Minimum Marketable Parcel (MMP)

When trading with a CHESS-sponsored platform and having your own HIN, there are certain order size regulations under the ASX operating rules procedures.

All opening buys are subject to a A$500 minimum order as determined by the ASX. This is known as the “minimum marketable parcel”. Once a position has been opened, investors can buy or sell any quantity of the stock.

What is the minimum marketable parcel (MMP)?

The minimum marketable parcel is a rule defined by the Australian Securities Exchange where investors must purchase a minimum shareholding of $500 when buying shares in a new stock or exchange-traded fund.

Any additional purchases that an investor wants to make in the same security must have a minimum order value of $20.

The $500 or $20 minimum does not include brokerage fees.

Example of a first time share purchase

Let's go through an example of purchasing a share for the first time with MMP and a subsequent purchase of the same share.

First time buy order for $BHP

On the Stake platform you will need a minimum of $500 + $3 brokerage to purchase your first shares in $BHP. Orders are rounded to the nearest share so you may need additional purchasing power in your account.

$500.00 + $3 brokerage = $503.00

$503.00 x at market ($46.50) = 10 shares*

10 shares* x at market ($46.50) = $465.

*$ amount orders are rounded down to the nearest share.

Since the amount of $500 cannot purchase a round number of shares, the order must be increased to a total of 11 shares of $BHP.

11 shares x at market ($46.50) + $3 brokerage = $514.50

To make a first time purchase of $BHP, investors would need $514.50 in their account.

Second purchase of $BHP

Now that the investor already holds BHP in their account, there is no $500 minimum order value, instead, it drops to a minimum of $20.

Using the same price above if the investor wanted to buy another share of $BHP.

1 share x at market ($46.50) + $3 brokerage = $49.50

The investor would now own 12 shares in their account.

Why do some platforms let you buy under the $500 minimum order value?

The MMP applies to all CHESS-sponsored trades. If you have an account with another platform that does not require an initial $500 minimum order for each security, they may be operating on a Custodial model, where all your shares are linked to the broker’s HIN.