negotiations);

Bonds (corporate, municipal, governmental) • Markets used: regular market

(market order, the main market), deal market (based on dealing and bilateral negotiations);

• Particularities of trading bonds on BVB: trading is done on the basis of net price; system au-tomatically calculates accrued interest (positive or negative) and the value;

ETFs• Markets used: regular market (market order, the main market, trading is

done on the basis of blocks); deal market (based on dealing and bilateral negotiations);

Certificates (structured products)• Markets used: Regulated Market (market order, main market), deal mar-

ket (based on dealing, bilateral negotiations);• Types of structured products available on BVB: index, turbo (long /

short), bonus, with projected capital;• Types of underlying assets: local shares, international shares, futures

contracts on oil, gold or silver, local indices, international indices; • Trading redemption value can unwind in the BVB trading system

for certificates that have reached the knock-out price;

Pre-emptive rights • markets used: regular markets market order, main market);

Allotment rights• Markets used: regular market (market order, main market), deal market

(based on dealing and bilateral negotiations);

Types of financial instruments traded on the Alternative Trading System (ATS): Local shares: • Regular market (order driven market, main market), • Deal market (based on dealing and bilateral negotiations)

International shares (EU and US blue chips) are traded on:• Regular market (market order, main market)• Deal market (based on dealing and bilateral negotiations).

trAding And Post-trAding AsPects

Fees Information regarding fees and commissions set by BVB is available on www.bvb.ro in the ‘Regulations’ section.

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www.bvb.ro

Clearing and settlement of trans-actions on BVB is undertaken by the Central Depository, institution belonging to the BVB Group. Central Depository (www.depozitarulcentral.ro) provides regulatory support and post-trading operations.

Settings available in the system for the post-trading operations:• Settlement period is established

separately for each financial instrument, depending on the default settlement period for each type of the financial instrument;

• System automatically checks the default settlement period for each financial instrument and then assigns each order/transaction settlement period accordingly.

Clearing and settlement operations

34 - 36 Carol I Boulevard 020922, 14th Floor I Bucharest, sector 2, ROMANIAPhone: +4021 3079500; e-mail: participanti@bvb.ro