Opening an account to trade warrants
Under ASX Market Rules, your broker must fulfil certain requirements before you can start investing in warrants.
Your adviser will ask you to:
- sign a Warrant Client Agreement form
- read the ASX booklet Understanding Trading and Investment Warrants
Warrant Client Agreement form
The Warrant Client Agreement form will be provided by your broker.
As part of the Warrant Client Agreement you acknowledge that:
- you have received and read the explanatory booklet Understanding Trading and Investment Warrants
- you are aware that a warrant has a limited life, and cannot be traded after its expiry date
- it is your responsibility to become aware of the terms of a warrant in which you choose to invest
- you are aware that ASX does not guarantee the viability of the issuer
Even if you have been trading shares through your broker for many years you will be required to sign a Client Agreement form before trading a warrant.
You are also required to sign a new Client Agreement form if you change to another broker for your warrant transactions.
‘Understanding Trading and Investment Warrants’ booklet
Prospective investors in warrants are required to read the explanatory booklet - 'Understanding Trading and Investment Warrants'.
Your adviser will supply you with a copy of this booklet. Alternatively you can contact ASX for a free copy, or you can download the booklet.
Understanding Trading and Investment Warrants (PDF 879KB)
Under ASX Market Rules a broker is required to make enquiries about their clients’ financial position. A broker must show due diligence in making reasonable enquiries to learn the client’s investment objectives, financial situation and particular needs, and maintain a record of this information.
Some brokers use a checklist approach although this is not mandatory.