ASX Investing

After introducing the world of investing in our first resource, this module will dive into the specifics of getting started; from opening a brokerage account to using the order pad and the use of a share registry. ASX Investing Guide

How to Buy and Sell Shares?

If you have decided to take the jump into equities, there are many platforms to do so. We at Prophet generally like two options for the typical investor: Micro-investing (RAIZ) and CHESS sponsored brokers. Let’s explore both options.



  • No Minimum Capital Required
  • Easy To Use
  • Automatic Passive Investing


  • Limited Options and Flexibility
  • Relatively High Fees
  • Psychological Feeling of Accomplishment

RAIZ is the leading micro-investing platform in Australia. You can deposit small amounts of money and even nominate to round up any purchases you make on your card to invest into RAIZ. RAIZ has an effective model with low charges and no brokerage (no charge when you buy and sell).

The downfall of micro-investing is obviously the limited options and flexibility. Micro-investing can be a good starting point and introduction to equities but is very limited. Although the fees are reasonable for most providers direct owner-ship is often cheaper priced.

Micro-Investing as the name implies is also investing on the small scale. Investing a few dollars into equities is basically pointless. The returns most investors will make from micro-investing is pocket money. The act of micro-investing can give them a feeling of accomplishment. This can lead to being complacent.

CHESS Sponsored brokers:


  • Direct Ownership
  • Flexibility
  • Access to Countless Financial Products


  • Minimum Parcell size of $500 for ASX investing
  • Can be a bit tricky when first starting

CHESS-sponsored brokers are how you can select and trade in equities and a range of asset classes. Setting up an account is straightforward and similar to setting up a normal bank account. Follow the prompts and provide identification information when asked.

Prophets Trusted Affiliate Partner

CHESS sponsored means the shares are registered with the stockbroker, they will give you a HIN holder identification number. This is used to identify you and the shares you own. These brokers generally will register your shares for you with a share registry (such as Computershare and link market services) this means little administration is required on your part after hitting “buy” or “sell”.

We recommend CHESS sponsored for this reason and it means that you are the owner of what you purchase. Most investors should generally stay clear of other brokerage services. As we explore later on custodian model brokers can have a few extra risks.


ASX Investing

The Australian Security Exchange is the major security exchange in Australia, controlling around 80% of trades. Today the ASX is a publicly held company valued at $15.7 billion. The ASX is the resultant amalgamation of each of the six states’ separate stock exchanges in 1987, originally run by pen-and-paper and chalkboards. In 2006 it also merged with the Sydney Futures Exchange. The stock exchange is the utilized marketplace for trading securities.

Typical investors have no direct dealings with the ASX, their broker will have dealings with the exchanges to facilitate the trading of securities on behalf of the investors.

The Chi-X

ASX Investing

The Chi-X is another stock market that allows the trading of Australian financial products. In effect just like the ASX they are a market that your broker will use to execute trades of securities. Due to their size, they are less talked about than the ASX.

They have grown strongly from its launch in October 2011 to have achieved over 20% market share and trade over $3.8 billion a day in cash equities.

Knowing the specifics of each exchange isn’t essential since the average investor will have no direct dealings with the exchange. Instead, when purchasing shares through your broker, they will execute a trade via either exchange to get the best possible price. For this reason, you may notice either ASX or CHI-X on order confirmations.

To see if your broker is an authorized participant of the CHI-X you can have a look at this list. Note that some of the smaller brokers such as SelfWelth use Open Markets as their Authorised Participants.

What is a Stockbroker?

Brokers are how you can select and trade in equities and a range of asset classes. A stockbroker is a regulated representative who enables the buying and selling of securities from the financial markets on the client’s behalf

There are three main types of stockbrokers:

Online Brokers

Online Brokers are exactly that. They are an online platform that allows you to buy and sell securities. They are the cheapest of the three options and are usually priced per trade. This fee is called the brokerage fee.

These services charge brokerage which is a fee for every time you buy and sell a share, in Australia, this usually ranges from $9.50 to $20 depending on the size of the investment.

