Market infrastructure - Slovenia

25.09.2014

Institutions and organisation

Stock Exchanges and related institutions

Ljubljana Stock Exchange (LJSE - www.ljse.si)

The LJSE market structure is based on the type and quality of financial instruments listed (size of listing, liquidity, quality and transparency of operations, trading method):

  • Equity market:

    • Prime market
    • Standard market
    • Entry market
    • SI-ENTER market
  • Bond market:
    • Bonds
    • Money market instruments
      • Treasury bills
      • Commercial papers
  • Structured Products market:
    • Closed-end fund shares
    • Fund market
    • Certificates
    • Warrants
    • Rights
    • Other products

Prime Market is a prestigious market intended for larger established companies renown for their liquidity and transparency of operations. It was established to underline the visibility of Slovenia's top listed companies among international investors. The listing of a company on the Prime Market also requires that the companies must meet additional disclosure standards:  

reporting under International Financial Reporting Standards (IFRS), publication of quarterly statements, publication of declaration of compliance with the Corporate Governance Code, reporting in English, thereby raising their international visibility, and compliance with the Exchange’s Guidelines on Disclosure.

Trading on LJSE takes place on a continuous automated basis every day from 09:15 to 14:20 via the Xetra platform. Xetra is an electronic trading system for LJSE that also enables auction trading for less liquid securities. In compliance with the classification of securities in auction trading, the Stock Exchange Management Board allots securities into groups that serve as the basis for the opening of the order book in the auction trading process. Auction trading of each group takes place between 11:00 and 13:10, according to a time table set up by LJSE. Xetra includes an automated monitoring system for unusual price and volume movements that also enables audit trail of all member trading actions. The trading system automatically triggers one of the safeguards mechanisms, such as volatility interruptions. Volatility interruption in a security is carried out if the trade is concluded at a price outside the following corridors:

  • dynamic price corridor – includes prices that deviate from reference price 1 by less than a percentage stipulate by the Instructions; or
  • static price corridor – includes prices that deviate from reference price 2 by less than a percentage stipulate by the Instructions.

Short selling is not allowed but can be committed within the two-day settlement period.

  • CSD - KDD (www.kdd.si)
    KDD (Klirinško depotna družba d.d.) operates under the supervision of the SMA.
    All trades concluded on the LJSE must by law be settled at KDD. Settlement for most transactions (equities and fixed income securities) is on-exchange or OTC (over-the-counter) and is carried out through the KDD CRVP securities processing system.
    KDD provides both safekeeping and settlement of securities for on- and off-exchange transactions. Settlement is performed by means of book entry transfer. A trade, once concluded on the LJSE, is binding. Since February 2017, KDD is integrated in the T2S system.

Regulatory structure

  • The Bank of Slovenia (BSI - www.bsi.si)
    BSI is a non-governmental independent institution and its primary task is to ensure the stability of the currency. In addition, it is responsible for licensing and supervision of the Slovenian banking system and it also regulates the foreign exchange market. It shares supervisory responsibilities with the SMA for the activities of local banks in the market.
  • The Security Market Agency (SMA - www.atvp.si)
    The SMA regulates the Slovenian capital market and the market participants. It has the authority to establish rules governing the market, grant licenses to brokerage houses, approve public offerings and investigate and prosecute offenders. The SMA also supervises the operations of the KDD and LJSE.