Behind the scenes: Sharesies’ process for NZ investments
Kia ora! Let’s dive into what happens when you place a buy or sell order for investments listed on the New Zealand Stock Exchange (NZX) through the Sharesies platform. 🇳🇿
Step 1: You place an order! 💖
You’ve exchanged your Australian dollars or US dollars into NZ dollars, and have placed your market or limit order. Sweet as! Your order gets sent to the Sharesies platform.
Step 2: Your order goes through Sharesies Market Service ✅
Sharesies Market Service is the system that connects the Sharesies platform to the NZ Stock Exchange (NZX). It’s also the system that decides if your order will ‘go to market’ or not!
When we receive your order, Sharesies Market Service asks a couple of questions:
Is the NZX accepting orders? The NZX is ‘the market’ where buyers and sellers come together. We can only send orders to the market between 8:30 AM and 4:45 PM Monday to Friday. Sharesies participates in the pre-open phase between 8:30 AM and 10 AM NZT on trading days—during this time, orders for NZX-listed shares will be placed on the market, but your order won’t fill until it matches with a buyer or seller when the market opens at 10 AM.
Does a human need to have a look? We might need to take a closer look at your order for a number of reasons, and decide if it’s good to go to market.
If an order is waiting to be placed on market, it’ll show as ‘pending’—you can usually cancel a pending order.
Step 3: Your order goes on market—woohoo! 🎉
Sharesies Market Service uses an algorithm to try and get you the best available price for your order, without causing any issues in the market...also known as ‘price discovery’. You can read about our best price policy in the Legal information section of your account.
Price discovery involves looking at things like the last traded price, market conditions, and availability of buyers or sellers—and then making adjustments until we find a price to trade at within a limit that we set. Orders placed through the Sharesies platform are automated, so your order fills as quickly as possible. A Sharesies dealer will only intervene if your order needs a helping hand!
Sometimes, your order can be completed in a single trade, straight away. Orders might also be 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.
Other times, your order might need to be placed across multiple smaller trades—this is called a ‘partially filled trade’. This also means your order might be completed at different prices.
Orders and partially filled orders that are waiting to be filled are called ‘processing orders’. If an order remains unfulfilled for 30 days, the unfulfilled parts of the order will typically be cancelled and your money will become available in your Sharesies Wallet, where you can place another order if you wish.
Step 4: Your order appears in your Sharesies account! 🍍
When your order is filled (either partially or fully), you’ll see your investments (if you’re buying) or money (if you’re selling) appear in your Sharesies account. 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. In many cases, this will happen as soon as you place your order!
Step 4 (behind the scenes 👀): Your trade goes to the NZX Clearing House 💸
Your order’s completed, a contract is generated to exchange money for shares and your Portfolio is updated. Awesome!
Meanwhile, Sharesies has an obligation to settle your trades with the NZX Clearing House. The NZX Clearing House sits between Sharesies and the buyer or seller on the other side of your trade and ensures that all on-market trades get ‘settled’.When your buy order is settled, your cash to pay for the order is given to the Clearing House, and the seller on the other side gives the Clearing House the shares. When the Clearing House has the cash and the shares, they pass them on to the buyer and seller. This usually happens 2 business days after the order (or part of the order) has been completed—also known as T+2 settlement.
Don’t worry though—this is only a behind the scenes process! It’s how your money and investments are kept safe.
There are a lot of moving parts to make sure your investments get through to your Portfolio! We hope this has given you a better insight into the investment process on the Sharesies platform.
Get in touch at firstname.lastname@example.org 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.