Bahrain Bourse (BHB) Material: Contents

Bahrain Bourse (BHB) Material
BHB Guarantee Contribution Fund Resolution
Article (11) Trading Cap Limits
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Article (11) Trading Cap Limits

11.1 The BSE shall set a cap on the multilateral net debit position of each Participant, to be calculated in accordance with the following formula:

Cap Limit = Collateral + (Capital x Risk Factor)
(Number of Settlement Days + Reserve Settlement Days) X Maximum Risk
11.2 The 'Risk Factor' referred to in sub-Article (11.1) above shall be 1/3, 'Settlement Days' shall be 3 working days, 'Reserve Settlement Days' shall be 3 working days, and the 'Maximum Risk' shall be 10% per day.
11.3 The BSE may increase or decrease the Participant's Trading Cap Limit, or ask the Participant to pay the trading amount allowed over and above the Trading Cap Limit subject to this Article in full, in accordance with the prescribed procedure. In taking the above action, the BSE shall give special consideration to the relevant factors, i.e. the Participant's frequency and volume of his trading activities, his financial position, solvency, ability to increase his contribution to the Guarantee Fund, his past experience in the settlement of transactions executed under Article (20) hereof, the client's financial position, liquidity of securities and volume of the transactions intended to be executed.
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