You can check out pearler here:

Using these online platforms you can search financial instruments around the world and execute trades freely. Online brokers are by far the most common way for people to get investing.

We use online brokers.

Full-Service Brokers

Full-Service Brokerage accounts offer a range of financial and accounting services to facilitate individual’s investment goals. These firms charge high commissions or a percentage of assets.

Clients are often allocated a personal broker who helps them to facilitate their trades and finances.

Discount Brokers

Discount stockbrokers are a similar approach to Full-service brokers. They also facilitate a client in getting investing in financial products but offer a less comprehensive service, at a reduced rate.

Which Brokerage Account to Pick?

First Pick Your Type: Online, Full Service, Discount

First of all, you have to identify which type works for you. Think about your investment goals, knowledge, amount, and how often you are looking to invest.

If you’re new to investing and have been given a large sum to invest, then maybe having someone in your corner to show you the way is the best idea. A good Full-Service Broker can walk you through a range of options, discuss your goals, finances, and taxes and find the right investment personalized to you.

For the majority of people, an Online Broker is usually the right option. Most people prefer this option as it gives them the low-cost flexibility to take control of their investing. It can be a great option for short-term trading, long-term investing, investing lump sums, or getting started with smaller amounts. With online brokers offering a massive range of financial products there are many options for investors.

Picking the Right Online Broker For You

This is the step I see a lot of people getting stuck on. The key here is don’t overthink it. We often have people asking us who to pick as there as so many options.

The key here is don’t overthink it

The answer is simple. If you bank with any of the big 4 banks, they offer a brokerage service all of which work well. That is Nabtrade, Commsec, Westpac Share Trading, ANZ share Investing. Other names you’ll hear are Selfwealth and Pearler, both are great options. Here’s our list of the Best Share Trading Platforms in 2021.

Picking the Right Online Broker Checklist

When Looking for the right broker for you ask yourself these questions:

Prophets Trusted Affiliate Partner
  • What financial products do I need?
    • Shares, ETFs, ETOs, Bonds, mFunds, Derivatives
  • Am I looking to buy international shares?
  • What sort of research am I looking for?
    • basic stock statistics, fundamental and technical data, research recommendations
  • Does the broker have a good website and mobile app?
  • Do they have reasonable fees?

Investopedia has a good resource to help you analyze your choices.

One thing I would recommend here is sticking to a CHESS-sponsored brokerage. Basically, this means when you buy a share you own it. All the services we listed before are CHESS sponsored. If you’re not sure if a service is just google it, or check out our complete list of CHESS Sponsored brokers.

CHESS Sponsored VS Issuer Sponsored Shares (HIN and SRN), and Custodian Ownership

When you purchase shares through a broker those shares may either be held under CHESS Sponsorship or a Custodian Model. There are a few differences between each model, and we have always used and recommended CHESS Sponsored brokers over Custodian Model Brokers. To see if your broker is CHESS Sponsored check out this list. Some shares may also be Issuer Sponsored.

CHESS Sponsored


  • Direct Ownership
  • Third-Party Verification
  • All Holdings under one number
  • Details Easily Updated
  • Peace of Mind and Security


  • Slightly Higher Fees

CHESS (Clearing House Electronic Subregister System) is created by the ASX and serves two main functions:

  • Facilitating share settlements – CHESS usually settles a trade 3 days (T+2) after a buyer and seller agree to trade by arranging the transfer of money between the buyer and seller. It also transfers legal ownership of the shares at this time.
  • Registering share ownership – CHESS is also a subregister that the ASX maintains which keeps track of who owns what shares.

When buying shares through a CHESS Sponsored broker it means the ASX has a record of you owning those shares directly. When you join one of these brokers you get given a HIN (Holder Identification Number), and the shares are then attached to you, via that number. You can have multiple numbers at multiple online brokers.

When you hold shares through a CHESS Sponsored broker it means YOU own them directly, rather than someone else holding them on your behalf. Some other brokers, operate under a custodian model, meaning that THEY hold the shares on your behalf.

