Behind the scenes: Sharesies’ process for Australian investments
Let’s take a look into what typically happens when you place a buy or sell order for investments listed on the Australian Securities Exchange (ASX) through Sharesies. We’ve also covered how this process works for NZ orders and US orders.
Step 1: You place your 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’s received by Sharesies.
Step 2: Your order goes through Sharesies’ market service 🍍
When you place an order, it goes to Sharesies’ market service system first. The 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 AEST, Monday to Friday (this might change over public holidays). 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 Australian orders participate 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.
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.
Outside of these specific pre-trading, or trading hours, your order won’t be sent to market until it reopens.
Step 3: Your order is sent to CMC Markets 🐨
Sharesies works with CMC Markets Stockbroking Ltd (“CMC Markets”) to execute buy and sell orders for ASX-listed investments.
Your order is sent securely to CMC Markets, who place it on the market. CMC Markets will only see the orders as coming from Sharesies, not each individual investor. 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’. When orders are aggregated, they retain their priority. If an aggregated order only partially fills, and your order was placed first, this means it’ll be filled first.
The ASX is typically ‘the market’ where companies list and buyers and sellers come together. It’s possible that your order may be filled on another trading exchange called Cboe Australia. This might happen when your order is able to be filled at a better price on Cboe Australia. The ASX and Cboe Australia 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 price that it is placed on market will be determined by our Best Price policy or that of our executing partner. For more information see our article on Share Prices. If you’ve placed a limit order, you’ll have set a limit for the amount you buy or sell an investment for. Because your investments are held under a nominee Holder Identification Number (HIN) rather than under an individual 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 almost 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’. If your order isn’t filled after 30 days, it will typically be cancelled and the money becomes available again in your Sharesies Wallet.
Step 5: Your trade appears in Sharesies (and gets settled in the background)! 🎉
If 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 might be restricted from withdrawing any money until the funds have been cleared. 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 may fill almost immediately. Some investments can be more illiquid, such as penny stocks or companies that are experiencing financial problems, meaning it can take longer for an order to fill.
Once the order becomes a trade, Sharesies settles 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 usually happens two business days after the trade date—known as T+2 settlement. 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!
Lingering questions? 💡
We’re keen to hear them! Flick our team an email at help@sharesies.com.au 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.
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