ASX has designed the new service to be as flexible as possible to offer a range of choices for product issuers. Product quotation prior to this service was a one-size-fits-all appraoch in terms of the elements of the ASX services a product really needed.
The new service provides the product issuer with the flexibility to select whether live trading in an open market is required. If not, the product manufacturer can choose not to trade in an open market but can still benefit from T+3 settlement of transactions via ASX CHESS. This flexibility is provided by the Quote Display Board.
AQUA Quotation Options
The Trading Market
The trading market provides a trading platform for on-market trading. In operational terms, the trading market operates on the ASX Trade platform with continuous matching of bids and offers and an opening and closing auction.
The Quote Display Board (QDB)
The new QDB is available for products that are either not suited to on-market trading or the product issuer does not want or need on-market trading. The QDB allows products and prices to be posted and off-market transactions to be settled in CHESS.
For example forward priced products may not be suitable to be 'traded' in a live secondary market. In this case indicative application and redemption prices for products can be quoted on the QDB. The product issuer has complete control to post and amend its prices and these prices cannot be traded against – they are indicative prices.
To use the QDB, the product issuer must establish a relationship with (or own) an ASX Market Participant , acting as their agent, to gain access to the QDB and the settlement facilities of CHESS. Any off-market transactions can then be routed to CHESS by the Participants on both sides of the transaction (the issuer's agent and another ASX Market / Trading Participant). Issuers may also decide to quote naturally illiquid products on the QDB, or poducts in which they do not wish to make markets.