Client Trading Notices

Investing between the flags - A Guide to investing by ASIC

On June 28, ASX launched a range of new order types: Centre Point Order®, Centre Point Crossings and Undisclosed Order to better meet the needs of traders.

The Investing between the flags guide sets out the basic principles of investing and suggests that people develop and stick to a sound investment plan.

Download Guide

Trading Obligations - Market Manipulation

The Australian Securities Exchange (ASX) places obligations on Market Participants to ensure that each order it receives and places into the market does not have a manipulative effect on the integrity of the market, or is likely to leave the market misinformed. ASX is the regulator which monitors orders entered into the market by all market participants on a day to day basis. In addition to the ASX, the Australian Securities and Investment Commission also monitors market activity to ensure that manipulative trading is identified and investigated.

FPM Clients need to understand that certain practices in placing orders can constitute market manipulation, or lead the market to perceive that the orders may have been placed for that purpose.

Here are some of the non-acceptable trading practices:

• Insider Trading

  Placing orders to buy or sell a security, where you hold or have become aware of price sensitive information relating to that security that is not generally available, and which would be likely to materially affect the price of the security involved, were it is made available.

• Order Stacking or Layering of bids

  placing buy/sell orders at various price steps below the market to create a false appearance of buying or selling demand.

  Entering large or undisclosed orders on the opposite side of the market to that in which a genuine order is to be executed.

  Marking the close, involves buying or selling a stock near the close of the day’s trading, with the objective of affecting the closing price by either increasing, decreasing or maintaining the same price. This might be done to avoid margin calls. A common indicator is trading in small parcels of the security just before the market closes.

• Wash trades

  Placing orders where the same party is buyer and seller of the same security – execution of such orders will raise the question of whether the transactions involves a change of beneficial ownership, and whether the trades are intended to artificially inflate turnover, and /or increase the price of a security.

• Matched Orders

  Placing an order to sell or buy securities where you know that an associate has made or intends to make a corresponding offer to buy or sell the same securities on substantially the same terms.

  Being both the buyer and seller on the one transaction (placing a buy or sell order for an account with a broker other than FPM, and placing a corresponding sell or buy order for the same account through FPM).

  Placing orders that are un-commercial (eg small value, brokerage may be higher than the trade value).

  Placing orders, then cancelling them within a few minutes of entry without apparent reason at any time, but especially prior to:

  • the market open,
  • just after the market open, or
  • In the period before or during ASX’s daily closing Single Price Auction).

Thinking of Trading Contracts for Difference (CFDs)?

Retail investors who are considering trading in contracts for difference (CFDs) have a new resource that aims to provide clear, independent guide on CFDs and the risks they entail.

The guide – entitled ‘Thinking of trading contracts for difference (CFDs)?’ was prepared by ASIC.

Download Guide

Market Phases / Trading Hours (EDST)

Pre-open Phase

Pre-opening takes place from 7:00 am to 10:00 am, Sydney time. During Pre-opening: Brokers enter orders into ITS in preparation for the market opening. ITS does not trade orders (delete - relevance to retail clients?). Investors may enter orders on-line. The orders are queued according to price-time priority and will not trade until the market opens.

Overnight and overseas trades may be reported until 9:45 am, Sydney time. These trades must take place according to ASX Market Rules.

Opening Phase

Opening takes place at 10:00 am Sydney time and lasts for about 10 minutes. ITS calculates opening prices during this phase. Securities open in five groups, according to the starting letter of their ASX code:

Group 1 10:00:00 am /- 15 secs A-B, e.g. ANZ, BHP
Group 2 10:02:15 am /- 15 secs C-F, e.g. CPU, DVT, ECP, FXJ
Group 3 10:04:30 am /- 15 secs G-M, e.g. GHP, KYC, LIB
Group 4 10:06:45 am /- 15 secs N-R, e.g. QAN
Group 5 10:09:00 am /- 15 secs S-Z, e.g. TLS

The time is randomly generated by ITS and occurs up to 15 seconds on either side of the times given above, e.g. group 1 may open at any time between 9:59:45 am and 10:00:15 am.

Normal Trading

Normal Trading takes place from 10:00 am to 4:00 pm, Sydney time. Brokers enter orders into ITS and ITS matches the orders against each other, resulting in trades i.e in this phase ITS automatically matches all trades in Price/Time Priority on a continuous basis.

The vast majority of trades take place during Normal Trading.

Pre CSPA

Between 4:00 pm and 4:10 pm, Sydney time, the market is placed in Pre-open. Trading stops and brokers enter, change and cancel orders in preparation for the market closing.

Closing Single Price Auction

The Closing Single Price Auction takes place between 4:10* pm and 4:12 pm, Sydney time.

ITS calculates closing prices during this phase. *Random 60 secs

Adjust

The Adjust takes place from 4.12 pm to 5:00 pm, Sydney time. During this phase: Brokers may ‘tidy up’ their orders by cancelling unwanted orders, amending orders, etc. New orders cannot be entered and ITS does not execute trades.

Brokers wishing to trade contact each other by telephone. ASX Market Rules ensure that trading takes place in an orderly fashion.

Trading during the Adjust phase is referred to as overnight trading.

Adjust On

This state is the same as the ADJUST session state.

Purge Orders

Orders that are expired orders, too far from market etc will be centrally inactivated/ purged.

System Maintenance

Administration/ system adjustment session state.

Close

No Trading Messages may be entered or amended in ITS and no matching or Auctions take place.