TRADING REGULATION AT HO CHI MINH STOCK EXCHANGE

1. Trading hours

a) For common shares and investment fund units:

Time Market phase

From 8:30 to 9:00 Pre -open (Call market matching)

From 9:00 to 10:15 Market open (Continuous matching)

From 10:15 to 10:30 Pre-Close (Call market matching)

From 10:30 to 11:00 PT deal

11.00 Market close

b) For bonds:
From 8:30 to 11:00: PT deal

2. Trading method

HOSE organises securities trading through 2 trading methods:

a) Automated order matching method:

Automated order matching method performs the order matching process according to
price-then-time priority, including: Call market matching and Continuous order
matching.

a1) Call market matching: is the trading method utilised in calculating the opening
and the closing price of securities at the opening and closing time of the trading hours.
The valid orders during pre-open or pre-close period will be queued for matching at
the single price which:

• Price that generates the greatest trading volume.

• If there is more than one price, the price that is closest to the last
execution price will be chosen.
a2) Continuous order matching: is the trading method which matches the orders
against each other immediately when orders arrive to the market.
After market opens, all bid and ask orders routed to the HOSE’s trading system are
kept in the queue, still based on price then time priority. The highest buying price is
the best bid, while the lowest selling price is placed as the best ask. At the same time,
if the bid or ask orders in the first queue can be matched, the trading system will
automatically execute the transaction.
 b) Negotiation (Put-through) method: is the trading method which members negotiate
with each other about the deal which will then be sent to the trading system for record
purpose.

Common shares and investment fund units are traded through both automated order
matching method and negotiation methods.

Bonds are only allowed to trade through negotiation method.

3. Orders matching principles

HOSE’s trading system performs orders matching based on price-then-time priority as

follows:

a) Price priority:

- Bid orders at higher price will be matched first.

- Ask orders at lower price will be matched first.

b) Time priority:

- If bid orders or ask orders have the same price level, which one is sent to the
trading system first will be matched first.

4. Price unit, trading lots and spread in the trading system

a) 1 unit of price is 1,000 VND and can be displayed with 1 decimal number.

E.g. If share price is 15,500 VND, it will be displayed in the trading

system as 15.5.

b) Trading lots and spread are currently specified as follows:

- For common shares and investment fund units:

(1) Trading lot:

(a) Big lot: equal or over 20,000 stocks or units (Negotiation method)

(b) Main lot: multiple of 10 stocks or units and less than 20,000 (Orders
matching method)

(c) Odd lot: less than 10 stocks or units.

Odd lot is not allowed for trading through HOSE’s trading system.

(2) Spread:

ƒ For order matching:

Market price level (price unit = 1.000 VND) Spread

 Lower than 50 0.1
From 50 but lower 100 0.5
From 100 up 1
ƒ For PT deal:
There is no regulation on spread or price unit for Negotiation method.

- For bonds, there is no regulation on trading lot and spread.

5. Daily price limit

a) Daily price limit is applied to both automated order matching and put-through
methods.

b) Daily price limit is not applied to bonds.

c) Price limit of stocks and investment fund units is determined as follows:

Ceiling price = Reference price + (Reference price x daily price limit)

Floor price = Reference price - (Reference price x daily price limit)

(The current Price limit is 5%)

d) The ceiling price will be round down to the closest spread.

e) The floor price will be round up to the closest spread.

f) The above rule of daily price limit shall not be applied in the following circumstances:

- The first trading day of common shares, investment fund units;

- Stocks, investment fund units on the first trading day after being suspended for
more than 30 days;

- Other circumstances as HOSE’s decision.

6. Reference price

a) Reference price of listed stocks and investment fund units is the closing price of the
previous trading day. The closing price of the securities is determined as the matched
price during the pre-close session. If during this session, there is no matched price, the
closing price is deemed as the last sale price of the securities during the trading day.

b) In the circumstance that securities are traded again after being suspended for over 30
days, reference price is determined as new list case.

c) In the circumstance that securities goes to ex-dividend or ex-right, reference price on

ex-dividend or ex-right day is determined by adjusting the closing price of the
previous trading day with the dividend or right value.

d) In the circumstance of stock split, reference price is determined by adjusting the

closing price of the previous trading session with the split ratio.
7. Determine reference price, price for new list securities

a) The determination for new list securities’ price on the first trading session is as
following:

- The listed company or the advisory company propose an initial price for new list
securities in the first trading day.

- The Prices’ fluctuation limit is +/- 20% of the initial price.

- If the is no trade over 3 trading days, listed company have to propose another
initial price.

b) The last sale price in the first trading day is the reference price for next trading day
when daily price limit is applied.

c) Put-through method is not allowed for the first trading day.

d) This rule is not applied to new listed bond.

8. Order

a) Limit order

- Is a bid or ask order at a specified price. The limit order will be matched at the
specified price or better.

