Start > General > Electronic Trading System

  
Electronic Trading System

  

The Electronic trading System (ELEX), implemented in August 1995, is a mechanism developed to facilitate trading operations on the Lima Stock Exchange.

This system has been developed under a client-server model which optimises the handling of market information, enabling the user to carry out daily trading transactions by interacting with the Exchange's central computer in real time through a personal computer installed in his/her own office.

The configuration of the ELEX System has permitted designing a trading mechanism that makes possible the coexistence of trading on the Exchange floor with remote trading through terminals, this mechanism having been established for the stock market. Thus proposals and transactions with shares inscribed on the Exchange can be entered in the system simultaneously, through an ELEX terminal or on the Exchange floor using notes, which are registered through a scanner system.

Repo Operations and Debt Instruments are negotiated exclusively through this new system, ELEX. These operations are no longer carried out on the Trading Floor, where only stock is traded through spoken offers and bids.

This system allows stock exchange users to enter bids and trade in securities from terminals located in their own offices, using the following modules:

- Equity Securities Module
- Debt Instruments Module
- Repo Transactions and Securities Lending Module
- Money Market Module

- Primary and Secondary Placement Module

- Forward Transactions with Premium Module

- Public Offering Module

- Special Auction Module

- Foreign Exchange Market Module

  
A. Advantages
 
Easy Handling: The user can enter and make firm buying and selling bids and/or consult the System's various information charts, utilizing only the mouse or trackball. Moreover, if the user wishes, he/she may move through the different options of the system by using the keyboard.

Personalized Use: The user can configure the system according to his requirements or needs to trade or consult, within Windows, which uses the most modern technology designed for systems of this type, due to the versatility of handling. In this way the BVL complies with the recommendations to standardize and also permits future interconnection with trading systems in other stock exchanges.

Updated information: The system automatically updates, in real time, market information such as prices, proposed transactions carried out, indices, among others, in all the system's tables.

Client-Server Structure: The structure designed for this system benefits from employing multiple terminals to administrate, distribute and utilize large amounts of information simultaneously, efficiently and rapidly.

Safety and Confidentiality: ELEX assigns users different levels of access to the system (trading, reading and consultation) as well as secret codes which grant an adequate degree of safety and confidentiality.


 
Go to Top
B. Operative Phases
There are different operating stages in each module of the ELEX system:
Stock Module:
1. Entry of firm bids : During this phase, from 9:00 to 9:30 hours, stock brokers enter their firm bids for buying or selling, which cannot be withdrawn until after the opening of the Exchange session, which shows at that time the accumulation of same with their respective prices, anonymously in all the terminals.
These bids are automatically applied by the system at the moment trading begins, if they have the conditions necessary for this. Should such conditions not exist, they remain in force during the trading phase.
The initial application of firm bids permits comparing all the registered proposals, with the purpose of determining one sole price that permits assigning the greatest amount of shares possible to each security.
Moreover, it permits determining the quantities offered and requested for each security to different price bids, considering that the buyer and seller will always accept better conditions than those proposed.
The application price for each security determined in this procedure is considered as the opening price of the day for the trading phase of this security.
2. Trading: It is the period between 9:30 and 13:30 hours, during which buying and selling bids enter and continuous transactions are traded.
To carry out operations, the system considers two criteria. The first is the best price, that is to say, in the case of bids to buy from the highest to the lowest price is adjudged, while in the case of sale bids they are adjudged from the lowest to the highest. The other criterion is the best time, that is to say, for the same price, the chronological order in which these bids were received is considered.
3. Closing: Between 13:30 and 14:00 hours operations are effected at their respective closing prices.

