SPAD (System for Support of the Share and Bond Markets)

SPAD trading is based on the activities of market makers who are responsible for providing enough liquidity on the market.

A market maker is an Exchange member who has concluded a contract with the Exchange to act as the market maker for selected issues of share titles. The number of market makers per issue or the number of issues per market maker are unlimited.

SPAD trading is carried out in two phases: (see the Trading hours).

• open
• closed

SPAD Open Phase

Trading in this phase is based on the obligation of the individual market makers to continually quote purchase and sale prices of the issues for which they act as market makers.

If a quote of one of the market makers is part of a so-called best quotation, the market maker is obliged to complete the transaction immediately, if the counterpart reacts to the quotation by issuing an order.

At a given moment, the best quotation is the band designated by the best purchase and sale price. Such prices are selected from the individual prices quoted by the market makers.

A transaction can be completed only within the allowable spread, defined by the best quotation increased by 0.5% in each direction.

If the arithmetic midpoint of the allowable spread deviates by more than 20% from the arithmetic midpoint defined upon commencement of the open phase and does not return to within the spread within 2 minutes from the point of crossing over, a 15 minute break will be announced. During the break, transactions of the issue in question cannot be concluded in SPAD. If at least three market makers apply for quotation during the break, the allowable spread will be extended by another 10% after the break, up to the maximum defined limited of ± 50%. A break will be announced every time the next 10% spread level is exceeded.

In SPAD trading, the counterpart for a transaction may be:

• a market maker under standard conditions where at a given moment the price is the best one on the market, the requested volume corresponds to the standard volume of the issue and the deadline for transaction settlement is T+3 (day T is the day of concluding the transaction). If any of the Exchange members reacts to the best quotation, the market maker is obliged to conclude the transaction with such member immediately (within 10 seconds).
• a market maker under other conditions where the market maker is not obliged to react, the transactions are realized with the settlement deadline of T+1 to T+15, the required volume is different from the standard volume, and unless the transaction is confirmed, the instruction expires within 5 minutes.
• another trader where such a transaction may be agreed upon either directly while using the Exchange system, by e-mail or telephone in the agreed volume and price, corresponding to the allowable spread. The settlement deadline is realized between T+1 and T+15.

The final price for issues traded in SPAD is set within te closing auction.

SPAD Closed Phase

During this phase, market makers may neither issue quotations nor conclude transactions. Transactions may be concluded within the allowable spread, which is for the entire period of this phase defined by the best quotation valid as at the end time of the open phase, increased by 10% in each direction.
Transactions concluded in SPAD are Exchange transactions subject to guarantees of the Guarantee Fund of the Exchange.
Settlement of such transactions is realized in the deadline of T+1 to T+15.

Issues included in SPAD trading cannot be used to conclude block transactions, with the exception of so-called over-limit transactions, the volume of which exceeds the limit defined by the Exchange – approximately CZK 150 million – and block transactions, in which the counterpart is not an Exchange member.

Detailed information:

• Rules for SPAD trading (spad_tra.pdf)
• Rules for issuing a market maker license (spad_mm.pdf)
• Trading hours
• Trading parameters (trading_parameters.pdf)
• On-line Trading Results

Market makers quoting issues included into SPAD

Last change 5/28/2010

Parameters of issues in SPAD

Last change 9/3/2010

Temporary changes in parameters reserved.