Australian Financial Services Licence No 245421
I am employed by a medium size Australian Stockbroker, licenced to speak to people about the buying, and selling of shares. I have been working in the equities market for over 25 years, and can inform you about the basics of buying and selling shares in companies listed on the Australian Stock Exchange.
If you have an interest in the sharemarket, but do not know what to do next, this guide will get you started.
You will also find on ebay a great selection of books about share investing and investment in general. It's a good idea to read at least one book on the subject before you start out. Just make sure they are written about the Australian stockmarket.
If you would like to buy shares, and you need advice, you will need to discuss this with your stockbroker. As a result of the recent Financial Services Reform Act, the subject of seeking advice about which shares to buy or sell deserves a guide on it's own.
SELLING YOUR SHARES AND GETTING PAID FOR THE SALE - Good News !
The best thing about selling shares as opposed to real estate is that it takes only 3 business days to settle after the day of the sale. Your broker will mail you a cheque on settlement day.
A great way to explain how to sell shares is to give you a simple example.
Many now own shares in a well known insurace company because it was demutualised a few years back and people often ask me how to go about selling them. In many cases, this is the only share these people own.
The shareholder will most likely not have an account with a broker and will need to open one before any sale can take place. Like banks, the stockbroker requires 100 points for identification and so will need to give the broker a copy of a driver's licence, passport, and/or other identification to make up the 100 points.
Once the account is opened, the broker will need a copy of your statement from the company's share register which states how many shares you own. On this form on the right hand side somewhere neat the top is an SRN number (shareholder reference Number) This number needs to be given to the broker so they can settle the sale and send your your money. The broker will then verify with the share register the amount of shares that you own, and then with your approval, will go ahead and sell the shares for you. Once the shares are sold the broker will send you a confirmation of sale form. The broker's fee for the service is deducted from the gross proceeds of the sale on the confirmation form (usually a minimum fee if it is a small parcel of shares). GST is only charged on the brokerage fee, and not on the gross proceeds of the sale. You will be send a cheque for the net proceeds of the sale after the fee and GST are deducted.
WHAT PRICE WILL I GET FOR THE SHARE?
If you give your stockbroker approval to sell at the current market price, they can then sell your shares to the highest bidder immediately. Should you want to sell at a price which is higher than the current market price, then your selling order will be queued electronically behind other sellers at the higher price. Keep in mind though, that if you would like a higher price, you may not sell your shares the same day you place the order.
Once the stockbroker places your order on the electronic platform, you order is 'live' in the system and if you want to cancel the order or change the price you must call your broker and ask them to do so. Please note: be absolutely sure that you do not place another order to sell, because you could sell your shares twice. The original order must be amended.
Many people still hold shares with SRN serial numbers. Each share you own will have a unique SRN number. There are no share certificates at all these days, so it's especially important now that you keep your statements in a safe place.
Another common situation is that people find themselves in a position of having to look after a portfolio of shares. Are all the papers in a mess? The first thing you need to do is sort out all those Issuer Sponsored Holding Statements and get them into some sort of company order. Check to see that all the addresses and names shown are correct and make sure that you have the most recent
statements. A stockbroker should then be able to verify how many shares are held in each company. If you need advice about the portfolio, then speak to a stockbroker.
A FINAL WORD - the minute you ask the stockbroker to recommend another share to buy with the proceeds of your sale you are seeking advice, and you will need to discuss in detail your personal financial circumstances and objectives with the stockbroker.
Much the same as ebay, which provides a huge efficient electronic market place to buy and sell goods, the Australian Stock Exchange provides an instant electronic trading platform which enables investors to buy and sell shares through stockbrokers licenced with ASIC. About the only thing you can't buy or sell on ebay (apart from the obvious restrictions) are shares. They must be bought and sold on a recognised Australian Stock Exchange.
I hope you found this guide useful, and I would be delighted if you would vote accordingly.
Best wishes and Happy Days to one and all.
Australian Financial Services Licence No 245421