questions for the joint parliamentary meeting, page-16

FactorThis asked : "Why not make it $500 like the minimum trade is for the VAST MAJORITY of traders,...?"

FT,

just to clarify this point. S500 worth of a single security type is the minimum holding required. Once you have that holding you are free to trade what ever size parcel you wish, provided your holding doesn't drop below the minimum threshold. This, by the way, is only an ASX guideline/rule, it is not actually legislation. One reason for this is to keep the cost of maintaining a registry for the company down. Back in the days before electronic mail, big glossy annual reports would have to be sent out to every entity on the register. Quite often the cost of the report was worth more than what some holders would receive as a dividend. Generally not a good business practice.

Your participating broker may also have additional rules to this, i.e. minimum trade of $500, regardless of current holding.

If a parcel drops below the $500 threshold as a result of the share price decreasing, then this is fine, you are still entitled to hold. However, a director may write to you requesting that you either dispose of the parcel or increased the size of the parcel to over the threshold. It would depend on the company's constitution whether a director had the power to force the sale.

--Dan