difference between iau.to & iau.ax, page-9

flambouya, theonlysean and others who may be interested...

I queried this some time ago with a major discount broker after testing to see what happened if I tried such a trade (and getting an error message...surprise surprise)

The reply included the following...

"The ASX requires that investors maintain a minimum shareholding at all times of $500 (or $500 of the underlying), and if a holding balance falls below this amount the relevant share registry may sell a holding at their own discretion and issue a cheque for the proceeds to a client.

As a broker, our obligation to the ASX requires that your initial purchase be a minimum of $500 (or equivalent underlying), after which you may sell shares and thereby reduce your holding, or purchase additional shares in any amount you wish. It is up to the investor to maintain a marketable parcel after purchase."


So, why did I get the error message as I still had a marketable parcel after the trade? The reply included

"It was a business decision to enforce that if a buy trade is going to be placed on the internet, the minimum purchase must be $500 regardless of whether a client is already holding the minimum parcel amount.

With sell trades, the website will allow you to sell the full holding but if you leave an amount that is less than the minimum parcel or if the trade value is less than $500 (even if you are left with a minimum parcel) then you won't be able to place the trade."


So, to sum up,

in the BUY situation they have simply deemed a retail customer is not allowed to exercise a trade within ASX rules due to a 'business decision'!

and

in the SELL situation one must place the order by phone rather then the website....and you guessed it this incurs an additional $40.00 brokerage!

Do you get the impression that they don't want a level playing field in this regard :-), I mean really really don't want it!

So, where does this put the ASX argument that these BOT trades are not manipulative in nature.

I believe that;

1)enough people are fed up with this rubbish that there will be a push back against it, though like all the crap going on in the financial world it requires sheeple to get of the fat butts and get involved

and

2) the discount brokers need a good dose of scrutiny with their practices with trading

and

3) I'll also throw in that a review of discount broker practices relating to short selling should be undertaken. Note: I understand Financial Sense Newshour are putting together an expose of discount broking in the US in the near future, you can bet anything they come up with would also apply here in Australia.

Hope this provides an insight, and it does relate to IAU along with every other stock in the PM sector.