A Simple Guide to Selling Shares in Australia

There is a wealth of information online about buying shares, but relatively little about selling shares. Understandably, this can be an issue for shareholders who are interested in selling their share portfolio but aren’t quite sure how to begin – maybe you’ve never done this before, or perhaps it was so long ago that you can’t quite remember what needs to be done. The media is no help in this regard either, with share sales often portrayed as a frantic process requiring a photographic memory and inside knowledge of the market. Fortunately, the reality is far simpler. Selling shares in Australia can be done quickly, affordably and with very little paperwork required.

What Kind of Broker Should I Use?

When it comes to selling shares in Australia, you have a choice of using either a full-service stockbroker or an online broker. Typically, a full-service broker will be someone that you will meet with in person. This is great if you’re hoping to ask a lot of questions, but the full-service package comes at a much higher price. Full-service brokers also have a reputation for looking down on “one-off share trades”, preferring to stick with big-money traders who are constantly buying and selling. This can make it difficult for “accidental” shareholders who may have inherited their shares or who only have a single share parcel to sell.

Online brokers are, as the name suggests, based online. Like most online platforms, this makes them generally faster and more convenient to use (no need to set up meetings and print out reams of paperwork). Unlike full-service brokers, most online brokers will welcome “one-off share trades” because this style of share trading is better suited to their business model. However, as with any online business, it pays to do your homework. Look for online brokers who have experienced staff that are easy to contact – if you have any questions about selling your shares you want to be able to pick up the phone and talk to an expert, not a call centre.

What Do I Need to Do to Sell My Shares?

Once you’ve decided on a reliable stockbroker, the process of selling your shares is relatively easy. You’ll just need to provide proof of your identity (so that it can be verified that you actually own the stocks you’re attempting sell) and details about your shares. Shares can usually be identified by either a Security Reference Number (SRN) or a Holder Identification Number (HIN), depending on whether you have Issuer sponsored or broker sponsored shares. Check your share Dividend Statement or Holding Statement to locate the unique identifying number – an SRN will have ten or eleven digits and start with an ‘I’, while a HIN will have ten digits and start with an ‘X’.

Once you’ve supplied your broker with these basic details and confirmed that you’re ready to go ahead with the sale, they will then take over the rest of the process. To begin with they’ll carry out an online identity check and check the share registry to confirm that all the information that you provided is correct. They can then move forward with selling your shares. If your shares are broker sponsored (ones that are held by another broker) then your new broker will first have to contact the sponsor and arrange for the shares to be released. The shares will then be sold for the best possible market rate.

Once completed, you should receive a notification confirming the sale and the total proceeds that will be forwarded to you. The Australian Securities Exchange (ASX) acts as a clearinghouse for all shares sold in Australia, with a standard settlement period of two business days (often referred to as T+2). This means that the sale will be finalised, and ownership of the shares transferred two business days after the trade took place.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.