Prophets Trusted Affiliate Partner

There is a lot of misinformation on the internet about CHESS-sponsored brokers with many trading platforms pretending to be CHESS sponsored. This makes it difficult to find the right platform.

Here’s a list of CHESS Sponsored Brokers.

Issuer Sponsored

Issuer Sponsored Shares are shares that are sponsored by the company that issued the shares, not a broker. Shares that are not purchased through a broker will often be Issuer Sponsored. This is often the model for Employee share plans. direct IPOs or shares that were purchased a long time ago.

For Issuer Sponsored shares you will be allocated an SRN Security Reference Number, which will be used to identify your holdings. You will be allocated a unique SRN for all holdings.

You manage your Issuer Sponsored holdings directly with the relevant share registry that is allocated to that holding (usually Computershare or Link Market Services). Through the share registry, you change and update all relevant personal information for each holding such as name, address, TFN. To look up the share registry, use this tool.

For CHESS-sponsored holdings, you can update this information directly through your broker.

You can sell your holdings directly through the share registry or you can first transfer them to a broker to execute the trade.

Keeping a hold of your SRN is very important to allow trading. If you’ve misplaced the SRN for a parcel of shares check out our guide here.

Custodian Ownership Brokers


  • Slighly Cheaper Trading
  • Immediate Settlement potentials
  • Posibility for fractional shares


  • Non-Direct Ownership
  • Riskier
  • Loss of Voting Rights
  • Loss of Dividend Reinvestment Plans

A lot of Australian brokers operate under a custodial model. Examples include IG, Interactive brokers, and micro-investing platforms.

This means the broker holds the shares on your behalf. You have rights to your assets and can withdraw them. The securities are often held in trust with other investor’s holdings. The third party keeps a log of who has ownership of the shares.

With many of the big-name custodian brokers, holding your shares in their trust can be quite safe and this model is used in many international markets. However, it isn’t as simple or safe as holding the shares yourself. If these brokers go bankrupt the ownership isn’t quite as clear. It also means these brokers can have control over your shares. We have seen situations of brokers forcing investors to sell their shares and blocking the trading of certain shares on their platform.

Since you also don’t have direct ownership of these shares it means you lose your voting rights. And although you will still be credited a dividend you may not be able to participate in a Dividend Reinvestment Plan (DRIP)

What Is A HIN/SRN Number?

When you create an account with a broker, you are allocated a ‘Holder Identification Number’ or ‘HIN’. This number identifies you as a CHESS-sponsored shareholder. You can have multiple holdings under a single HIN, and even have multiple HINs under one name. Source: Selfwealth

HIN (Holder Identification Number) or SRN (Security Reference Number) can have up to 12 characters, usually starting with an ‘X’, ‘I’ or ‘C’ followed by up to 11 digit number, for example, ‘X00012345678’ or ‘X12345678’. Your HIN/SRN is used to identify you as the owner of your securities and should be stored securely.

The HIN or SRN can be found on the top right-hand corner of your holding statement and other shareholder communications.

  • HIN, being Broker sponsored, commences with an ‘X’
  • An SRN, being Issuer sponsored, commences with an ‘I’ or ‘C’

How to Open A Brokerage Account

Opening an online brokerage account is very easy. The process is much like setting up a bank account. It can all be completed online.

To get set up head over to the website and choose to sign up. First, you select what sort of account you’d like to set up i.e. Individual, Joint, Company, Cash Account, or Margin Lending. An Individual Cash Account is set up for most people unless you wanted to borrow to buy shares.

You then enter your personal details and confirm your identity and that’s it. It’s that simple. Most sites will walk you through the process and have customer support in case you get stuck.

The whole process takes about 10 minutes.

Can I Have Multiple Brokerage Accounts?

Yes. Investors can open multiple brokerage accounts. This is a strategy we have seen amongst many investors who want the high-quality research afforded by Brokerages such as Nabtrade and Commsec while allowing them to trade with the low fees of Pearler or Selfwealth.

If you’re doing this just be cautious that your brokerage account does not have an inactivity fee.

