Behind the scenes: Sharesies’ process for Australian investments
G’day! Let’s dive into what happens when you place a buy or sell order for companies and exchange-traded funds (ETFs) listed on the Australian Securities Exchange (ASX). 🇦🇺
Step 1: You place your order 🙌
You’ve exchanged your US dollars or NZ dollars into AU dollars, and have placed your market or limit order. Bonza! Your order gets sent to us at Sharesies.
Step 2: Your order goes through Sharesies’ market service 🍍
When you place an order, it goes to Sharesies' Market Service system first. Our Market Service considers a few key things, including whether the ASX is open.
The ASX is usually open between 10 AM to 4:11 PM Australian Eastern Standard Time (AEST), Monday to Friday. Opening hours will vary, depending on daylight savings time between Australia and New Zealand. You can see exact trading hours for the week ahead by looking at an ASX-listed investment in Sharesies.
You may be wondering where the extra 11 minutes are coming from! This is because for Australian orders, we’re participating in two extra auction phases:
Pre-open: orders for Australian shares will be placed on market, but your order won’t fill until it matches with a buyer or seller when the market opens. This auction is between 7 AM and 10 AM (AEST).
Pre-close: orders can be placed during this time, and your order might be filled if there’s a price match between a buyer and seller. This auction usually happens between 4 PM and 4:11 PM (AEST).
Outside of these specific pre-trading hours, your order won’t be sent to market until it reopens.
Sharesies will place your order in accordance with our Best Price Policy. You can find this under Account > Legal information > Best Price Policy).
Step 3: Your order is sent to CMC Markets 🐨
CMC Markets Stockbroking Ltd (“CMC Markets”) are our broker for Australian shares. They execute buy and sell orders for ASX-listed investments on behalf of Sharesies.
When we receive your order, we queue it up through Sharesies’ Market Service. Then, we securely send your order to CMC Markets, who place it on the market. CMC Markets will only see the orders as coming from Sharesies, not each individual investor. Market and limit orders placed for Australian shares may be sent to market individually, or sent to market with similar orders placed by other investors—this is called ‘aggregation’.
The ASX is typically ‘the market’ where buyers and sellers come together. It’s possible that your order may be filled on another exchange called Chi-X. This happens when your order is able to be filled at a better price on Chi-X. The ASX and Chi-X are both regulated by the Australian Securities and Investments Commission (ASIC).
Step 4: Your order goes to market ✨
Your order gets placed on the market. Nice!
If you’ve placed a market order, the market will decide the price. If you’ve placed a limit order, you’ll have more control over the amount you buy or sell an investment for. Because you’re able to invest in fractional shares on Sharesies, and they’re held by a custodian rather than under an individual Holder Identification Number (HIN), you don’t need to meet the $500 minimum investment requirement that usually applies when investing on the ASX. Sharesies takes care of this part for you.
When your order goes to market, it might be filled in a single trade straight away, or over multiple smaller ‘partial’ trades and at different prices. If your order (or partially filled order) is waiting to be filled, it’s called a ‘processing order’—which you can choose to cancel. If any part of your processing order isn’t filled after 30 days, we’ll cancel it and pop the money back into your Sharesies Wallet.
Step 5: Your order appears in Sharesies! 🎉
When your order is filled (either partially or fully), you’ll see your investments (if you’ve bought investments) or money (if you’ve sold investments) appear in Sharesies. You’ll also be able to see a contract note that gives you all the info you need to know about your order and the trade that took place. Just remember that orders can sit on market for up to 30 calendar days to be filled—but, in many cases, your order can fill immediately. Penny stocks can be more illiquid, meaning it can take longer for an order to fill.
Behind the curtain, Sharesies is settling your order with CMC Markets. This basically means we need to pay CMC Markets the money for your order and receive your investment in return (and vice versa if you’re selling). This happens on a T+2 basis—the ‘T’ stands for transaction date (the day the trade takes place) and ‘+2’ means plus two working days. We need to deliver money or shares to CMC Markets for your order within these two working days. We take care of this, and you don’t need to do anything on your end!
Your investments are held in custody on bare trust by a separate company called Sharesies Nominee Limited in the Clearing House Electronic Subregister System—more commonly known as CHESS.
We’re holding your investments for you and keeping them safe, but you’re still the owner at all times—read more about our custodial service. 👍
Lingering questions? 💡
We’re keen to hear them! Flick our Investor Care team an email and we’ll be more than happy to help you out.
Ok, now for the legal bit
Investing involves risk. You aren’t guaranteed to make money, and you might lose the money you start with. We don’t provide personalised advice or recommendations. Any information we provide is general only and current at the time written. You should consider seeking independent legal, financial, taxation or other advice when considering whether an investment is appropriate for your objectives, financial situation or needs.