Bonds and Mortage Notes
Trading in bonds and mortage notes in this market, is done through two daily public auctions, with the selection being automatically performed by the system. Each bid consists of the following stages:
1. Bid entry : Participants may enter purchase and sales bids into the system. They cannot be seen by the market, only by the particular which entered them. This stage takes place between 9:00 and 10:00 hours for the first auction, and between 11:30 and 12:30 hours for the second auction.
2. Break and display: For information purposes, the system carries out a pre-auction process considering all securities for which at least one buy or sale has been bid. The prcedure used is the same as that used for the auction process, where the ELEX system shows the supply and demand for each security, totalled by Expected Rate of Return (ERR), on the basis of bids entered in the preceding stage. No bids may be entered, withdrawn or amenden during this period, which occurs between 10:00 and 10:30 hours for the first auction, and between 12:30 and 13:00 for the second auction.
3. Bid entry and matching: During this stage, the ELEX system continues displaying aggregate supply and demand by ERR. In this period, users may only enter bids for securities for which there was at least one bid during the first stage, provided the lowest buy price or the highest sale price are matched or bettered. Bids cannot be withdrawn and their matching must be in terms of nominal amount and/or ERR. This stage takes place between 10:30 and 11:15 hours, and 13:00 to 13: 45 hours for the first and second auction respectively.
4. Adjudication: The ELEX System performs the adjudication process, which consists of finding, for each security, the market Expected Rate of Return (ERR) which will permit the adjudication of the highest nominal amount, producing the highest number of trades at such a rate.

Repo Module
  Trading in this market is continuous and directly driven by the user. This is to say that there is not matching as in the case of equities. To apply a bid and trade in the repo transations market, the user must select from the buy and the sale bids outstanding, as the case may be, and directly apply those which best fit its requirements. This process takes place between 9:00 and 14:00 hours.

Money Market Module
  Trading in this market is continuous and directly driven by the user, The systems allows sellers to place their bids, permitting buyers to apply theirs directly; or if desired, propose different prices from those entered by the sellers. Trading takes place between 9:00 and 14:00 hours.

Once the session is closed, the Stock Exchange carries out Administration of the System and the final processing of the day.

Moreover, it is important to note that all information coming through the ELEX System can be saved by the users at any time by using one of the options of the main menu.

 

  
C. The Windows of the System

The windows of the system may be divided into two groups:

  1. Information Tables: These are windows which contain information of the market and cannot be modified by the users, they are generally stock lists, prices, purchase and sales bids, transactions carried out, classified by group and by broker, the correlative of operations etc.
  2. Forms: Forms can be used by the user when same wishes to carry out some specific action. The different types of forms permit: entering proposals, selecting securities, canceling or modifying bids, applying bids and saving tables.
  

D. Methods available for Entering Bids in the Equity Securities Market

In the case of stock, the bids must be presented on the Floor for entry into ELEX or directly from the computer terminales located in the brokers' offices.

The bids entered on the floor may be open , voiced on the Trading Floor or made firm, entered into ELEX through a scanner . These firm bids have priority over open bids.

The Electronic Trading System only allows the entry of firm bids:

  • Today’s Bids: They only remain through the day when they are entered, unless they are applied or withdrawn during trading.
  • Permanent Bids: They appear during an indefinite time, until they are applied, withdrawn or out of the market ranges.
  • Immediate or Cancelled Bids: When these bids are entered, the system attempts to partially or fully apply them. If partially applied, the system automatically deletes the corresponding balance. If no application is performed, the system will delete the entire bid.
  • All Or None (A.O.N.):These bids are to be entirely applied when they are entered into the system. If it cannot apply them all, the system will automatically delete them.
  • Price Fixing Over Time Bids:These bids will remain in the Bids Register until such time as they are applied, cancelled by the user or cancelled by the system because of being outside market ranges or because they have expired. The user must indicate the expiry date in the calendar included in the form.
  
 
 
SECTIONS IN GENERAL INFORMATION
About us
What we do
History
Functions and Structure
 
Market Transparency
Electronic Trading System
 
  Advantages
 

Operative Phases
  The Windows of the System
  Methods of Entering Bids
  Means of Informetion Transmission to users
Market Indicators
Annual Report
 
Fees and Commissions
Holidays
   
   
   
 
 
Copyright BVL, All Rights Reserved