OTC: Not formalized
Money Market: T+1
Private transactions are permitted between consenting parties. The NZX is the only formal market.
Trading hours: Monday to Friday: Not formalized
Book-Entry: Securities held at NZCSD are un-certificated, registered in NZCSD’s name. Securities are deposited into FASTER by the selling broker. On settlement date, the buyer confirms the availability of shares in a blocked account and remits payment to the seller. The securities are then released to the buyer.
New Zealand Exchange Ltd (NZX) transactions are settled on a rolling T+3 business days’ basis. A fixed settlement period of T+3 applies to all trades of NZD100,000 or above. Trades under NZD100,000 are settled as soon as possible, to a maximum of T+3. For off-market trades, the buyer and seller may agree on any settlement date.
Trade date (T) – The broker executes the trade via the FASTER and sends contract notes to its clients to confirm the trade.
T+1 to T+2 – The client sends a settlement instruction to their custodian, who pre-matches it with the counter-party via telephone. It is market practice for the seller’s agent to initiate pre-matching. All unmatched trades are notified to the client immediately and the status is updated daily until the trade is settled fully or canceled by the client.
T+3 or S – Trades are settled throughout the day via the Austraclear System with simultaneous and irrevocable exchange of NZD funds and securities on a gross basis.
New Zealand – Transaction flow.pdf
Book-Entry: Registration for NZCSD eligible securities is automatic on SD. Sub-accounting is maintained by the sub-custodian.
Austraclear trades follow BIS Model 1 – a system in which there is a simultaneous transfer of securities and associated funds from the buyer to the seller. All transfers occur on a trade-by-trade (gross) basis with all transfers made via book entry. All transfers are final.