New
Client
Guide
Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec)
Commsec New Client Guide | 1
Becoming CHESS sponsored
by CommSec.
CHESS (Clearing House Electronic Subregister System) is the computer system used by the Australian
Securities Exchange Limited (ASX) to record shareholdings and manage the settlement of share
transactions.
There are a number of advantages to having your shares CHESS sponsored by CommSec:
• You can automatically keep track of your portfolio and its market value using the online Portfolio
Statement at [Link]
• You can buy and sell shares immediately because all the required information is at hand (that is, you
don’t have to ask the company to provide the information)
• You can place a buy order without a deposit if you have sufficient holdings sponsored by us.
FACTS AND FIGURES
Your responsibilities
It is your responsibility to monitor your shareholdings and take account of changes resulting from
corporate actions, such as consolidations. We make every effort to act on your instructions, but we rely
on you to ensure that those instructions are correct. If we act correctly on your instructions and you
overbuy or oversell as a result, we will not be held liable.
You must ensure that your contact details are up-to-date at all times. To update your contact details,
log on to the website [Link].
ACTIONS OF THIRD PARTIES
If you make an investment decision based on information provided by a third party, whether it is through
our website, a share registry or your margin lender, CommSec cannot be held for any loss or damage
(including consequential loss, loss of profit and economic loss).
DEPOSITS FOR TRADES
You can place orders up to $5,000 for leading stocks and up to $1,000 for non-leading stocks
without any deposit. These limits apply to the total amount of outstanding Buy orders or unsettled Buy
transactions on your account.
If you have a Commonwealth Direct Investment Account (CDIA) or are CHESS sponsored by CommSec,
you may be able to place larger orders without a deposit, with your account balance or CHESS holdings
acting as a deposit for your orders.
2 | Commsec New Client Guide
ORDER CONFIRMATION
Whenever an order is executed, you will receive a Confirmation Contract Note by email, post or both,
depending on which you have selected as your preference. Confirmation Contract notes are generated
on the day of the trade, but may take longer to arrive, depending on the postal system or the Internet.
Up-to-date information on the status of your orders is available on the CommSec website at all times.
You can also choose to receive confirmation by email when orders are placed.
To set up email notifications, go to Portfolio > Accounts > View Or Edit Account Details from the
main navigation menu once you have logged into the website with your Client ID and password.
If you request a Confirmation Contract Note to be sent to you by post, a $1.95 fee will be charged in
addition to brokerage, for each Confirmation Contract Note posted to you.
PARTIALLY COMPLETED AND PURGED ORDERS
Your order may not be completely executed in a single transaction, if not enough shares are available at
your limit price, or there isn’t a buyer for all of the shares you want to sell. Part of your order will remain
on the market until it is executed or expires. If this happens, you will be charged the minimum applicable
brokerage for each transaction, unless subsequent transactions take the total value of your order over
the price threshold.
The ASX may purge (or cancel) outstanding orders for a number of reasons, for example if the price
moves too far from the limit, the basis of quotation changes, or trading is suspended on that share. If
this happens, the order details will appear in your Manage Order, Cancelled list with a notation “ASX has
purged your order. Reason: ASX purged”.
PAYMENTS AND OFFSETS
Settlement takes place two business days (T+2) after your order is partially or fully executed. Cleared
funds must be available in your nominated account at the start of the second business day after your
Buy order is executed. When you sell shares, the proceeds will be placed in your account overnight on
the second business day after the sale, and will be available to you on the next business day. When you
are logged in to CommSec, you can view your 'Estimated Settlements' on the home screen. This will
show the settlement amounts on your account that are due on the current and next day.
We will offset payments when you buy and sell shares on the same day or the next business day.
CommSec will transfer the net amount to or from your settlement account.
Commsec New Client Guide | 3
The following scenarios show when an offset applies:
OFFSET APPLIES
In the trade scenarios below, Anna can offset the sale against the purchase because she has sold on the
next business day after her purchase (T+1), and similarly for Brad he can offset the purchase against
the sale because he has purchased on the next business day after his sale (T+1).
In the scenarios below, the second trade is a lower value than the first trade. In instances where your
second trade is a higher value than your first trade, the residual amount after the trades have been
offset will be credited or debited to/from your nominated bank account two business days after the
higher value second trade.
Day Buy First Sell First
Monday Anna buys $10,000 worth of shares (T) Brad sells $8,000 worth of shares (T)
Tuesday Anna sells $7,000 worth of shares (T+1) Brad buys $5,000 worth of shares (T+1)
Wednesday Anna pays $3,000 (T+2)* Brad receives $3,000 (T+2)#
* You need to ensure that cleared funds are available in your nominated bank account by 8am on this day.
# Credited to your nominated bank account overnight.
NO OFFSET APPLIES
In the trade scenarios below, no offset applies because Anna’s sale is two business days after her
purchase, she pays for her purchase two business days after the trade (T+2) and then receives the
proceeds of her sale two business days after her sale.
Similar for Brad, no offset applies because Brad’s purchase is two business days after his sale. In that
case he receives the proceeds of his sale two business days after the trade (T+2) and then pays for his
purchase two business days after the trade.
There are instances where CommSec will not offset trades, for example trades with corporate actions,
deferred settlement dates or where shares have not been delivered to settle a sale.
Day Buy First Sell First
Monday Anna buys $10,000 worth of shares (T) Brad sells $8,000 worth of shares (T)
Tuesday
Wednesday Anna pays $10,000 (T+2)* Brad buys $5,000 worth of shares (T)
Anna sells $7,000 worth of shares (T) Brad receives $8,000 (T+2)#
Thursday
Friday Anna receives $7,000 for sale of shares Brad pays $5,000 (T+2 from purchase
(T+2 from sell date)# date)*
* You need to ensure that cleared funds are available in your nominated bank account by 8am on this day.
# Credited to your nominated bank account overnight.
4 | Commsec New Client Guide
If you do not make a payment for a trade by the settlement date shown on the Confirmation Contract
Note, you may be charged:
• Interest on the outstanding amount at the Commonwealth Bank Overdraft Interest Rate plus 3%,
calculated daily.
• A late settlement fee to cover our reasonable costs and expenses, as well as GST. Your CommSec
account may also be suspended. Failure to receive contract notes is not a valid reason for late
payment.
• Please note that your CommSec account may also be suspended due to multiple rejections.
SHARE PURCHASE PLANS
There is no system enforced protection for Share Purchase Plans (SPP). Clients who purchase shares
close to the record date should contact CommSec if they wish to participate in an SPP. Eligibility is
subject to receipt of payment by the client and delivery of stock by the selling broker.
Commsec New Client Guide | 5
We’re here
to help
To find out more, call us on 13 15 19, or visit our web site at [Link]
13 15 19
[Link]
MKTG485 (02/23)