Moscow Exchange board approves parameters of discrete auction on forex market
MOSCOW. Nov 30 (Interfax) - The supervisory board of the Moscow Exchange has approved the parameters of discrete auctions on the forex market, the exchange reported.
The exchange has approved a temporary regulation and algorithm for holding discrete auctions on the forex market, Moscow Exchange managing director Igor Marich told Interfax.
"The Bank of Russia will make the decision to hold a discrete auction in forex trading and bring this to the attention of the exchange," Marich said.
The duration of an auction will be 15 minutes from when the Central Bank of Russia gives the order, he said. Bids will be collected in this period, but they will not be matched with one another; an algorithm established by the regulator and the rules of the exchange will determine the price for concluding transactions in the auction.
Central Bank officials were not available for comment.
The exchange earlier announced plans to approve the parameters for discrete auctions on the forex market this fall. This issue arose in late 2014-early 2015, when the ruble went into a freefall.
At present, the Moscow Exchange's trading rules do not provide for suspending trading except by decision of the regulator.
This is like a nuclear weapon in that it should be in the arsenal but it will not necessarily be used, the Central Bank said in the spring. The goal of a discrete auction is to slow the reactions of market players at times of high market volatility on the market.
The mechanism of discrete auctions is currently in place on the Moscow Exchange's securities market.