The Warsaw Stock Exchange joined the group of exchanges, which have already installed the NSC-based systems: Brussels (1995), Sao Paulo (1996), Chicago Mercantile Exchange (1997), Lisbon (1998), Singapore (1999), Montreal (2000) and Australian Derivatives Exchange (2000).
The NSC is also the platform that the recently created Euronext exchange intends to use.
The new trading system delivery contract was signed on August 21, 1998.
Several dozen institutions of the Polish capital market, including brokerage houses, the Polish Securities and Exchange Commission, the National Depository for Securities and major data vendors were involved in the WARSET implementation project.
The WARSET system offers, among others:
- state-of-the art technology
- open architecture with possibility for members’ own systems to be connected to the Exchange trading system
- possibility of processing orders submitted via the Internet
- enhancement of market data distribution: public order books (5 best offers) and indicative opening price
- functionalities comparable with most developed European markets
Currently, the Warsaw Stock Exchange is the largest market in the region. With the introduction of its new trading system Warsaw has taken another step towards the process of European integration.
Along with the WARSET system, the Exchange introduces a new session schedule. Sessions are held between 9.00 and 16.15 hours. Continuous trading is now extended and lasts six hours for cash instruments (10.00-16.00) and seven hours for futures (9.00-16.00).
WARSET, divides all listed companies into three categories based on liquidity assessment and allocates them to separate quotation systems. The most liquid shares will be traded in the continuous trading system, while the less liquid will be allocated to the single price auction system with one or two auctions. Stocks of one company may only be quoted in one system. Each of the three systems has its own schedule.
Before, only round lots of shares could be traded in continuous trading. Now, one share is the smallest transaction unit in all the quotation systems. Block trades may now be made during and after a session.
Orders placed during pre-opening phase are input directly into the central order book, but no transactions are made. Five best buy and sell orders are on continuous display. In addition, a so-called indicative opening price is calculated and announced in real-time; it is calculated in the same way as the opening/closing price and the single price, but no transactions follow. The indicative index value is also calculated and published.
WARSET allows investors to view the order book (5 best bid and ask offers). Throughout the session, investors can see changing indices, buy and sell orders awaiting execution and information on executed trades, turnover and current prices. The full order book is acessible to brokers representing member firms.
WARSET determines the closing price by a closing auction. This is important as the closing price will be a reference for the opening price on the next trading day and will determine the so-called price brackets, i.e. allowed price variations. The closing price is determined for all securities traded in the continuous system: shares, bonds and derivatives, including WIG20 and TechWIG index futures and currency futures.
With the introduction of WARSET, investors have a wider choice of order types, including limit orders, must-be-filled orders, market on opening and market orders, as well as minimum size, hidden orders, stop, fill and kill and fill or kill orders. This variety of order types allows investors to tailor their investment strategies. New order types will be introduced into WARSET gradually.
In the WARSET system, execution of orders follows price and time priority.