Behind the scenes: Sharesies’ process for NZ investments—Sharesies Australia
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Behind the scenes: Sharesies’ process for NZ investments

Explainers

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. 🇳🇿

15 November 2021

4 min read

Behind the scenes: Sharesies’ process for NZ investments

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 your order is received, Sharesies Market Service asks a couple questions:

  1. Is the NZX open?—The NZX is ‘the market’ where buyers and sellers come together. Orders can only be sent to the market when it’s open, usually between 10 am and 4.45 pm New Zealand Standard Time (NZST) Monday to Friday. If the market is closed, your order will wait until it’s open again.

  2. Does a human need to have a look?—Someone 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 approved, or waiting for the market to open, it'll show as 'pending'—you can cancel a pending order. In all other cases, your order will go straight on market!

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 Settings part in 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. Other times, it might need to be placed across multiple smaller trades to complete your order—this is called a ‘partial trade’. This also means that your order might be completed by partial trades, at different prices.

Orders, or partial orders that are waiting to be filled are called ‘processing orders’—you can cancel processing orders, if you want! If an order remains unfulfilled for 30 days, the unfulfilled parts of the order will 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 (again!): Your order goes to the NZX Clearing House 💸

Your order’s completed 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. It’s responsible for making sure that all trades happen, and manages the risk of having heaps of different people trading with each other.

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 working 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 help@sharesies.com.au 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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