Trading and Operations
Trading and Operations
Trading Market Structure
Trading System
All trading activity on ESX listed securities occurs via ESX’s Automated Trading System (ATS). ESX adopts a hybrid market that provides both a central limit order book as well as platforms for bilateral and multilateral negotiated trading in the form of Requests for Quotes (RFQs). ESX’s central limit order book allows trading members and their clients to enter buy and sell orders anonymously where customer trades are executed using ESXs’ modern trading engine based on a transparent price-time priority mechanism of trade matching. The ATS seamlessly integrates with the CSD that ensures efficient clearing and settlement.
Trading Operations
- Market Opening: Trading on ESX begins with an opening auction. During this phase, buy and sell orders are matched, and the opening price for each security is determined.
- Order Placement: Investors place buy and sell orders with their brokerage firms or directly via direct market access facilities. Among others, orders can be market orders (executed at the prevailing market price) or limit orders (executed only at a specified price or better).
- Order Matching: ESX uses electronic trading systems to match buy and sell orders. Orders are executed based on a price-time priority, meaning the first order at a specific price gets priority.
- Continuous Trading: Once the market opens, continuous trading takes place, with buy and sell orders executed throughout the trading day. Prices fluctuate based on supply and demand.
- Market Surveillance: ESX utilizes various surveillance mechanisms to monitor trading activity and detect unusual or suspicious behavior. This helps maintain market integrity and prevent market manipulation.
- Trading Halts: Trading may be halted under certain conditions, such as extreme volatility, technical issues, or significant news events. Halts are designed to maintain order and stability in the market
- Clearing and Settlement: After trades are executed, the Central Securities Depository, ensures that trades are settled by transferring securities and funds between buyers and sellers.
- Post-Trade Reporting: The exchange reports executed trades and trade data to participants and the public. This data includes the trade price, volume, and other relevant details.
Trading Calendar
The ESX shall open for trading on all business days in Ethiopia. Trading shall be conducted at specified times as may be determined by the ESX. ESX may extend, advance, or reduce trading hours by notifying Trading Members as may be necessary. Unless otherwise specified by the Board of Directors of the ESX, the exchange shall be open for trading from 9:00 to 3:00 EAT, as follows:
| Session | Time | Price Limit |
|---|---|---|
| Pre-open | 9:00 AM – 9:30 AM | – |
| Continuous | 9:30 AM – 3:00 PM | – |
| Close | 3:00 PM | – |
Public Holidays / Closing Days (2024 -2025)
| Date | Holiday |
|---|---|
| Tuesday, Jan 7 | Ethiopian Christmas / Gena |
| Sunday, Jan 19 | Epiphany/Timket |
| Sunday, Mar 2 | Adwa Victory Day |
| Sunday, Mar 8 | International Women’s day |
| Monday, Mar 31 | Eid al-Fitr (Tentative Date) |
| Friday, Apr 18 | Ethiopian Good Friday |
| Sunday, Apr 20 | Ethiopian Easter/Fasika |
| Thursday, May 1 | International Labor Day |
| Monday, May 5 | Patriots’ Victory Day |
| Wednesday, May 28 | Derg Downfall Day |
| Saturday, Jun 7 | Eid al-Adha (Tentative Date) |
| Friday, Sep 5 | The Prophet’s Birthday |
| Saturday, Sep 11 | Ethiopian New Year |
| Thursday, Sep 27 | Meskel (Finding of the True Cross) |
Trading rules
- Unless otherwise stipulated at the time of a transaction, all shares securities dealt in by a Trading Member shall be deemed to be fully paid and funded
- All transactions entered into by Trading Members shall be for net prices as between the buyer and seller.
- The Exchange shall not recognize in its dealings any parties other than its own Trading Members and every interaction therefore, whether for the Trading Member or on behalf of a client, must be according to the Rules, regulations and usages of The Exchange.
- The Exchange shall determine the mode of trading, platforms and systems from time to time. No Trading Member shall put through a transaction on The Exchange other than the form prescribed by The Exchange.
- The Exchange shall from time to time specify various trading parameters and attributes relating to the Trading System, including but not limited to the following:
I. Lot Sizes: The size of a lot shall be one share; and
II. Display of Quotes and Orders: ESX shall display as publicly available such details of Orders in tradable securities submitted to the trading system in a format it shall determine from time to time.
Procedures and manuals
The Ethiopian Securities Exchange (“ESX”) is Ethiopia’s first, and only organized securities exchange. ESX is established as a public private partnership inline with Article 31 of the Capital Market Proclamation (No.1248/2021), and is licensed by the Ethiopian Capital Market Authority (ECMA).