Regulatory Alerts2018-06-28
Obligation to Execute Client Orders at the Best Market Conditions
The Commission for the Organization and Supervision of Stock Exchange Operations (COSOB) issued this directive on June 28, 2018, to enforce Article 43 of Regulation COSOB No. 15-01 regarding the execution of client orders at the best market conditions. The document mandates that Intermediaries in Stock Exchange Operations (IOBs) must modify their orders to execute client limit orders at the best possible price when acting as the sole counterparty, while establishing priority rules and chronological re-submission protocols when other IOBs hold conflicting orders. Strict compliance with these provisions is required from all IOBs and public prosecutors, supported by an extended order entry period managed by the Stock Exchange Clearing and Settlement Company (SGBV).
Commission for the Organization and Supervision of Stock Exchange Operations 17, Campagne CHKIKEN.16043. Val d'HYDRA - Algiers. Tel: 023 47 27 93/47 28 03 Fax: 023 47 28 00/47 28 04
The Algerian Democratic and Popular Republic
COSOB The President Algiers, June 28, 2018
Reference texts: - Art. 43 of COSOB Regulation No. 15-01 relating to IOBs
- Minutes of the negotiation committee meeting of April 8, 2017
Joint Note to IOBs and Public Prosecutors SUBJECT: Obligation to execute client orders at the best market conditions.
With a view to ensuring the effective application of the provisions of "Article 43 of COSOB Regulation No. 15-01 of April 18, 2015 relating to the conditions for approval, obligations and supervision of Intermediaries in Stock Exchange Operations (IOBs)," which concerns the obligation to execute client orders at the best market conditions, COSOB takes the following measures:
1- During trading sessions, in the event that the IOB is the sole counterparty on the market and when the client's limit buy or sell order can be executed in full at more favorable price conditions, the IOB must modify its order to execute it at the best possible price.
2- In the event that one or more other orders concerning the same security and in the same direction are subsequently entered, this IOB benefits from execution priority. To this end, it may modify the price of its order when the orders entered by other IOBs concern a higher price (in the case of buy orders) or a lower price (in the case of sell orders), up to even introducing it at the limit price indicated by the client.
3- In the event that the price of the order modified by this IOB is equal to the price of the orders entered by other IOBs, the latter must cancel their orders and re-enter them, respecting the initial chronological order.
4- The SGBV, with the supervisor's agreement, extends the order entry period to handle these scenarios.
5- IOBs and public prosecutors must strictly respect the provisions provided for in this note.
Commission for the Organization and Supervision of Stock Exchange Operations