Geneva Finance - GFL

[percy]

The NZX has allowed this since trading began. There is a very good reason. If you are a broker and have a client with a large parcel of shares to sell, (or buy) you don't want to show your hand by putting them all up for sale. I get that.

If you also have a buyer for this stock, then it makes sense for you the broker, to match the buys and sells. If you don't have a buyer, then you will have to sell them on market (if your client wants the stock sold).

This practice goes on on the USX as well, and I think it is more prevalent on the USX than on the NZX as a percentage of trades. (less brokers deal on the USX so this holds).

I would have some sympathy for your argument if the trades were crossed outside the quotes but if they are not, then I don't see what the issue is? If you want some stock, you need to bid for it. If the seller does not like your price, or is not motivated enough to sell to you, then its incumbent on you to bid higher. (that's why the NZX has the rule that crossings have to be completed between quotes).

I repet.It seldom happens on USX.
I have been honest and shown I am a buyer at that price.
Broker in my opinion is being dishonest not showing the price he will sell at.
Back room market is not an open honest market.
It has happened far too often on NZX when I have been the highest bidder for stock.
Had the seller shown his hand I would have had the opportunity to decide whether to buy or not.
In most cases I would have paid the price the shares were traded at in house.

[Oliver Mander]

I repet.It seldom happens on USX.
I have been honest and shown I am a buyer at that price.
Broker in my opinion is being dishonest not showing the price he will sell at.
Back room market is not an open honest market.
It has happened far too often on NZX when I have been the highest bidder for stock.
Had the seller shown his hand I would have had the opportunity to decide whether to buy or not.
In most cases I would have paid the price the shares were traded at in house.

Interesting discussion.
Percy, NZX has been concerned about the number of off-market trades for some time. They recently launched NZX Dark, which is a mechanism encouraging off-market trades matched within broker houses (as per blackcap's comment) to be brought into the wider market. It's anonymous (hence 'dark'), with bids/asks automatically matching at the mid-point. So, does not show up on market depth - but the trades themselves DO show up on the trading list. The idea is to get away from the "back room" dealing you refer to, so trades become transparent. The equivalent of NZX Dark also exists on the ASX, SGX, LSE etc - back-room dealing is not just an NZX issue.

In terms of whether or not it happens on USX, I suspect no-one really knows (except the USX market administrators). But as a wholesale investor market, one would expect a higher probability of off-market trades.

When you sign up to trade on USX, you're recognising the weaker investor protections that go with that market; as per their own disclaimer (emphasis is mine):

"USX itself is not a licensed financial product market. Unlisted is a financial product market that operates pursuant to an exemption from subpart 7 of Part 5 of the Financial Markets Conduct Act 2013 (the Act). Investors trading in securities quoted on Unlisted trade at their own risk and do not have the protections provided by Part 5 of the Financial Markets Conduct Act 2013, in relation to: insider trading, market manipulation, continuous disclosure, substantial holding disclosure, relevant interest disclosures, and the monitoring of market obligations by the Financial Markets Authority.

[blackcap]

In most cases I would have paid the price the shares were traded at in house.

would you have paid a higher price though?

Why should the broker deny their own client access to another of their clients stock just because rules. Back in my day, we were always told to look out for potential crossings.

As a broker you are only shooting yourself in the foot by not completing a crossing, and also not doing your own clients justice as they will miss out on the buy side.

I do understand your concerns about transparency, and hence Oliver's comments about dark markets are possibly a good thing going forward.

[percy]

Interesting discussion.
Percy, NZX has been concerned about the number of off-market trades for some time. They recently launched NZX Dark, which is a mechanism encouraging off-market trades matched within broker houses (as per blackcap's comment) to be brought into the wider market. It's anonymous (hence 'dark'), with bids/asks automatically matching at the mid-point. So, does not show up on market depth - but the trades themselves DO show up on the trading list. The idea is to get away from the "back room" dealing you refer to, so trades become transparent. The equivalent of NZX Dark also exists on the ASX, SGX, LSE etc - back-room dealing is not just an NZX issue.

In terms of whether or not it happens on USX, I suspect no-one really knows (except the USX market administrators). But as a wholesale investor market, one would expect a higher probability of off-market trades.

When you sign up to trade on USX, you're recognising the weaker investor protections that go with that market; as per their own disclaimer (emphasis is mine):

"USX itself is not a licensed financial product market. Unlisted is a financial product market that operates pursuant to an exemption from subpart 7 of Part 5 of the Financial Markets Conduct Act 2013 (the Act). Investors trading in securities quoted on Unlisted trade at their own risk and do not have the protections provided by Part 5 of the Financial Markets Conduct Act 2013, in relation to: insider trading, market manipulation, continuous disclosure, substantial holding disclosure, relevant interest disclosures, and the monitoring of market obligations by the Financial Markets Authority.

Oliver thank you for your reply.
However I have seldom seen off market trades on USX.[Yes I have seen it there]
It appears to be more honest market than NZX.
I have traded shares NZX,ASX and USX for some time [57 years],so have some idea of what I am talking about.
Whenever I have had over 500,000 shares to sell in a company Craigs have off loaded them in 50,000 lots.
OK they have not shown the volume I am selling,but they have always quoted the price.
I think NZX should at least insist on the sell price being shown.

[Oliver Mander]

Oliver thank you for your reply.
However I have seldom seen off market trades on USX.
It appears to be more honest market than NZX.
I have traded shares NZX,ASX and USX for some time [57 years],so have some idea of what I am talking about.
Whenever I have had over 500,000 shares to sell in a company Craigs have off loaded them in 50,000 lots.
OK they have not shown the volume I am selling,but they have always quoted the price.
I think NZX should at least insist on the sell price being shown.

If they go through NZX Dark, it shows the transacted price. Clearly, if its off-market, you don't see anything (same in any market).
USX - I think the issue is that no-one knows because no-one is obligated to tell anyone anything. At an objective level, it's hard to argue that that USX is a more transparent market than NZX - given their own disclaimer, the lack of oversight from thre FMA and the lack of enforcement actions. Please don't take this as questioning your experience - it's just an objective statement. The experience for individuals may be different.

[percy]

If they go through NZX Dark, it shows the transacted price. Clearly, if its off-market, you don't see anything (same in any market).
USX - I think the issue is that no-one knows because no-one is obligated to tell anyone anything. At an objective level, it's hard to argue that that USX is a more transparent market than NZX - given their own disclaimer, the lack of oversight from thre FMA and the lack of enforcement actions. Please don't take this as questioning your experience - it's just an objective statement. The experience for individuals may be different.

Yes I can only go by my experience.
USX has proved to be excellent for me.
An open honest market

ps.I am pleased NZSA is covering USX.
Good on you.

pps.Two out of three of my largest holdings are listed on USX.