Trading System of Bahrain

In 1999, the BSE installed the Automated Trading System (ATS) to carry out all the exchange’s transactions. The Automated Trading System at the BSE is one of the most advanced trading systems used in capital markets worldwide. Such system ensures accuracy, speed, and fairness in executing transactions providing greater flexibility to operate several markets at once and list various instruments. The mechanism of the ATS can be controlled according to the rules and regulations of the BSE.

Before launching the automated trading system at the BSE, trading was done manually known as “written bidding” system. Using this system, the broker had to write the bid and offer orders that they receive from the investor on the trading boards at the trading floor. The transaction takes place when the prices of the bid and offer match.

Markets supported by the Automated Trading System
The automated trading system installed in 1999 supports 5 markets:

# The Regular Market.
# The IPOs Market: The market in which shares of a company are traded for the first time following its listing on the exchange.
# The Special Orders Market (Min. BD 500,000).
# Bonds Market: This market is specialized for the trading in bonds and Islamic Sukuk.
# Mutual funds market: This market is specialized for the trading in mutual funds.


Trading Mechanisms
During the pre-opening period (9.15a.m.-9.30a.m.), brokers input the bids and offers they receive from investors into the system until they match. The mechanism for which the price of equities is determined is as follows:

# The best price (price priority): The transaction is executed for the best price.


# Type of order:If an order is conditional, precedence of execution is given to orders that are un-conditional. For example, if there are two orders with the same price, the system will give precedence to the un-conditional order.

# Source of order: The sources of order are given precedence of execution as follows:

- Priority 1: client’s order, foreign investor’s order, market control’s order

- Priority 2: mutual fund’s order, the issuing company’s order, specialist’s order

- Priority 3: insider’s order

# Time of order priority: In case the price and type are the same, precedence is given to the orders entered into the system first.

# Cross priority: Cross priority is implemented if the one with the priority is on the active side. Trading in cross priority takes precedence over other house, then against the same house order.

# Random factor priority: In case two orders are received in the same time, precedence is given to the random factor.

Trading Session
The trading session is from 9.30a.m. to 12.30 noon, from Sundays to Thursdays excluding the official holidays.

Price Fluctuations
During one trading session, the price fluctuation is fixed to a maximum of 10% either way from the last closing. i.e. If the closing price of a company was 500 fils the previous day, the maximum price it can reach the next day is 550 fils and the minimum is 450 fils.


Bidding Units
The change is calculated by one fils and its multiples regardless of the price share. If the trading is in US dollars, the change is calculated according to the below schedule:
Share’s Price Unit Price
0 – 50 cents 0.005 cents
51 cents and above 0.01 cent

The Exchange’s and Brokers’ Commission
The Brokers’ Commission is 0.275% i.e. 0.00275 of the total value calculated based on the total value of buy and sell transactions for each investor and issue within the same trading session with a minimum amount of BD3. The Exchange calculates its commission at the rate of 20% of the brokers’ total commission.

Bonds and Islamic Sukuk

Value of Transaction (Bahraini Dinar)* Commission
Minimum one Dinar 0.0005
* US$ 1 = BD 0.377