The trading process begins with investors who wish to buy or sell securities. Since investors cannot trade directly on the stock exchange, they must use the services of a licensed member of the Sarajevo Stock Exchange (SASE) to act as their intermediary.

To participate in the trading process, professional intermediaries must obtain a license from the Securities Commission of the Federation of Bosnia-Herzegowina and be registered members of both the Sarajevo Stock Exchange and the Securities Registry of the Federation of Bosnia and Herzegovina.

The complete list of SASE members authorized for trading

Once you’ve chosen a brokerage firm, you’ll need to visit their office to sign an intermediary agreement. This agreement is a one-time requirement and establishes the formal relationship between you and the broker.

Upon signing the agreement, the brokerage firm will assign you a unique identification code. This code is confidential and should only be shared with your broker.

After completing these steps, you can begin placing buy or sell orders. When submitting an order, you’ll need to specify the following details:

• **Security**: The specific security you wish to buy or sell.
• **Price**: Choose between a *limit order* (where you set the price) or a *market order* (where the transaction is executed at the current market price).
• **Duration**: The validity period of your order (e.g., open order, valid until a specific date, or daily order).
• **Volume**: The number of securities you wish to trade.

Investors at the Sarajevo Stock Exchange can issue orders with the following constraints:

a) Price Constraints

•     Market orders - unlimited bid/ask orders; they are to be executed at the next price determined
•     Limit orders - are bid/ask orders; they are to be executed at their specified limit or better
•     Limit orders with discretion - as with limit orders, the client specifies a limit price. However, the broker has the right to enter the clients' order at a better price - a maximum of 20% is possible.

b) Validity Constraints

•     Open orders - valid until it is executed on the market or removed by the member who entered it. An open order is valid up to 180 calendar days from the date of entry.
•     Daily orders - valid for a particular trading day
•     Valid till date - valid from the moment of entry, until it is executed on the market or until the specified date.

c) Added terms of visibility and execution

•     Ranged order - it enables to buy/sell at various prices up to the specified limit. The order stays in the system if it cannot be filled immediately.
•     Hidden volume - the entire volume is not shown on the market. The investor defines the visible and the hidden part of the order. The minimum size of such an order is 10.000 KM; if the value of the order falls below this threshold (i.e. after beeing executed in part), the whole order is transformed into a regular order (without any hidden volume).

d) Special terms of execution

•     All or none - can only be executed in full quantity
•     Minimum quantity of first trade - first trade must be concluded with a quantity equal or higher than the minimum quantity specified by the member. Minimum quantity must be higher than 1.000 KM
•     Minimum quantity of all trades - every trade must be concluded with quantity equal or higher than the minimum quantity (again, must be higher than 1.000 KM)

The members of the exchange are obliged to explain their clients the orders that are used on SASE. Market order enables the client to 'overtake' all the orders, but it's not recommendable to use with less liquid symbols. Limit order with discretion gives the broker authorization to set the price within the 20% of the limit set by client. It enables broker to react swiftly if the market circumstances change. If a client gives an order with hidden volume, his intention is to hide the quantity of the order away from the other market participants. Orders with special terms of execution are used when the client wants to avoid 'splitting' of the order, i.e. he wants the order to be executed within one or two transactions.

If you’re placing a buy order, you’ll need to make an advance payment into a designated account of your brokerage house. The funds on this account are not the property of the professional intermediary - in case of his bankruptcy they are not part of his assets). For sell orders, the brokerage firm may request confirmation of your securities holdings from the Securities Registry.

Once your order is submitted, the brokerage firm will provide a confirmation receipt. Your broker will then enter the order into the SASE trading system (BTS). When the order is executed, your broker will notify you of the transaction details, including the final price. Importantly, the executed price will never be worse than the price you specified in your order.

If you’re the buyer in a transaction, the purchased securities will be credited to your account in the Securities Registry. Shortly after the transaction, the Registry will send you an update confirming the change in your securities holdings.

If you’re the seller, the proceeds from the sale will be deposited into your account within 3-4 business days after the transaction. While the standard clearing and settlement period is T+2, additional banking procedures may extend this timeline by a day or two. The Securities Registry will also notify you of the updated balance in your account following the sale.