Changes to the Australian Stock Market
On 31 October this year Chi-X will enter the Australian stock market providing an alternate market to the ASX. Chi-X will initially offer trading in the biggest and most liquid listed securities on the Australian market and gradually cover the whole market over time. It is anticipated that ASX will also launch a second trading service called PureMatch in November 2011.
Baker Young executes market transactions via the widely used IRESS system. IRESS currently offers ASX markets and will also offer Chi-X markets. We will continue to deal through ASX markets via IRESS while we closely monitor the performance of other trading services and markets as they become available. Baker Young consider it appropriate at this time to execute trades on a price-time priority basis solely with ASX TradeMatch, the main financial market operated by the ASX.
As an ASX Market Participant, Baker Young is required to handle and execute your orders in accordance with the Australian Securities and Investments Commission Market Integrity Rules. These rules include a best execution obligation which means Baker Young must take reasonable steps to achieve the best outcome for you when executing your orders and explain how it will achieve this.
We are committed to our obligation to provide you with best execution services when handling and executing your orders.
What is “Best Execution”?
Best Execution means that when handling and executing your order Baker Young must take reasonable steps to obtain the best possible price and best total consideration for you after taking into account your instructions.
Best total consideration means:
· for a buy order, the purchase price (i.e. price x volume) paid plus transaction costs: and
· for a sell order, the sale price (i.e. price x volume) received less transaction costs.
Baker Young may take into account other implicit costs such as the likelihood of execution or liquidity and the direct and indirect costs of accessing alternative financial markets in assessing the best total consideration.
Where you provide specific instructions to us you should be aware that you may not obtain best execution.
Best execution may be achieved by using our systems and skills to buy and sell stock at the best price available in the market. Your instructions may affect this if you instruct us to buy or sell a given number of securities at or up to a specific price or may be affected by your specific instruction to buy or sell a given amount of securities at market price available at the time rather than at a specific price or price limit.
Baker Young may accept your order to buy and sell securities by telephone, email, fax or post and your instructions and orders are dealt with in accordance with Baker Young’s Terms and Conditions.
Baker Young will generally give price a higher importance than other factors, including the circumstances of the order, the need for timely execution, market liquidity and potential price impact. Your order will be transmitted to the ASX TradeMatch order book as soon as reasonably practical after taking into account your instructions, and we will take reasonable steps to obtain the best price available in the market. Your instructions in relation to orders must be clear and unambiguous.
What if I am a “Wholesale Client”?
If you are a “wholesale client” you may provide a standing instruction to us relating to how you wish your orders to be managed. Including a request that best execution not apply to you as other outcomes such as speed, likelihood of execution and other considerations are required.
Any standing instruction must be reviewed and renewed at least annually to ensure the instructions remain relevant.
Will There be any Change to me?
In practice, the way your orders are executed may not change. We will maintain full access to the IRESS system and the ASX market in the same manner as has been the case in the past.
Baker Young have 12 months from 31 October to add participation in Chi-X and other trading services to further meet our best execution obligations. We will meet that time frame and likely add Chi-X and other trading service at an earlier date.
We will provide you with advance notice of our transition to new ASX and Chi-X markets and what this may mean for you and your trades well before any changes occur.
Baker Young values you as a client and are committed to providing quality advice and services in dealing with you.
Baker Young will review this disclosure statement as required and notify you of any material changes.