1.1 This document specifies the Derivatives Exchange Trading and Membership Procedures that Derivatives Exchange Members and Derivatives Exchange Registered Traders must follow to comply with the provisions of the Derivatives Exchange Trading and Membership Rules and the procedures followed by the Exchange related to the Listed Derivatives Product (Single Stock Futures, Index Futures, and Single Stock Options).

1.2 The Exchange may waive any person’s obligations to the provisions of these procedures either based on a request from the relevant person or on its own initiative.

1.3 These procedures will enter into effect as per the Exchange’s approval resolution.

1.4 Expressions and terms in these Procedures have the meanings which they bear in the “Glossary of Defined Terms Used in the Exchange Rules”, and for the purpose of implementing these Procedures, the following expressions and terms shall have the meaning they bear as follows, unless the contrary intention appears:

• Derivatives Trading Calendar: means a calendar published in the Exchange’s website that includes available maturities and the Expiration Date of each contract.

• Expiration Date: The date on which the Listed Derivatives Product is settled in accordance with the relevant Listed Derivatives Product Specification.

• Exercise of Option Contract: means to activate the right to buy or sell the Underlying Asset specified in the Option Contract.

• Physical Delivery of Underlying Asset: means the term in Option Contracts which requires the Underlying Asset to be delivered upon the specified delivery date.

• Automatic Exercise: means the Exercise of all ITM and ATM Option Contracts automatically by the Clearing House at end of day on expiry date of an Option Contract.

• Call Option: an Option Contract which gives the right, not the obligation to the buyer of the Call Option to buy the Underlying Asset and require the seller to sell the Underlying Asset upon request by the buyer of the Call Option at the Strike Price for the duration of the Option Contract.

• Put Option: an Option Contract which gives the right, not the obligation to the buyer of the Put Option to sell the Underlying Asset and require the seller to buy the Underlying Asset upon request by the buyer of the Put Option at the Strike Price for the duration of the Option Contract.

• Deny Exercise: Long Position Holder of an Option Contract on expiry date may choose not to Exercise before end of day, and such long position shall expire without Cash Settlement of any Variation Margin.

• Strike Price: means a set price of the Underlying Asset of the Option Contract at which an Option Contract will be Exercised.

• Manual Exercise Request: means the Exercise request sent by the long Open Position Holder to the Clearing House between the creation of the long position date and expiry date of the Option Contract.

• Single Stock Futures (SSFs): means a Futures Contracts whose value is derived from the value of an underlying asset, that represents a share listed on the Exchange or on another regulated exchanges.

• Index Futures: means a Futures Contracts whose value is derived from the value of an underlying asset, that represents an index.

• Single Stock Options (SSOs): means an Option Contracts which gives the right, not the obligation to the buyer to buy or sell the Underlying Asset and requires the seller to sell or buy the Underlying Asset which represents a share listed on the Exchange upon request by the buyer of the Option Contract at the Strike Price.

• In-The-Money Options Contract (ITM): means a Call Option whose Underlying Asset price is higher to the Strike Price, and in case of a Put Option, if the Strike Price is higher to the Underlying Asset price at end of day.

• At-The-Money Options Contract (ATM): means a Call Option or a Put Option whose Underlying Asset price is equal to the Strike Price at end of day.

• Out-of-The-Money Options Contract (OTM): means a Call Option whose Underlying Asset price is lower than the Strike Price, and in case of a Put Option, if the Strike Price is lower than the Underlying Asset price at end of day.

• Option Premium: means the value of owning the Option Contract, which represent the value received by the seller of the Call or Put Option from the buyer of the Call or Put Option which represents the current market price of the Option Contract.

• Fair Value: means the price determined by the Exchange to close-out relevant SSFs or SSOs open positions.

2.1 Derivatives Exchange Members must comply with the requirements prescribed by the Exchange from time to time when accessing the Derivatives Trading System.

2.2 Derivatives Exchange Members must obtain technical Order Management System certification from the Exchange.

3.1 Futures and Options Contracts:

• 3.1.1 Product Specifications:

• 3.1.1.1 All Listed Derivatives Products Specifications will be published on the Exchange’s website.

• 3.1.1.2 Product specifications for Options Contracts shall address any specifics related to Call and Put Options, Exercise type and whether the Option Contract requires Physical Delivery or not.

3.1.2 Maturities Creation:

• 3.1.2.1 For each contract, its maturities Trading and their Expiration Date are stated in the Listed Derivatives Product Specifications.

• 3.1.2.2 The Expiration Date of available maturities will be published on the Exchange’s website under Derivatives Trading Calendar.

• 3.1.2.3 New maturities are made available on the trading day following the Expiration Date of the Current Contract.

3.1.3 Post Trade Handling of Contracts:

• 3.1.3.1 Elements related to post trade handling of contracts include but not limited to treatment of ITM, ATM and OTM Options Contracts when it comes to Automatic or Manual Exercise Request, Deny Exercise, management of Physical Delivery, settlement of Variation Margins and Option Premium as well as settlement failures are handled in accordance with Securities Clearing Centre Rules and Procedures.

4.1 Futures and Options Contracts:

4.1.1 Open: Opening of the market takes place by an auction for Futures and Options Contracts. The auction shall be based on the bids and asks entered during the Opening Auction. The market will open and uncross on a variable basis between 09:30:00am and 09:30:30am every Trading Day.

