Ann: Becoming a substantial holder - Form 603 , page-9

Lory

Sorry for the delay.

There are two types of markets that have evolved over the past few years and they have come about as the market participants themselves evolve as well, I know of at least three, these are;

1. Humans (you and I).
2. Quants or High Frequency Traders HFT's (identifiable by their inexplicable ability to instantly appear as sells or buys depending on the order type that humans place on to the ASX.
3. Time averaged orders.

The two types of markets that have arisen mainly in response to type 2 above are the old or original ASX and the new black pool.

Now without getting into the details humans used to operate only within the ASX platform, however with the advent of high frequently traders (HFT'S) the "humans" have broken into two main groups, those that continue to buy and sell on the ASX (most likely you and I) and those that conduct their business (mainly due to order size) in the black pool. This has happened because the HFT’s “get in the way” of those trying to buy or dispose of large lines of stock.

Describing the Blackpool is essentially a back office area where the larger custodian/investment banks can exchange large parcels of shares without the disruptive behaviour of the HFT's, they do so using the ASX as a guide to price. So in Greenland Minerals case where they have an abnormal amount of overseas shareholders that trade GGG, when buy and sell orders come in overnight these are all transacted in the custodian "back office" with any residual placed as a time averaged order that comes on throughout the day as 1 or more shares that is sold every unit of time so as to complete the order by COB and achieve the average weighted price. These are the continuous small buys and sells that can be seen throughout the day and can be complicated/confused if there are several of these orders as there are several custodians i.e Citibank JP Morgan HSBC etc etc etc etc.

I know this Lory because I receive a daily report of all share transactions in the company, for example on the 21st September we traded 3.7m shares, on the ASX however we traded 537,000. This is a pretty standard day.