- Limit order stays effective from the time it is sent to trading system until the end
of trading day or being cancelled.

b) Market order

- It shall be deemed as the bid at the lowest price or offer at the highest price on the
board, as the case may be;

- If an amount of securities of such bid or offer still remains after the trading as
previous rule, it shall be deemed as the bid at the higher price and the offer at the
lower price according to the succession shown on the board, as the case may be ;

- If an amount of securities of such bid or offer still remains after the trading as
previous rule and is no longer able to be traded, it shall be deemed as the bid at the
higher price than the last trading price at one spread, or as the offer at the lower
price than the last trading price at one spread, as the case may be;

- If the last executed price is the ceiling price for bid market order or is the floor
price for ask market order, market order will become a bid limit order at ceiling
and an ask limit order at floor.
 - While there is no bid or offer made by specifying the fixed price on the board, a
member may not send bid or offer at the market price.

- Market order is sent during the market open period.

c) At the open order (ATO):

- Is a bid order or ask order at the opening price.

- ATO order shall be the first priority order.

- ATO order is sent to the trading system during pre-open period. If trading
according to the ATO bid or offer under this Clause cannot be carried out when
daily trading is opened, such bid or offer shall be auto-cancelled.

d) At the close order ( ATC)

- Is a bid order or ask order at the opening price.

- ATC order shall be the first priority order.

- ATC order is sent to the trading system during pre-open period. If trading
according to the ATC bid or offer under this Clause cannot be carried out when
daily trading is closed, such bid or offer shall be auto-cancelled.

9. Order content

a) Limit order shall have at least the following particulars:

- Buy order or sell order (B/S);

- Securities code;

- Quantities of securities;

- Bid or ask price;

- Investor Account code;

- Member firm code;

- Authorised officer’s identification number;

- PC Flag (P,C,F or M).

b) ATO order has the same content as limit order but price is ATO.

c) ATC order has the same content as limit order but price is ATC.

d) Market order has the same content as limit order but price is MP.
10. PC Flag

PC Flag are as follows:

Type of clients PC Flag

Investment for member’s account P
Domestic investor with depository a/c at member C
Foreign investor with depository a/c at member, F
domestic or foreign custodians; foreign custodian self-
trading
Domestic investor with deposit a/c at domestic or M
foreign custodian; Domestic custodian self-trading

11. The investor’s account code rules

Account code must contain 10 characters and must not be blank.

a) For investor opening trading account and depository account at member firm:

- The first three characters is broker’s member code.

- The 4th character and PC flag are as follows:

Transaction Account code PCflag

Investment for member’s xxxPxxxxxx P

account

Domestic customer’s xxxCxxxxxx C

account

Foreign customer’s xxxFxxxxxx F

account

b) For Investor opening trading account at broker firm and depository account at
Custodian member which are Domestic Bank, Foreign Bank or Joint venture Bank:

- The first three characters is Custodian member code.

- The 4th character and PC flag are as follows:

Transaction Account code PC Flag

Investment for domestic xxxAxxxxxx M

bank’s account

Domestic customers of xxxBxxxxxx M

Domestic Bank, Foreign
 Bank, Joint venture Bank

Foreign customers of xxxFxxxxxx F

Domestic Bank, Foreign
Bank, Joint venture Bank

Investment for Foreign xxxExxxxxx F

Bank or Joint venture
Bank’s account

12. Order cancelling in automated order matching method

a) During Call market matching period:

- Cancelling order which is sent to the trading system during the same Call market
matching phase is prohibited. HOSE only allows cancelling outstanding order or
the remaining volume of order which is sent during the previous Call market
matching phase or during Continuous order matching phase.

- Upon HOSE approval, Broker’s authorised trader is allowed to edit order if order
is input incorrectly after he/she shows original order to HOSE for checking.
Editing order only can be executed if the incorrect order is not matched yet or the
remaining volume of incorrect order still queue. The editing must base on the
Order Editing procedure issued by HOSE.

b) During continuous order matching phase, if customer requests or order is input

incorrectly, member’s authorized trader is permitted to edit or cancel order, including
order which is placed during previous Call market matching phase, if order or the
remaining volume of order is not matched.

c) In the case of editing account code, the time priority is still effect.

d) In circumstance of editing other information of order, the time priority will be effect
at the time correct order is sent.

13. Put-through advertisement

a) During Put through phase, member’s authorized trader is allowed to send

advertisement for buying or selling securities through Put-through method.

b) The advertisement’s content includes:

- Buying side or selling side;

- Securities code;

- Price
 - Quantity;

- Board;

- Telephone number.

