i

CommSec Multi Markets and Best Execution Policy Disclosure

CommSec is pleased to announce membership to CHi-X Australia, an alternative exchange operator to the ASX, offering trading in the top 200 ASX stocks (ASX 200).

What does this mean for you?

CommSec will now automatically consider trading opportunities available on Chi-X Australia, in addition to ASX TradeMatch and other venues, when accepting your order. This is to ensure you receive the best trade outcome available in accordance with the Best Execution Policy.

Your orders may automatically benefit from better prices or faster order execution available in Chi-X, or any trading venue that CommSec participates in. Simply continue to place your orders using your preferred method and CommSec will do the rest.

CommSec Best Execution Policy and document updates

Commsec have updated the Best Execution Policy and Terms & Conditions (T&Cs) to ensure you understand how we will deliver Best Execution to you.

We recommend that you read the updated Best Execution Policy, which contains the T&Cs addendum, before you place your next Australian order.

As the market structure continues to evolve, our Best Execution Policy will also evolve, we will keep you informed of any further updates.

View the Best Execution Policy or you can call us on 0800 272 732 for more information.

Frequently asked questions

What is a Best Execution Policy and why is a Best Execution Policy required?

The Best Execution Policy describes how CommSec intend to achieve best outcome for your orders, and are required by ASIC to provide an outline of the policy, to ensure you understand:

  1. What CommSec define as best executions,
  2. Which trading venues CommSec currently participate in and,
  3. How CommSec will go about obtaining best outcome for your orders in accordance with the policy

What does the Best Execution Policy (BEP) cover?

Our Best Execution arrangement applies to "Equity Market Products" traded on the ASX, these include:

  • Shares
  • Managed investment schemes (including exchange traded funds (ETFs))
  • Rights
  • Company options

What trading venues does CommSec participate in?

CommSec is a member of the Australian Securities Exchange (ASX) and Chi-X Australia is authorised to participate in the following venues:

  • ASX TradeMatch
  • ASX Centre Point
  • Chi-X Australia
At this point CommSec will not participate in the ASX Pure Match venue but will continue to monitor liquidity levels in PureMatch as part of its Best Execution review process to determine whether connection is necessary.

What will Best Execution mean?

Your orders will be automatically handled in accordance with our Best Execution Policy. It is important to note that there are no changes to the way you enter an order as a result of our Best Execution Policy, nor are we expecting this to change in future.

As we are connected to the alternative trading venues such as Chi-X Australia and ASX Centrepoint, we will continue to automatically handle your order in accordance with our Best Execution Policy.

What does multi-markets mean?

The ASX will now operate a primary trading venue known as ASX TradeMatch and new trading venues, known ASX Centrepoint and ASX Pure Match, where ASX equity trading activity is conducted. With the introduction of a competitor venue, Chi-X Australia, equity trading activity for the same set of equity securities may now be conducted on a trading venue other than ASX TradeMatch.

The introduction of Chi-X Australia effectively creates multiple markets where a stock can be traded - for example, stocks like BHP, Telstra and other top 200 stocks may now be traded on both ASX TradeMatch, ASX Centrepoint, ASX Pure Match and Chi-X Australia.

What does multi-markets mean for me?

From March 2012, CommSec will automatically consider trading opportunities available on Chi-X Australia, in addition to ASX venues, when accepting your order. This is to ensure you receive the best trade outcome available in accordance with our Best Execution Policy. Your orders may automatically benefit from better prices or faster order execution available in Chi-X, or any trading venue that CommSec participates in. Simply continue to place your orders using your preferred method and CommSec will do the rest.

How do I participate in multi-markets?

As your broker, we are committed to providing you with access to trading venues that ensure you can achieve the best outcome for your orders. There is nothing specific you are required to do to participate in multi-markets, as we expect all orders to automatically participate in multi-markets once we are connected to Chi-X Australia and ASXCentrepoint. Once connected to multiple markets, unless you instruct us otherwise, we will automatically send your order to the trading venue(s) that will achieve the best outcome for your order, in accordance with our best execution policy.

How do you ensure you get me the best outcome for my orders?

Our Best Execution Policy outlines our considerations in determining what trading venue(s) your order will be sent to. However, we will take reasonable steps to execute your order on the basis of Best Total Consideration, i.e. the purchase or sale price after brokerage.

Your order can be executed via different methods including by an automated order router or by human intervention through a licenced CommSec trader. Either way, we will always attempt to obtain the best possible price for your order unless you instruct us otherwise.

What is a trading venue?

A trading venue is defined as a place where buyers and sellers of securities go to trade. ASX TradeMatch is the current primary trading venue in Australia. Chi-X Australia, ASX CentrePoint and ASX PureMatch are alternative trading venues to ASX TradeMatch, offering trading in a subset of the stocks listed on ASX TradeMatch.

What is ASX TradeMatch?

ASX TradeMatch (order book) is the current primary trading and listing venue for equities trading in Australia. Prior to the introduction of multi-markets and alternative trading venues (such as Chi-X Australia), ASX TradeMatch was the primary trading venue for all equity trading. A subset of securities listed on ASX TradeMatch may be traded on alternate trading venues. ASX TradeMatch will be our default trading venue once multi-market trading is live.

