What is Manual or EFT Settlement?

When an investor participates in a capital raise, there are two methods of settlement, Delivery vs Payment (DvP) or EFT/Manual, to ensure that funds are credited to the company and shares are delivered to the investor. Delivery Versus Payment (DvP) is the most common settlement method which you can read more about here. This is the preferred settlement method by all parties as it ensures shares are only delivered to an investor when payment has been secured.

Manual or EFT settlement is an alternate settlement method which involves the investor electronically transferring funds directly to the company. In return, the company instructs their share registry to allot shares directly to the investor. Manual/EFT settlement is designed for investors who are unable to, or choose not to, settle via DvP as not all lead managers facilitate DvP settlement.

Example: Manual/EFT Process

• Allocation outcome: Investors are notified of their allocation outcome via email with instructions on the Manual/EFT process, including the payment due date.

• Offer letter: Investors receive an offer letter with an allocation confirmation that includes payment instructions & key dates.

• Investor completes payment transaction and confirms payment: Investors sign their offer letter and organise the bank payment as per the payment instructions on the offer letter. Investors then must send confirmation of their payment to Fresh at settlements@freshequities.com. Funds must be paid to the company account before the funds due date outlined on the offer letter.

• Funds confirmation: Our team will check with the company that funds have arrived into the provided bank account and may request additional payment confirmation from investors.

• Settlement Date: The company has received all the funds from the placement and creates the share allotment order with the share registry for allotment the following day.

• Allotment date: The registry allots the shares into the nominated brokerage accounts.

Some Things to Note

• When settling via the Manual/EFT process, investors can nominate to allot shares into a HIN or an SRN. Read more about these here. When providing your holding details to Fresh, please make sure the information is in the CHESS format, which you can find on a CHESS holding statement or on your brokerage account. If the information does not mirror this format, your share allotment could be sent to an SRN.

• Fresh does not handle any investor funds at any point during the settlement process. We facilitate the settlement by ensuring that investors have transferred funds prior to the due date, and we assist the company in locating and reconciling funds against investors. This means that investor funds go directly to the company, and the shares are allocated directly to the investor.

• Fresh provides a payment reference on the offer letter, this makes it easier for the company to reconcile funds against investors. Please use this reference to ensure there are no delays in the allocation of shares.

For more information around settlement and allotment please reach out to settlements@freshequities.com.

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Some articles you might find useful

• What is a dvp settlement?

• How does allocation work?

• What is an offer letter?

• What is a HIN/SRN?