14. Put-through deal

a) During Negotiation phrase, common shares, investment fund units are traded with big
lot.

b) Daily price’s fluctuation limit is applied for trading common shares, investment fund
units with Put-through method.

c) Put-through deal is input to trading system by buyer and seller according to Put-
through Procedure issued by HOSE.

d) Put-through transaction procedure:

- For one-firm trade (Both buyer and seller are from one member firm): Trader keys
in PT deal into the trading system with following information:

(1) Securities code;

(2) Price;
(3) Volume;
(4) Board;
(5) Selling Member ID and Trader ID
(6) Seller’s account code;
(7) PC Flag.
(8) Buying Member ID and Trader ID
(9) Buyer’s account code;
(10) PC Flag.
- For two-firm trade (Buyer and seller’s trading accounts are from two member
firms):

Seller inputs the following information and sends to buyer for approval:

(1) Securities code;

(2) Price;
(3) Volume;
(4) Board;
(5) Selling Member ID and Trader ID
(6) Seller ‘s account code;
(7) PC Flag.
(8) Buying Member ID and Trader ID
- After received information from seller, if buyer approve, buyer input the
following information:
(1) Buyer’s account code;
 (2) PC Flag.

15. Edit and cancelation of Put-through deal

a) Cancelling of Put-through deal is prohibited.

b) In the case of member’s authorized trader input put-through deal incorrectly, he/she is
allowed to edit the deal after showing following documents for HOSE: original order,
approval of counter party for editing the incorrect deal and he/she must get the
HOSE’s approval for editing. Editing Put-through deal must comply with Put-through
editing procedure issued by HOSE.

c) Editing Put-through procedure:

- For one-firm trade (Both buyer and seller are from one member firm):

If there is any mistake in recorded Put through deal information, member firm has
to present provable documents to HOSE. With HOSE permission, member firm
cancels recorded Put through deal and must key-in the correct Put through deal
after that.

- For two-firm trade (Buyer and seller’s trading accounts are from two member
firms):

If there is any mistake in recorded Put through deal information, both member
firms have to agree to edit that deal. Then, member firms have to present provable
documents to HOSE. With HOSE permission, member firms cancel recorded Put
through deal and must key-in the correct Put through deal after that.

16. Foreign investors’ trading control

a) The trading system control and display a remaining volume of common shares,
investment fund units which foreign investors can buy (current room) as following
rules:

- During automated order matching phases:

(1) The current room is decreased immediately after the bid order of foreign
investor is executed. If the offer order of foreign investors is matched, the
current room is only increased after the settlement day (T+3).

(2) A outstanding foreign bid order or a remaining volume of foreign bid order
will be cancelled automatically if current room of that share/ unit gets smaller
than main lot (smaller than 10). A foreign bid orders which are sent to
HOSE’s trading system after that will be rejected.

- During Put-through phase:

 (1) Current room is reduced immediately after a Put-through deal if the buyer is
foreign investor and seller is domestic investor.

(2) Current room will increase after the settlement day if the put-through deal is
between domestic buyer and foreign seller.

(3) Current room is remained the same if both buyer and seller are foreign
investor.

17. Investor trading

a) Investor must only have one trading account and only open at one securities company.
Investors’ trading account must comply with Account code rule issued by HOSE.
Members have duty to keep trading documents, clients’ trading records, and
information of accounts, date of open and closing trading accounts.

b) Investor is not allowed to buy and sell the same securities on the same trading day.

c) Member firms have to make sure that each order to be sent to the trading system of
the Exchange must satisfy the deposit requirements by the current rule and regulation
(having 100% cash or securities enough in their balance).

18. Ex-right symbol

On ex-right date, HOSE shall display the following symbol on the trading system:

a) “XR”: Excluding right for buying additional stocks, investment units.

b) “XD”: Excluding dividend from owning stocks, investment fund units.

c) “XA”: Excluding dividend and right on the same trading day.

d) “XI”: Excluding interest on bonds.

19. Listed securities control

a) If securities is in compliance according to HOSE Listing Regulation, HOSE shall

mark a “C” symbol on that securities.

b) If securities is no longer in compliance according to HOSE Listing Regulation, HOSE

shall unmark a “C” symbol on that securities.

20. Halt and suspend securities

a) HOSE may suspend securities from trading according to HOSE Listing/Surveillance

Regulation.

b) If the securities are suspended not more than one trading day, the symbol is “H”.

c) If the securities are suspended not more than one trading day, the symbol is “SP”.
 d) Suspended securities shall be allowed to trade again according to HOSE
Listing/Surveillance Regulation.

21. Deal generating and cancelling

a) A deal is generated when the trading system matches bid and ask order through
automated order matching or recording put-through deal, except other circumstance
which is prescribed by HOSE.

b) In case that a deal affects significantly investors’ interest or the market, HOSE may
decide to amend or nullifying deal record.

c) In case that HOSE halts trading due to crisis, HOSE will make a decision to accept or
nullifying trading records.

22. Treasury share trading

a) In each trading day, listed company is permitted to buy or sell treasury share for at
least 3% and as much at 5% of volume which registered with HOSE. Listed company
shall not trade treasury share over 5% as mentioned or trading negotiation method
without HOSE approval. In circumstance that listed company would like to buy back
treasury share, the buying volume must not exceed 10% of trading volume of that
stock on the previous trading day.

b) The bid price for buying treasury share must not higher than prior price plus three
spread. The ask price for selling treasury share must not lower than prior price minus
three spread.

c) In the extraordinary circumstance, HOSE shall examine and approve trading treasury
share base on registered document of listed company.