What is Chi-X Australia?

Chi-X Australia is a new trading venue (order book) established as an alternative to ASX TradeMatch. Chi-X Australia provides trading in a subset of ASX listed securities - the ASX200 securities.

Now that we are connected to the Chi-X Australia trading venue, we may automatically send all or part of your order to this trading venue to be executed to ensure you achieve the best outcome possible, in accordance with our Best Execution Policy.

What is ASX PureMatch?

ASX PureMatch is an alternative trading venue (order book) established by the ASX which will provide trading in a subset of ASX Listed securities. At this point, CommSec will not participate in the ASX PureMatch venue until the venue is proven and there is sufficient liquidity to trade. CommSec will continue to monitor ASX PureMatch to ascertain when to participate.

When is Chi-X Australia going to be live for trading and what securities will you be able to trade on Chi-X Australia?

Chi-X Australia commenced operations on Monday 31st October 2011, initially trading only a subset of ASX listed securities (BHP,CSL,LEI,ORG, QBE, WOW, STW, ISO) and with a small set of foundation market participants (brokers). Chi-X Australia has increasing the traded stocks to the top 200 companies and ETFs.

Note: Chi-X Australia does not support ETOs, Warrants or CFD trading at this stage.

When is ASX PureMatch going to be live for trading?

ASX PureMatch launched on 28th November 2011.

At this point in time, CommSec will not participate in the ASX Pure Match venue until the venue is proven and has sufficient liquidity to trade.

Will brokerage fees change as a result of multi-markets?

No. There are no changes to brokerage fees with the introduction of multi-markets.

Where can I find out more about multi-markets?

The Australian Securities & Investments Commission (ASIC) website provides a wealth of information relating to the equity market structure and the rationale for moving to a multi-market trading model. Please refer to http://www.asic.gov.au/.

What does NBBO stand for?

NBBO is an acronym for National Best Bid and Offer. The national best bid price is the highest price that all buyers are willing to pay for a particular stock, regardless of what trading venue it is being published on. Similarly, the national best offer price is the lowest price that all sellers are willing to accept for a particular stock.

As bids and offers may differ between trading venues, the NBBO will be used to describe the Best Bid Price and Best Offer Price across all trading venues. For example, if the Bid/Offer on ASX TradeMatch is $1.00/$1.02 and the Bid/Offer on Chi-X Australia is $0.99/$1.01, the Bid/Offer or NBBO will be $1.00/$1.01.

What does NXXT mean in course of sales?

NXXT is a type of "crossing" or "crossed trade" reported to the ASX by your broker (CommSec) known as NBBO Crossing. It is a crossing which has occurred at the current NBBO price and has been reported to the ASX. This type of trade typically occurs when CommSec has managed to automatically match your order with another CommSec client order through the CommSec Crossing System. As the crossing has been reported at a price "at or within" current NBBO price, you are not disadvantaged in any way. In fact, your order may have been executed faster than it would have been if sent to the public trading venues, or at a price that is better than that listed on the public trading venues.

More information can be found on the ASX website about NBBO Crossings.

A "crossing" or "crossed trade" is a trade which has resulted from matching a buyer and a seller of a particular stock, where the buyer and seller are clients of the same broker.

What does CX or CXXT mean in course of sales?

CX is a trade that has occurred in ASX CentrePoint at the current midpoint price. The midpoint price is determined by ASX to be the midpoint between the current ASX bid/offer spread. CXXT is a cross trade or crossing that has occurred in ASX CentrePoint at the current midpoint price.

How do I know if I am a retail client or wholesale client?

You are typically viewed as a retail client, unless we both agree you are a wholesale client.

How does Best Execution Disclosure differ to the T&Cs?

Best Execution is different from Terms & Conditions (T&Cs) because unlike T&Cs, the Best Execution Policy does not require you to either acknowledge or consent to it. It simply states how a participant will endeavour to get the best outcome for all of your orders.

Will I need to do anything differently, when trading in multi-markets?

No. There is no change to the way you interact with us today when specifying your order. You can continue to place instruction with us using your preferred order entry channel.

Do I need to choose which trading venue I would like to place my order on, or provide any additional information with my order?

No. We will automatically access the trading venue(s) that will provide you with the best outcome for your order in accordance with our Best Execution Policy. We have always sought to get best trade execution for you and will continue to do so, however now we do this across several markets instead of just one.

If my orders are executed on a different trading venue like Chi-X Australia, will my holding still be CHESS sponsored?

Yes. Your existing CHESS sponsorship will remain. Regardless of what venues orders are executed on, all trades will settle in the same way they do today. If you are CHESS sponsored by us, your stock will settle to your nominated HIN as it does today.

What are the Chi-X Australia Trading hours?

Chi-X Australia allows trading between the hours of 10:00AM and 4:12PM. Unlike the ASX, Chi-X Australia does not operate an opening and closing auction. Once we are connected to Chi-X Australia, we will automatically send orders to the most appropriate and open trading venue(s) in accordance with our best execution policy.

NZX Firm logo

ASB Securities Limited is a NZX Firm. ASB Securities terms and conditions apply.

ASB Securities Document Library CommSec Multi Markets and Best Execution Policy Disclosure