4.1.2 Intraday: Matching takes place based on price and time priority.

4.1.3 Close: Last traded price (LTP).

4.1.4 Daily Settlement Price: The Daily Settlement Price of the Futures or Options Contracts is calculated based on a methodology determined and disclosed by the Exchange in the Listed Derivatives Products Specifications on the Exchange’s website.

4.1.5 Final Settlement Price: The Final Settlement Price of the Futures or Options Contracts is calculated based on a formula determined and disclosed by the Exchange in the Listed Derivatives Products Specifications available on the Exchange’s website.

4.1.6 Tick Size: Minimum price fluctuation of the Futures or Options Contracts is determined and disclosed by the Exchange in the Listed Derivatives Products Specifications available on the Exchange’s website.

6.1 Orders must be submitted using only the following channels:

• 6.1.1 T Channel: A channel specifically designed for Derivatives Registered Traders to submit orders;

• 6.1.2 I Channel: A channel specifically designed for clients to submit orders via Derivatives Exchange Members’ websites and online applications;

• 6.1.3 A Channel: A channel specifically designed for clients to submit orders via Automated Teller Machine;

• 6.1.4 V Channel: A channel specifically designed for clients to submit orders via telephone calls;

• 6.1.5 S Channel: A channel specifically designed for clients to submit orders via the short messages system protocol (SMS);

• 6.1.6 G Channel: A channel specifically designed for the submission of automated orders based on pre-defined calculated instructions (Algorithmic Trading);

• 6.1.7 Any other channel as prescribed by the Exchange from time to time.

6.2 Except for direct orders, Derivatives Exchange Members must apply the two-factor authentication standard when using the channel prescribed in (6.1.2).

7.1 Limit Order

• 7.1.1 The Derivatives Trading System will improve the execution prices of limit orders (by reducing them for buyers or increasing them for sellers) whenever the price is better than the order’s price limit on the opposite side (higher or lower as the case maybe). In the absence of a better price on the opposite side, the order will be executed at the limit price.

• 7.1.2 The execution price improvement mentioned in (7.1.1) of these procedures is subject to the Derivatives Trading System order entry priority.

• 7.1.3 The Derivatives Trading System can execute limit orders participating in the First session at the latest Theoretical Opening Prices. Such prices might be better than the specified limit prices of relevant orders.

7.2 Market Order

• 7.2.1 During the First Session, orders can be submitted but it will not be matched.

• 7.2.2 During the Second Session, the Derivatives Trading System will execute market orders partially or fully at one price and convert the unmatched parts of partially matched market orders into limit orders at their traded prices.

• 7.2.3 Market orders participate in the Theoretical Opening Prices calculations.

• 7.2.4 The market-by-price view displays market orders. Market-by-order view will not be available during the First and Third sessions.

• 7.2.5 At the end of the Second Session, the Derivatives Trading System will cancel any outstanding day order, either unmatched or partially matched.

8.1 Orders may bear one of the following conditions:

• 8.1.1 Fill or Kill (“FoK”) means the complete order quantity must be executed as soon as it becomes available for matching; otherwise the order will be immediately cancelled, taking into consideration the following:

• 8.1.1.1 the condition is available for limit and market orders; and

• 8.1.1.2 the condition is not available during the First and Third Sessions.

8.1.2 Fill and Kill (“FaK”) means the order must be at least partially executed as soon as it becomes available for matching; otherwise the order (or the unmatched part) will be immediately cancelled, taking into consideration the following:

• 8.1.2.1 the condition is available for limit and market orders; and

• 8.1.2.2 the condition is not available during the First and Third Sessions.

8.1.3 Hidden Quantity means the order will disclose a portion of its quantity. Each time the disclosed portion is fully matched, the order will disclose an equal portion of its quantity, taking into consideration the following:

• 8.1.3.1 the full quantity of the Hidden Order participates in the Theoretical Opening Prices calculations; and

• 8.1.3.2 the condition is available for limit orders.

8.1.4 Cancel on Disconnect means the order will be cancelled automatically (in case of Market Orders and Limit Orders) upon any network disconnection during the Trading Day between the Derivatives Exchange Member and the Trading System.

9.1 The Derivatives Trading System determines order validity according to when orders enter the Derivatives Trading System, as follows:

• 9.1.1 The First Session: means that orders are subject to full execution at the end of the First Session, and they should be transmitted during the First Session of the same day.

• 9.1.2 Day: means that orders are subject to full execution until the end of the Second Session.

• 9.1.3 Good till Cancelled (“GTC”): means that orders are subject to full execution with a validity period of up to (30) days from the transmission of the order.

• 9.1.4 Good till Date (“GTD”): means that orders are subject to full execution until a specified date. The date can be set up to a maximum of (30) days from the transmission of the order.

10.1 Derivatives Exchange Members must ensure that orders transmitted to the Derivatives Trading System meet the following requirements:

• 10.1.1 Tick size: The price is a multiple of the applicable tick size (defined in section (4) of these procedures).

• 10.1.2 Fluctuation limit: The price of the order meets the daily fluctuation limit as specified in the relevant Listed Derivatives Product Specification.

• 10.1.3 Orders must follow any additional requirements published by the Exchange from time to time.