Directive 5: Swiss Block

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Directive 5: Swiss Block

of 22/02/2010

Effective from:

01/04/2010

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Content

1. Purpose and principle ... 1

2. Swiss Block ... 1 3. Admission ... 1 4. Trading ... 1 4.1 Trading hours ... 1 4.2 Order ... 1 4.3 Market model ... 2 4.4 Market conduct ... 2 4.5 Trade suspension ... 2

4.6 Price step and round lot ... 2

4.7 Report of trades and publication ... 2

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1. Purpose and principle

This Directive contains provisions on the electronic trading platform Swiss Block and is based on Clause 11.2 Rule Book.

2. Swiss Block

Swiss Block is an electronic trading platform for trading shares without pre-trade transparency.

3. Admission

1_{A participant wishing to trade in Swiss Block ("Swiss Block Participant") must:}

a) be a participant of the Exchange;

b) conclude a connection agreement with the Exchange; and c) meet the necessary technical requirements.

2_{The application form for admission to Swiss Block can be obtained from the Exchange and}

is available on the website of the Exchange.

4. Trading

4.1 Trading hours

Trading on Swiss Block shall be open during the exchange period "continuous trading" of the market segment of the relevant share ("domestic market").

4.2 Order

An order must be recorded with the following attributes: a) Swiss Block participant ID: Member ID;

b) Identification of the share: share-specific trading symbol; c) Quantity:

1. number of shares to be traded without statement of the minimally executable number; or 2. number of shares to be traded with statement of the minimally executable number; d) Designation of the type of business: purchase or sale;

e) Trading capacity: client transaction (trade in own name but on own account of the client) or own transaction (transaction in own name and on own account);

f) Price limit: 1. unlimited; 2. limited; or

3. limited by pegging to the mean value of the currently placed best purchase and sales price of the share in the domestic market ("Midpoint Price"). A pegged order may be assigned a price limit collar. If the Midpoint Price is outside the price limit collar, the order is tem-porarily suspended (until the Midpoint Price is back inside the corridor);

g) Spread: Information whether the order is to be executed if the spread in the domestic market falls short of or exceeds a certain value;

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h) Validity:

1. Immediate-or-cancel order (IOC order or accept order): shall be executed immediately, in full or inasmuch possible. Non-executed parts shall be deleted without entry in the or-derbook;

2. Fill-or-kill order (FOK order): shall be executed immediately and in full or not at all. If an immediate, full execution is not possible, the FOK order shall be deleted without entry in the orderbook;

3. Good-for-day order: is valid until the end of the current trading day;

4. Good-till-time order: shall be valid until a certain time but no longer than until the end of the trading day.

4.3 Market model

1_{There shall be no pre-trading transparency, this means that the orderbook and the orders in}

it cannot be viewed by the market.

2_{Orders shall be executed taking into account the principle of the participant/volume/time/}

priority principle at the Midpoint Price.

3_{The participant/volume/time priority principle means:}

a) an incoming order shall be executed first with orders of the same Swiss Block Participant (participant priority);

b) an incoming order shall be executed with the largest order. For partially executed orders, the original order volume shall decide on the sequence of execution (volume priority); c) for orders of the same size, the temporary receipt shall decide on the sequence of execution

(time priority). 4.4 Market conduct

The market conduct provisions of Clause 9.2 Rule Book shall apply. In particular, the Swiss Block Participant shall ensure the necessary precautions to prevent impermissible cross-trans-actions.

4.5 Trade suspension

Trade shall be interrupted if and for as long as

a) no Midpoint Price of the relevant share can be calculated on the domestic market; or b) trade in the relevant share is interrupted or suspended on the domestic market. 4.6 Price step and round lot

1_{The valid price step shall be 0.0001 of the respective trading currency regardless of market}

price.

2_{The valid round lot shall be one share.}

4.7 Report of trades and publication

1_{Trades on Swiss Block shall be deemed to be an on-exchange, off-order-book trade in}

ac-cordance with Clause 9.1 para. 3 Rule Book and as reported in the sense of the Stock Exchange Act (SESTA) and the Stock Exchange Ordinance FINMA (SESTO-FINMA).

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5. Clearing and settlement

1_{Trades shall be cleared and settled via a central counterparty. The provisions of Clause 15 Rule}

Book shall apply.

2_{The counterparty shall remain anonymous.}

Resolution of the Management Committee of the Exchange of 22 February 2010; in effect since 1 April 2010.