The mechanism of trading in the MICEX government securities market is based on the "order-driven market" principle -- the market of competing orders in which a transaction is concluded automatically when the terms in two counter orders match.

The trading system is fully computerized: orders are entered and transactions are concluded electronically. A Dealer's entering an order means his unconditional consent to conclude a transaction on the terms indicated in the order.

Orders are entered and transactions are concluded during the trading day, which is divided in the following periods:

• the system (main) trading session (including the closing period); and
• the additional trading session.

In the course of the main trading session, transactions in the main trading mode and negotiation deals are concluded. The closing period is intended for transactions in non-standard numbers of bonds, concluded at average weighted prices set as a result of the main trading session.

The order of the additional trading session is established by the Bank of Russia. At present, it is intended for the conclusion and execution of transactions of REPO vs Bank of Russia and negotiation deals with the Bank of Russia.

The system (main) trading mode is anonymous, which means that trading is based on the "Order-driven market" principle. In this trading mode, Participants enter "non-addressed" orders (without specifying a market participant).

In the main trading mode participants can enter limit and market orders. A limit order is fulfilled at the price not higher (buy order) / not lower (sell order) than the price indicated in the order. A market order is fulfilled at the best price in counter orders, reached at the moment of entering.

Limit order are subdivided into competing and non-competing orders. As different from competing orders, in which the price is indicated by the Dealer, non-competing orders are entered into the trading system at average weighted prices at the moment of entering, calculated automatically by the MICEX. Orders may be entered with or without remaining in quotations.

All transactions in the system mode are concluded with the preliminary reservation of funds and securities (settlement code Т0).

Negotiation deals are concluded on the basis of orders with the indication of a particular party in the transaction, that is the market is "address" market.

There are negotiation deals without confirmation (negotiation deals between a Dealer and the Investor, served by this Dealer, or between two Investors, served by the same Dealer) and with confirmation (negotiation deals between Dealers acting on their own behalf and at their own expense, or at the expense and on the instructions of Investors).

Participants can conclude negotiation deals with preliminary reservation of funds and securities (settlement code Т0) or without preliminary reservation (settlement code Sn) . When concluding negotiation deals, participants can choose settlement codes from the list of available codes. The allowable values of n are set by the Bank of Russia.

All transactions are executed on the basis of the "delivery vs. payment " principle.

• The government securities market
• Money market