Rules of the London Stock Exchange

1 Rules of the London Stock Exchange Rule Book EFFECTIVE DATE 1 July 2019 Rules OF THE London Stock Exchange 1 July 2019 Page 2 Table of Contents Contents Page Number Introduction to the Rulebook 3 Definitions 4 Core Rules 17 Order Book Trading Rules 34 Off Order Book Trading Rules 43 Market Making Rules 52 settlement , clearing and Benefit Rules 61 Compliance 76 Default 92 Rules OF THE London Stock Exchange 1 July 2019 Page 3 Introduction Reference to any statute and statutory provision shall be construed as those in force from time to time.

2 References to time shall mean the time in London unless stated otherwise. References to days are business days unless otherwise stated. Chapter headings, section headings and the titles and numbers of Rules are for guidance and ease of reference only. For the purpose of these Rules , an act or course of conduct includes both acts and omissions. Terms in bold are defined terms and shall have the meanings set out in the Definitions unless the context otherwise requires, and cognate expressions shall be construed consistently with them.

3 Rules with supplementary guidance are flagged with the notation G with the relevant guidance located immediately after the rule. A breach of the guidance is evidence of a breach of the rule. A breach of the Rules would be subject to the disciplinary processes currently in place. These Rules shall be construed in accordance with, and governed by, the laws of England and Wales. The Exchange shall not be liable in damages for anything done or omitted in the discharge of these Rules unless it is shown that the act or omission was done in bad faith.

4 The Exchange s Rules make a clear distinction between a member firm acting as principal and as agent. Two trades with a member firm interposed as agent is deemed to be a single transaction. Two trades with a member firm interposed as principal are deemed to be two transactions. Structure This Rulebook is structured as follows: Section Rules beginning Content Definitions ~ Definitions applicable to these Rules Core Rules 1000 Ongoing requirements for member firms and Rules that apply at all times Order Book Trading Rules 2000 Rules applying when trading on an order book Off Order Book Trading Rules 3000 Rules applying when trading away from an order book Market Making Rules 4000 Rules applying to market makers settlement , clearing and Benefit Rules 5000 Rules applying to settlement .

5 clearing and benefits Compliance C series Compliance procedures Default D series Default Rules Supporting documentation The Guide to the trading system provides an overview of the functionality of the trading system and supports the Rulebook. Rules that are supported by information in the Guide to the trading system are flagged with a GT for ease of reference. The Millennium Exchange & TRADEcho Business Parameters ( parameters ) has also been created to support the Rulebook. This provides the specific system thresholds that govern member firm interaction with the trading system.

6 The parameters is kept up-to-date to ensure that they fully describe the operation of tradable instruments in the various segments of the Exchange s markets. Rules that are supported by specific parameters are flagged with a P . The parameters provides the specific system thresholds that govern member firm interaction with the trading system. Rules OF THE London Stock Exchange 1 July 2019 Page 4 DEFINITIONS Where the context is appropriate the plural form of a defined term is also deemed as being the defined term and as such appears in bold text within the Rules .

7 Admitted to trading admission to trading on the Exchange s markets agency cross a trade by which a member firm acting as an agent matches the buy and sell orders of two or more non-members at the same price and on the same terms agent a member firm acting on behalf of a customer in an agency capacity (Amended N37/09 effective 19 August 2009) AIM the market provided by the Exchange for transactions in AIM securities AIM security a security which the Exchange has admitted to trading on AIM AIM primary market a trading venue that is included in the AIM primary market registered organisation registered organisation list that the Exchange maintains and publishes on its corporate website.

8 Trading venues will be considered for inclusion on this list upon request of a member firm AIM secondary market a Regulated Market, Multilateral Trading Facility, or Approved Publication registered organisation Arrangement that does not have a primary market relationship with AIM companies that meets the criteria as set out by the Exchange from time to time (Amended N09/17 effective 3 January 2018) back a situation where a best offer price is lower than the best bid price, in the same security (Amended N09/17 effective 3 January 2018) best bid the highest bid price displayed on the trading system (Amended N26/10 effective 14 February 2011) best offer the lowest offer price displayed on the trading system (Amended N26/10 effective 14 February 2011) bid price the price at which a member firm is prepared to buy securities (Amended N09/17 effective 3 January 2018)

9 Broker dealer in relation to transactions in securities of any description, a member firm which is not a market maker in those securities (Amended N09/17 effective 3 January 2018) business day any day on which the Exchange is open for dealing Rules OF THE London Stock Exchange 1 July 2019 Page 5 buyer (a) a member firm purchasing securities from another member firm; (b) in the case of a central counterparty trade a matched buyer; or (c) in respect of a lending arrangement, on the outward leg the borrower and on the return leg the lender buying-in an Exchange mechanism which facilitates the delivery of securities in unsettled, sold.

10 On Exchange trades buying-in notice a notice issued by the Exchange at the instigation of the buyer to a seller who has failed to deliver a security in settlement of an on Exchange trade call payment day the last day fixed by the issuer for payment of call monies central counterparty a body that assumes the risk for central counterparty trades by acting as the selling party to a matched buyer and the buying party to a matched seller or their clearing member, as appropriate central counterparty contract any contract arising between Non clearing Members, clearing members, clients of agency trades and a central counterparty, resulting from a central counterparty trade (Amended N06/19 Effective 18 March 2019)