Doing this will give you two separate HIN numbers for each broker.

What To Buy

As a beginner, it can be overwhelming with all the shares and equities to buy. A good place to begin is to start consuming all forms of media. Read some quality articles about companies. Read some articles about selecting stocks and investing.

Interpret your everyday life and think about companies that you know. Check if these companies are publicly listed. This can be a good place to get some companies in mind. Then investigate some of the fundamentals of the company.

One of the rules that I now personally follow is not to invest in any company that I don’t know and that I don’t understand. So many people seem to jump into small speculative companies. But ask yourself what sort of company you would like to own. If you’re not willing to own the whole company, don’t buy its shares.

A good place that I started was by printing out a list of the ASX 200 companies, that is the 200 biggest publicly listed companies. I then highlighted all the ones I recognized and conducted further research from there.

If you’re still struggling with this step check out our next article in the series, or our stock DD checklist here;

The Ultimate Stock DD Checklist For Beginners

How to Buy Your First Share

Now you’ve created your brokerage account, have a share in mind, and are looking to press BUY, how do you do it?

After you’ve set up your brokerage account you can transfer money to the account in order to purchase securities. This is done just like any other bank account. Grab your BSB and account number to fund your account and simply transfer the money across. There may be a bit of a delay, which is standard for bank transfers. This may take 1-3 days.

After your account is funded you’re now ready to buy.

When you log in to your brokerage you will be taken to the dashboard, which gives you a quick overview of your account and portfolio:

Using your brokerage account search for the security of your choice by entering the ticker code (3 digit ID) or name of the stock into the search bar. You can only trade during the opening hours of the stock market.

ASX Normal Trading takes place from 10:00 am to 4:00 pm, Sydney time. There are also some public holidays where the market is closed. I have attached a table of these below.

ASX Normal Trading takes place from 10:00 am to 4:00 pm, Sydney time.

The vast majority of trades take place during Normal Trading.

From the home page of our brokerage account we simply choose to invest to begin looking at shares:

Searching the stock will bring up the profile of the company where you can view basic information about the company and execute your trade.

From here there will be an option to buy or sell. Selecting this will bring up the order pad.

You can check out pearler here:

ASX Public Holidays:

Public HolidayDates for 2021Trading Day
New Year’s DayFriday 1 JanuaryCLOSED
Australia DayTuesday 26 JanuaryCLOSED
Good FridayFriday 2 AprilCLOSED
Easter MondayMonday 5 AprilCLOSED
ANZAC DaySunday 25 AprilCLOSED
Queen’s BirthdayMonday 14 JuneCLOSED
Last Business Day before Christmas DayFriday 24 DecemberCLOSE EARLY
Christmas DayMonday 27 December CLOSED
Boxing DayTuesday 28 December CLOSED
Last Business Day of the YearFriday 31 DecemberCLOSE EARLY
Source, ASX

Using and Understanding The Order Pad

The order pad allows you to place and customize your trade order. Here you fill in the details such as the amount of shares to buy (in units or dollars) and price to buy at (limit, or at market).

  • Limit
    • allows you to set a limit to buy/sell at, this amount won’t necessarily occur so your order may not go through.
  • At market
    • will place a trade at the current market value of the shares, these are generally executed immediately.
  • Duration
    • Good Till Cancelled, Good For Day, Good Till Date. These allow you to set a time frame to keep the trade open till, incase it isn’t settled immediately.

After buying/selling, the brokerage service will give you a confirmation letter detailing the transaction. After two days the shares will be legally transferred to your title this period is called T+2. At this time, they will be registered to you by the share registry, and you should receive a holding statement at the end month from the share registry- an example CHESS holding statement is seen below.

Stop Loss:

A stop-loss or stop-loss orders are another type of conditional order like limit buy orders. In this case, the condition is that the sale will be executed when the share price falls below a set amount.

It may be used as a strategy to stop further losses from accumulating but should be used with caution. In times of reduced liquidity, that is times where there are not many buyers, a sudden fall in share price may result in the share being sold far below the value you intended. These options are slightly more advanced and are not offered by all brokerages.

