SHARE PURCHASE T2
SHARE PURCHASE T2
Short-term Credit to Purchase of Shares
At AXON Securities we offer our clients the possibility of trading and investing in shares through the process of short-term credit. This process requires the creation of an investment margin account for the purpose of investing and trading in shares whose value may exceed the available cash balance in the account.
This process requires the signing of a contract between the client/investor and our company and includes interest on the credit provided – the team of AXON Securities is by your side every step of the way and we are available to explain every detail of this service.
- According to the current provisions, in the case of a cash transaction for the purchase of shares listed on the Athens Exchange, the member’s client must pay the purchase price to the member no later than the second business day following the establishment of the transaction (i.e. within the T+2 deadline). 4141/2013 and Decision No. 6/675/27-2-2014 of the Board of Directors of the Hellenic Capital Market Commission as in force, the payment of the price to the members of the exchange may not be made by post-dated cheques. If the payment of the purchase price of shares listed on the Stock Exchange is made with the proceeds of the sale of such shares, the purchase and sale of shares must have been executed at the same meeting of the Stock Exchange otherwise the payment of the price shall not be considered as due.
- If, even after the end of day T+2, the client has not paid in full the purchase price (including commission and other expenses) of all the shares purchased up to day T using the instruments referred to in the previous paragraph, then the member shall, no later than the next business day following the expiry of the market clearing time for the transaction (i.e. day T+3), sell the shares purchased on day T that have not been redeemed. Provided that on day T+3, the forced sales have fully covered the purchase price of shares (including commission and therefore expenses) that had been executed up to day T, the member may, on the same day T+3, enter into share purchase transactions on the stock exchange on the order of the client. In any case, the sale transactions must have been executed before the purchase transactions.
- The forced sale on day T+3 of shares by a member is an exceptional measure. Therefore, the repeated forced sale of shares on day T+3, which have been purchased on the order of the same principal (client) and have not been redeemed by day T+2 constitutes an indication of circumvention of article 10 of Law No. 4141/2013, the Decision No. 6/675/27-2-2014 of the Board of Directors of the Hellenic Capital Market Commission, as well as the Code of Conduct of the Securities and Exchange Commission. As a result, all Exchange members must take appropriate measures to ensure compliance with the provisions of the stock exchange legislation and may, indicatively, require the advance payment of the estimated purchase price, or refuse to carry out cash transactions on behalf of their principals who consistently violate their obligations to pay the purchase price of shares in due time.
- The attention of the members of the Exchange is specifically drawn to their obligation, when they accept and execute their clients’ orders for the purchase of securities without the clients having paid the purchase price in advance, to have taken all necessary measures to ensure compliance with the rule of Article 6 par. 1 of Law No. 1. 2396/1996, paragraphs 4.3. and 8.1.(c) of the Code of Conduct for Investment Firms
- When a member of the Exchange executes purchase orders for shares without prepayment of the price, it must take into account the characteristics of its specific client, the shares to which the purchase order relates, the size of the transaction, as well as the probable consequences of any forced sale of shares both in relation to the orderly operation of the market and in relation to the satisfaction of the claims of the SSE against its client, so as not to jeopardise the solvency and the smooth operation of the market. To ensure the above, the member must have adequate written operating procedures, corresponding internal control procedures, qualified staff and adequate computer support.
- In the event of a member’s obligation to effect a compulsory sale of shares, the member must take all measures that will enable it to fulfill its obligation to sell the purchased and unpaid shares (taking into account, inter alia, the time of the entry of the sale order and the price requested). In case there is an objective impossibility to sell the said shares throughout the meeting, the member is obliged to proceed to the sale of these shares on the next working day (according to the provisions of Article 26 paragraph 1 of law 3632/1928) until the full payment of the debt.
- The members of the Exchange that provide credits to the same client for a period equal to the period of clearing of stock exchange transactions, which is provided for in paragraph 1 of article 20 of Law no. 3632/1928 (i.e., according to the current applicable rules, for the period between T+2 and T+4, where T is the day on which the market transaction is executed), as well as for a period longer than this period, they must maintain two separate Credit Accounts per customer. The credit limit provided for in the PD/TE 2552/23.6.2004 is calculated cumulatively for both Credit Accounts. Therefore, the total amount of credit from the Member to each Customer may not (as currently applicable) exceed EUR 1 million.
- In the event that it has been agreed in the credit agreement between the Member and the Customer that the repayment of the credit is made within a period equal to the time limit for the settlement of stock exchange transactions provided for in paragraph 1 of Article 20 of Law no. 3632/1928, the credit is granted for a period of up to two working days, i.e. for a period equal to or less than the time limit for the settlement of stock exchange transactions. It is understood that the commencement of the credit shall take place upon payment of the purchase price of the shares by the Member for the purpose of clearing the stock exchange transaction and shall end upon payment of the credit. Therefore, the Client pays interest from the day the credit is granted, i.e. from the day the Member clears the relevant stock exchange transaction by disbursing from its own funds the price of the shares purchased, without the Client having yet paid the Member the full value of the shares.
- In order to comply with the obligation of paragraph 1 of Article 2 of the Decision of the Board of Directors of the Hellenic Capital Market Commission No.6/675/27-2-2014 as in force, a Security Portfolio is considered acceptable which consists of securities of at least three issuers and the value of any item included in it does not exceed 40% of its current value. The shares must not be under surveillance, suspension or other restriction on trading.
- The elements of the security portfolio are the exclusive property of the Customer, free from any burden and generally any third-party right. The freezing of the security portfolio elements requires an order from the Customer, except in the case of securities purchased with Credit. The release of security portfolio assets is only permitted if it is ensured that no margin shortfall is created or any existing margin shortfall is not increased.
The Security Portfolio is valued after the close of the current session using the closing prices of the trading day.
- The initial margin shall be set at a minimum of forty percent (40%) of the current value of the security portfolio.
- The percentage of the retained margin shall be set at a minimum of thirty percent (30%) of the current value of the security portfolio.
- If the margin becomes lower than the retained margin, the Company is obliged to require the Customer to cover the difference. Until the obligation to cover the retained margin is fulfilled, the Company will not make any other purchase of securities with Credit on behalf of the Customer.