The Australian Securities Exchange (ASX) recently announced that it would switch to a new trading hours regime on Monday, July 9. ASX has concluded that the new regime should not result in any material decrease in liquidity and is expected to reduce operational inefficiencies for the listed issuers and their brokers. Instead of having different start times for different markets, ASX has decided to implement a universal trading hours regime with common closing times. The new trading hours schedule is an attempt by ASX to simplify and standardize trading across all its markets so as to streamline operations and cut costs for listed companies. This article explains the reasons behind this change and what you need to know if you’re an investor or broker. Read this blog for information around what hours is the ASX open.
New Trading Hours for the ASX
The new trading hours for the ASX are:
● General Trading hours: 8:00am to 3:30pm
● Final Trading hours: 3:30pm to 9:00pm
Ex-Dividend Trading hours: 8:00am to 9:00pm
The ASX has made the following changes to the current trading hours:
– The Final Trading hours have been extended by two hours;
– The Ex-Dividend Trading hours have been extended by one hour.
Changes to the Current Trading Hours
The Current Trading hours are:
● General Trading hours: 9:00am to 4:00pm
● Final Trading hours: 2:00pm to 5:00pm
● Ex-Dividend Trading hours: 9:00am to 5:00pm
The Current Trading hours have been changed from the following:
– The General Trading hours have been brought forward by one hour;
– The Final Trading hours have been brought forward by two hours;
– The Ex-Dividend Trading hours have been brought forward by one hour.
Reasons for the Change
ASX has a market capitalization of about $1.8 trillion and is the largest equity market in Australia. It is also the most liquid Australian market and is the default listing venue for Australian companies. – There is a heavy trading volume in the last two hours of the trading day at the ASX, even though the equity markets in other countries are closed. – This is because many Australian companies do not close their books until the end of the trading day, causing the volumes in the last two hours of the trading day to be higher. – This poses a challenge to traditional trading because it is not ideal to have two or three times the average daily volume of trading taking place in a very short period of time.
Implications for Investors and Brokers
The new trading hours have been designed to have minimal impact on liquidity. The common closing time is expected to lead to more uniform liquidity across the day, which is likely to provide more trading opportunities for investors. – There is likely to be less “scaling” of orders in the final hour of trading at the ASX, which is expected to reduce the number of orders being scaled to a level that would not have resulted in a trade being executed. – This reduction in scaling is expected to provide better execution outcomes for investors. The new trading hours are also expected to improve the cost-effectiveness and efficiency of trading operations and reduce compliance costs for listed companies and their brokers. – The reduction in the number of orders being scaled in the final hour of trading is expected to reduce the number of failed executions that result from scaling. – The reduction in failed executions should also reduce the number of disputes between brokers and investors.
The new trading hours for the ASX is expected to reduce operational inefficiencies for the listed issuers and their brokers. The new trading hours should not result in any material decrease in liquidity and is expected to provide better execution outcomes for investors. It is important to note that while the ASX market will be opening earlier and closing later, the hours when the securities of individual companies are traded remain unchanged.