Settlement T+2

T+2 settlement is a standard process that applies to all Australian sharemarket trades. When you buy or sell securities, there are two key dates:

  1. The trade date (known as T) – the date when your order trades on the market.
  2. The settlement date (known as T+2) – when money is exchanged for ownership of the investment. T+2 means the trade date plus two business days.

When you buy shares or other securities, there must be enough money in your settlement account on the second business day after your order has been traded. The second business day is when the account is debited to settle the transaction.

When you sell shares, money will be deposited from the sale into your account on the second business day after the trade.

So for example, if you buy shares on a Monday, settlement will happen on Wednesday.

If you sell shares on a Friday, settlement will happen on the following Tuesday (because Saturday and Sunday don’t count as business days).

When you make a purchase, the securities you’ve bought will be added to your portfolio on the trade date. But the money won’t be debited from your settlement account until the settlement date, two business days later.

Source, CommSec

Share Registries

Share registries keep track of and provide communication to shareholders. In Australia, there are two main providers: Computershare, and Link market services, both of which are listed companies themselves.

Particular companies on the ASX will pick either of these companies or their competitors to manage all of their shareholders registry requirements.

Share registries simply provide secure records of client’s security holdings, they keep track of who owns what. This is all automatically done for you if you used a good quality CHESS-sponsored broker (like Nabtade and Commsec).

The registry will manage your holding reports, dividends, CHESS statements, and address information. You may choose to set up an account with the share registry to manage all your holdings at once, alternatively, you can do it for all your individual shares without having an account.

The share registry will generally obtain all your important information (such as address, and tax file number) from your broker, but it is important to check and updated it with both your broker and registry when needed.

From the share registry, you can view all your past and present holdings, any documents released by the company, dividend statements, and also importantly you may elect to have your dividends reinvested with the company (DRIP as discussed earlier)

Share Account Keeping

CHESS Holding Statement

A CHESS Holding Statement shows the opening and closing holding balances of the holding for the statement period as well as listing any CHESS transactions that have occurred. Statements are issued directly by ASX Settlement on behalf of each company. Separate statements are issued for each security.

On this statement, we can also check out personal details and retrieve our HIN.

Down the bottom right of the page, we can see the share registrar accountable for that listed company.

Remember your HIN is confidential and should be treated like a bank account number.

Can I elect to get my CHESS Holding Statement Online?

No. This is frustrating but there is currently no way to get an electronic copy of a CHESS Holding Statements. These documents are mailed out to all Investors

When Do I Get a CHESS Holding Statement?

CHESS holding statements are issued by ASX and if you have made any transactions or changes to your CHESS account, you should be receiving a CHESS holding statement in the following month, generally in the second or third week. If you want to know the status of your CHESS holding statement, please contact your broker. 

Whenever you make a transaction or changes to your CHESS holding account, ASX will generate a confirmation letter that will be sent to your postal address. 

Some of the types of notices you may receive include:

  • Change of name and/or address
  • Change of sponsor
  • Takeover offer acceptance
  • Buyback offer acceptance
  • Collateral reservation.

Source, ASX

New CHESS Holder Statement

These statements are set out when you initially set up your brokerage account. This document allocated you a HIN (Holder Identification Number) which is used to identify you and your holdings with that broker. On this form we can check all our personal details are correct.

This document should be kept in safekeeping. All information is confidential.

Welcome To Prophet Invest

Over this 10-part series, we will show you everything we have learned about ASX investing for beginners.

We are two brothers from Brisbane Australia, who started investing as soon as we were legally able to open a brokerage account. We have had some very good years and a few lessons.

Prophet Invest has the mission to share our thoughts with millions of people on all things shares, crypto, wealth, and property.

A lot of the information from this series was inspired by our best-selling eBook, available on special now.

Please Remember all Articles Published on Prophet Invest are Opinion Only

Learn How We Analyze A Company:

The Ultimate Stock DD Checklist For Beginners

What Are We Currently Buying?

In the past few weeks here’s some exciting companies we jumped in on:

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