Borsa Istanbul has introduced amendments to the Equity Market Procedure (“Procedure”) concerning the trading principles of the investment institution warrants traded in the Borsa Istanbul Structured Products and Fund Market, which will enter into force on April 10^th, 2023.

With respect to the characteristic of the warrants, which requires a high level of market knowledge and experience, Borsa Istanbul has noticed that erroneous transactions can be made by the investors while trading the warrants and accordingly taken further precautions to prevent such transactions through tightening the market rules and restraining suspicious activities. The amendments brought to the Procedure are presented in the below sections.

1. New Session Period Introduced

Pursuant to the Procedure, warrant transactions are executed by means of the continuous trading method where the market maker will provide trading quotation on a continuous basis during the trading session which is between 10.00 a.m. – 18.00 p.m.

Pursuant to the amendments on the trading principles, a new session period (P_SALTKOTASYON) prior to the continuous trading for warrants is introduced. Within this scope, only the market maker will be allowed to provide quotation between 10.00 – 10.02 a.m. During this new session; there will be no order submission and order matching other than the quotation order of the market maker. Accordingly, an ordinary full-day continuous trading session shall be as below:

2. Principles Regarding Order Placement and Order Types Amended

Until April 10th, 2023, all order types which are effective (during the sections of the session in which they are traded) can be used for the warrants. However, pursuant to the amendments, it is not possible to submit market and market-to-limit order types for the trading of warrants. Accordingly, investors will not be able to submit orders through only specifying the quantity.

Further to this, Borsa Istanbul introduced upper limits with regards to the price of the warrants and the total order value/quotation. Accordingly, the price limit per each order only for the trading of the warrants will be 50 (fifty) Turkish Lira, and the maximum order value will be 250,000 (two hundred fifty thousand) Turkish Lira. Throughout such measures, Borsa Istanbul is aiming to prevent possible orders with significantly higher prices than the actual value of the relevant warrant.

3. Assessment Criteria Regarding Warrant Trading Cancellation Revised

Assessment criteria for the warrant trade cancellation requests to the Equity Market Operation Directorate with regards to the material errors are revised. Previously, general rules were applicable to the trade cancellation of warrants, however, as per the amendment of the relevant provision of the Procedure, below the rules shall enter into force as of April 10^th, 2023:

• Application Period for Erroneous Trade Cancellation and Acceptable Price Levels

Pursuant to the recent amendments, trade cancellation application can be made within 30 minutes as of the realization of the erroneous transaction, and if the remaining time to the end of the session is less than 30 minutes, an erroneous trade cancellation application can be made within 10 minutes after the realization of the erroneous transaction. Within this scope, period for the cancellation application is extended specific to warrants comparing to the general provisions of the Procedure.

In order for a trade cancellation request to be evaluated by the Equity Market Operation Directorate, the minimum deviation of the transaction price from the reference price is determined as below and the prices outside the price ranges to be calculated over the reference price with the rates specified in the table may be subject to an erroneous transaction cancellation request.

• Reference Price for the Trade Cancellation

The “reference price for trade cancellation” shall be used regarding the assessment of whether the transaction subject to the cancellation request meets the price criteria and the calculation of the total value of erroneous transactions. The reference price for trade cancellation shall be calculated based on below the circumstances:

• • The reference price for trade cancellation shall either be the average of the prices of the market maker quotes at the time of the execution of the transactions of which cancellation is requested is taken as the reference price or if quote is one sided, price of the quote shall be taken as the reference price.
  • In the event that there is no market maker quotation or the cancellation request is made due to an incorrect quote price, the last correct quote entered or the last transaction price before the cancellation of the transactions shall be accepted as the reference price.
  • In case there is no price before the transaction requested to be canceled or the final price does not reflect the true price of the instrument, the reference price shall be determined by the Equity Market Operation Directorate considering the best bid – offer prices, the previous closing price, the intrinsic value (the exercise price – the underlying price), the price change of the underlying asset and the opinion of the market maker.

• Minimum Traded Value

In order for a trade cancellation request to be taken into consideration, the value of the transaction subject to cancellation request should at least be 20.000 Turkish Lira. The total traded value shall be calculated over the total value of the transactions realized by the same intermediary institution and/or customer account number in a single order and/or at once.