Buying and selling on the secondary market

Buying and selling transferable shares and bonds is slightly more complicated than for other kinds of investments. The Ethex match-bargain service is designed to make this process easier to manage.


Transferable shares and bonds can be bought and sold through the Ethex secondary market, giving you an opportunity to invest even when there is no primary offer. You can buy transferable shares and bonds when there is someone who wants to sell, and vice versa, and where you can agree on the price. You can see what is available at any one time by looking at the latest prices tab for each investment product.

Here’s how to buy or sell on the Ethex secondary market in three simple steps:

1. Decide the volume and price

As the price of transferable shares and bonds varies, you will need to decide on the price you are prepared to buy or sell at. There is a lot of information on Ethex to help you with that via both the latest prices tab and the product details tab (links can be found at the foot of this page).

If you choose to buy or sell at one of the prices shown, we will be able to match you straight away. Alternatively, you can offer to sell or buy at a different price that isn’t shown, and wait and see if someone is prepared to trade with you at your offer price. It is not possible to say how long that will take.

The highest buy and the lowest sell offers will automatically go to the front of the queue. If you offer the same price as an existing offer, the original offer is first in the queue.

Some factors you may want to consider when making your decision about what price to offer:

  • The dividends and interest policy – What is the business is aiming to achieve?
  • The historic returns - How much has actually been paid to investors in the past? Does it look as if this will continue?
  • The prices and volumes graph - Has the trade price been going up or down?
  • The price of the most recent trades – Are you looking to get a similar price?
  • Other open offers to buy and sell – What is the level of demand for the product?

2. Placing an order

Before placing an order, make sure you have the following information to hand as we won’t be able to complete your order without it.

  • The number of bonds or shares you want to sell or buy
  • The price you want to buy or sell at
  • If selling, your share or bond certificate numbers. We will need to check these against the register, and you will need to send us your certificate to complete the transaction. If you have lost it, you will need to obtain a new one before placing an order.

To buy, click the Buy Online button. To sell, fill in the linked form that can be found in the first section of the latest prices page for each product.

We will then send you a confirmation, which will include details of any fees or stamp duty. Until you are matched you are free to change the details of your order, which may affect its place in the queue, or cancel it altogether. Once you are matched you are obligated to proceed with the trade.

3. Matching and Settlement

If there is a match, your order will be fulfilled immediately, or if not, it will be placed in the queue and published on the website. Once we have a match for your order, we will contact you to complete, or “settle”, the transaction. This includes sending the seller a stock transfer certificate to complete and asking the buyer to transfer the funds. Settlement normally takes two to six weeks.

It is not in keeping with our policies to hold certificates on behalf of investors. Therefore, if we are only able to match part of your order we will return your certificate to you until the rest of the order can be completed.

Safety and confidentiality

We will keep the names and contact details of buyers and sellers anonymous at all times. All share certificates, bond certificates and signed stock transfer forms are held securely in our office. All client funds held by Ethex are held in a segregated client account until transferred, which means that until transfer they continue to belong to the investor, and not to Ethex.

The Process in Detail

The above is a brief guide to the process matching and settlement. For full details on how the secondary market works, read our Order Execution Policy. If you want to see the rules we apply to all orders placed via Ethex, you can read our Ethical Broker Policy.

Your portfolio

If you signed up for the Ethex Portfolio Service, you will be able to view your open offer and your investment will be added to your portfolio once completed.

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https://www.ethex.org.uk/savings--investments_16.html

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