Block Trade Facility (BTF)
For further information on the Block Trade Facility please refer to the ASX 24 Operating Rules Procedures and ASIC Market Integrity Rules (ASX 24 Market).
What is the Block Trade Facility (BTF)?
The Block Trade Facility (BTF) is an off-market trading facility, that enables market participants (or ASX 24 Participants on behalf of their clients) to bilaterally arrange transactions (e.g. via OTC negotiation).
Appropriately licensed wholesale market participants can directly negotiate Block Trades, however the orders must be registered through an ASX Clear (Futures) Participant.
Block Trades can be executed at any time. For Block Trades agreed within the normal Trading Day they must be registered within 10 minutes. For Block Trades agreed after hours they must be registered the next business day between 8:30am and 9:45am. Block Trades cannot be registered during the pre-open period i.e. between 9:45am and 10:00am on exchange business days.
The BTF may only be used to arrange and execute trades equal to and above pre-defined volume thresholds. The BTF threshold for all ASX Australian Electricity Futures and Options products is 25 lots. For example when executing a block trade, this requires a minimum of 25 lots for each quarter, not an aggregate across a strip.
Block Trade Facility - Summary Information
Trading Hours
Block Trades may be agreed at any time, except during the pre-open period (9:45 to 10:00am AEST).
Required Information
ASX 24 Participant(s) mnemonic (buyer and seller), contract, contract quarter(s)/strip(s), price (of individual legs), number of lots (each leg), time of trade agreement and name of individual authorised by the ASX 24 Participant(s) to submit Block Trades.
Trade Execution
A Participant-to-Participant transaction (cross transaction for a single Participant on behalf of 2 clients): For Block Trades agreed during the Trading Day - The ASX 24 Participant must notify the details of an agreed Block Trade within 5 minutes of agreement via the ASX 24 message facility. For Block Trades agreed out of hours - The ASX 24 Participant must notify the details of the agreed Block Trade the next business day between 8:30am and 9:45am.
The ASX 24 Participant must submit the Block Trade for registration in the ASX TradeAccept system within 10 minutes of this notification.
Trade Approval Process
Upon receipt of the Trade Registration Form, Exchange staff will validate the following:
1. The difference between the time of trade agreement (as per the ASX Trade24 message) and the time of receipt by the Exchange (as per the Trade Registration Form);
2. Whether the trade meets the minimum size threshold requirements for the prescribed contract(s);
3. The trading rights of the Participant(s);
4. The price of the contract(s).
Trade Publishing
Subject to validation, the Exchange will disseminate Block Trade information within 2 hours after the trade has been registered. Information disseminated by the Exchange will be in the form of contract, expiry month(s)/year(s), price, volume and time of trade.
Conditions of Trading
Participants may not aggregate separate orders to meet minimum threshold requirements. However, Participants may aggregate any orders greater than or equal to the minimum threshold. For example, if the minimum threshold is 25 lots, a buy order for 100 lots may be satisfied on the sell side by four 25 lot orders.
There are no explicit price limits attached to Block Trades. Block Trades may legitimately occur at prices different to the ASX 24 market price for the relevant contract at the time of trade agreement. Volume-Weighted Average-Price (VWAP) trading is therefore permitted via the BTF.
Existing Trading Rules
All trades executed pursuant to the Trading Rules for Block Trades will be deemed to have been made in accordance with the standard contractual and clearing structures of the market.
Minimum volume thresholds will be set on an individual contract basis and monitored with a view to maintaining a desirable balance between Block Trade business and that executed on-screen for any given contract. The current threshold is set at 25 lots for all ASX Australian Electricity Futures and Options Contracts.