Automated Trading Rules

Introduction

The Automated Trading System (ATS) is designed to match buy and sell orders

placed by the member firms of the CSE. Bid and Ask prices are entered into a central

electronic order book. During trading hours, orders are matched according to fixed

rules and execution prices are set. Price and volume details of all completed

transactions are electronically communicated immediately to all the members

involved.

The trading day at the CSE will be divided into following time periods:

1. Pre-open

2. Open-Auction

3. Regular trading

4. Close

During pre-open the system accepts orders unless otherwise stated in Rule 3 (page 9).

Orders can be amended and cancelled during pre-open. However, no executions take

place during this stage.

During open-auction, the system temporarily closes the order book and starts

matching orders. It establishes the opening price and determines the orders to be

executed according to the rules for the open-auction period (please refer Rule 4 –

page 9).

During regular trading new orders are continually matched to existing orders in the

order book according to Rule 5 (page 11). If an order cannot be executed it is stored

in the order book.

Preference shares, non-voting shares, and warrants do not update the market indices.

The following rules are applicable to shares, warrants, units of closed-end

funds/ETFs and any other security to be determined by the Board of Directors of the

CSE (commonly referred to as security/securities in these rules) which are traded in

the ATS.

Entering orders

Clients who have accounts with the Central Depository Systems (Pvt.) Ltd. (CDS)

place their orders with the brokers, either directly or through a custodian bank.

Orders are entered by the brokers through the ATS trading terminals, which are then

transmitted on-line to the ATS.

The ATS trading terminals are located in the member firm’s offices. The trading

terminal performs three functions; display of market data, display of trader’s orders

and executions, and acceptance of new orders, amendments and cancellation of

orders.

The ATS acknowledges the receipt of an order, marks it with a time stamp, and

checks it for validity (please refer Page 8 – Order Validation). If it is technically

valid, processing continues. If not, it is returned with the appropriate comment. No

checks apart from those explicitly stated in these rules will be performed on order

size or price.

The ATS maintains an order book for each traded security, divided into bids and

asks. The prices are determined and orders executed according to specific rules

detailed in the ATS Rules.

Division of Market

The market is divided into the normal lot, odd lot and block books. The block book is

sub divided in to crossings and all or none blocks.

Trading Session

The securities market is open from Monday through Friday except on days declared as

holidays by the Exchange.

Pre-open : 9.00 A.M. to 9.30 A.M.

Open-auction : 9.30 A.M.

Regular trading : 9.30 A.M. to 2.30 P.M.

Close : 2.30 P.M.

In the event of technical problem with the ATS the Exchange may change the above

trading hours as necessary.

February 2009