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Behind the scenes: Sharesies’ process for managed funds

Explainers

Let’s look at what happens when you place a buy or sell order for managed funds with Sharesies.

9 May 2022

3 min read

Sections of cut up fruit are sitting on a light blue backdrop. There are slices of oranges, pineapples, and nectarines, as well as whole mangos.

Step 1: You place a buy or sell order 💖

This is the bit that you see. You might be buying a new investment, or selling an existing one. Once you’ve placed your order, it gets received by us here at Sharesies.

Step 2: Sharesies confirms your order ✅

At around 12:30 PM each working day, we confirm all the buy and sell orders. Orders are placed daily as a group.

For example:

  • If you place an order at 11 AM on Monday morning, you’ll be part of that day’s 12:30 PM order group.

  • If you place an order at 1 PM on Monday afternoon, you'll be part of Tuesday’s 12:30 PM order group.

  • If you place an order after 12:30 PM on Friday (or during the weekend), you’ll be part of Monday’s 12:30 PM order group.

At this point, the price for the units you bought or sold is locked in. This price might not be the same as the one shown on Sharesies at the time, as pricing data from fund managers is usually 1-3 days delayed (but can be up to 23 days delayed). 

For a buy order, we buy you as many units as possible for the dollar value of your order. For a sell order, we sell the number of units you've specified.

Step 3: Your order gets processed 💸

Once we’ve confirmed your order, we send it to its respective fund manager. For each managed fund we have on Sharesies, we send two different orders—the buy orders in New Zealand dollars and the sell orders in units. The unit price is confirmed by the fund managers at the end of the process.

Step 4: Your investments are recorded ✍️

Registries work on behalf of fund managers to record changes in ownership, dividends, and statements—among other things!

Once the share registries have recorded any changes, they send us a confirmation called a contract note. This contains the order information for each order group and all the funds within it—including the number of units, price per unit, total trade value, and trade date.

When we receive a contract note, we check the info we’ve been given against all the records that we hold for individual investors. 

Step 5: Your order settles and appears in Sharesies 🎉

Once we’ve confirmed that everything aligns, we can settle your order. This is when your investments (if you’re buying), or money (if you’re selling), appear in your Sharesies Portfolio.

Settlement times differ depending on the managed fund, but in most cases it’ll take 1–3 working days from the day your order is processed. The settlement time is commonly expressed as T+1, T+2, T+3 and so on. ‘T’ stands for the trade date, and the numeral stands for the number of working days the order takes to settle. 

Take ‘T+2’ for example. If your order is processed as part of Monday’s order group, Monday will be your trade date—plus two days means you can expect your order to settle and appear in your Sharesies Portfolio on Wednesday.

What else happens behind the scenes?

As you can see, getting investments into your Portfolio involves lots of moving parts. And those moving parts are different for each type of investment. If you’re curious about how the process differs, check out our other behind the scenes articles:

Get in touch at help@sharesies.co.nz if there’s anything else you’d like to know more about!


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.

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