General
How do I sign onto the DIY Service for the first time?
Enter your account number in both the user/account number field and password
field. The password is case sensitive. You will then be prompted to change your
password. Full sign on instructions will be sent to you shortly after the
account is opened.
What is the minimum outlay I require to start buying shares?
The minimum parcel of shares that can be registered is based on the particular
price band a stock falls under. A general guideline is $500.
How does your fee structure work?
Brokerage is charged on your Buy and Sell transactions. The brokerage
varies based on certain criteria on what class of security you trade, the channel
that you trade through (internet or phone) and how it is settled (credit or prepaid
through a Direct Broking deposit account).
Click here for our rate sheet detailing our brokerage charges and fees.
How easy is it to buy and sell shares on the market?
Once you have completed and submitted an application form, Simple! You can
either phone our toll free number 0800 805 777 to place an order directly with
one of our Equity Dealers or with our simple to use DIY service on our website!
What sort of advice and information is available to me?
Direct Broking offers a DIY service, no
advice is given but general information is provided, such as our DIY brochure, stock prices and
company news information. Prices and news is available to clients online. You can order the DIY brochure providing
widely used strategies and practical steps to investing in securities
here.
How can I place an order with you?
Clients can choose to submit an order via our online ‘Self Trader’ service or
by calling our toll free dealing line 0800 805 777. Please have your client
account number ready for the Dealer.
When you contact us to place a sell order, please have your CSN and FIN ready.
ASX sell orders:
If your holdings are sponsored in CHESS through E*TRADE Australia, your order can be placed
immediately.
If your Australian shares are Issuer Sponsored you will need to provide your
Shareholder Reference Number (SRN) on your Issuer Sponsored holding statement.
How do I know if my order has traded?
We forward a contract note to you or an authorised representative via email or a hardcopy via post or fax.
Once my shares are sold when do I get paid?
For NZX transactions payment is made 3 business days after the trading date
For ASX transactions payment is made 3 business days after the trading date
Why does Direct Broking restrict depth to clients who have
traded on the internet within the last 90 days?
The NZX charges broking firms royalty fees for live price and depth information accessed by our clients. It is not cost effective to provide this data to all clients. In order to recover some of the costs for providing clients with this data, the depth function is only available for clients that have traded with us in the last 90 days. Client that have not traded with us in the last 90 days do not have access to the depth function.
What are your brokerage rates?
Brokerage rates are available
here.
What are your office hours?
Between 8.30am & 6.00pm, Monday to Friday.
What are the market trading hours?
NZSX trading hours: 10.00am until 5.00pm, Monday to Friday except statutory holidays.
Orders can be taken from 9.00am
onwards.
ASX trading hours: 10.00am until 4.00pm (EST Australian time), Monday to Friday
except statutory holidays.
Can I place an order when the market is closed?
Yes, you can place an order outside market hours but it will not be processed
until the opening of the next trading day.
How long does an order stay in the market?
NZX orders will expire after 4 weeks (3 weeks for ASX orders) or earlier if
there is a corporate action (if the stock goes ex-dividend or the stock goes
'ex' share consolidation or 'ex' share split).
What about partially traded orders?
NZX partially traded orders will also expire after 4 weeks, (ASX 3 weeks).
Clients will need to amend their price to complete the order or submit a new
order after expiration. If you place your order online you can receive email
notifications when your NZX or ASX order expires.
Are there minimum security holdings?
Minimum Holdings at any time shall, unless otherwise determined by NZX, are as
follows:
(a) In relation to equity securities (shares), a holding with a market price at the
relevant time of:
| Number of Units |
Price (both figures inclusive) |
| 2,000 |
Where the price does not exceed 25 cents |
| 1,000 |
Where the price exceeds 25 cents but does not exceed 50 cents |
| 500 |
Where the price exceeds 50 cents but does not exceed $1.00 |
| 200 |
Where the price exceeds $1.00 but does not exceed $2.00 |
| 100 |
Where the price exceeds $2.00 but does not exceed $5.00 |
| 50 |
Where the price exceeds $5.00 but does not exceed $10.00 |
| 25 |
Where the price exceeds $10.00 |
(b) In relation to rights to equity securities, the number that would, upon
exercise, convert to a minimum holdings as specified in (a).
(c) In relation to debt securities, a holdings with $5,000 or $10,000 principal amount.
(d) In relation to any other securities, a holding with $1,000 face value.
Direct Broking wishes to advise where the minimum holding requirement
is met at the time of order submission or order execution but, due to a price
variation or corporate action, is no longer met on settlement; the security
holding will not be registrable.
Where this occurs Direct Broking Limited will contact you. At this point you
will have two options:
1. Purchase additional shares to raise the parcel above the minimum holding.
2. Reverse the transaction.
What are your policies with Foreign Exchange?
If you have an Online-Multi Currency Account (OMCA) and there are sufficient funds held in the relevant currency, we can settle your overseas trades (AU, US and UK) in the currency of that country (AUS, USD or GBP).
Read more about the OMCA here.
If you do not have an OMCA,
Direct Broking does not direct credit funds in AU$, US$ or GBP to a foreign
currency account operated from a New Zealand based bank. Funds paid into a
foreign currency account are done so by electronic transfer on an individual
transaction basis. These are costly for you, due to the manual process required
and the bank charges that are applied during the transaction by the remitting,
transferring and receiving banks. All charges from these banks including
transaction and currency exchange charges; are passed onto you by deduction
from the amount transferred or from the sending and receiving accounts.
When will my Direct Broking Call Account withdrawal request be processed?
Processed overnight: if you place your request on an NZ business day before the cut-off time (3pm NZT).
Processed overnight on the next business day: if you place your request after the cut-off time (3pm NZT), if you place your request during the weekend or if you place your request on an NZ public holiday.
Information for overseas clients
Direct Broking provides
FX services in relation to trading securities through us.
We do not provide general currency dealing services. Related services can include
transferring funds between NZD and distribution of proceeds to other currencies.
All costs will be passed on to you in relation to the service.
All overseas based clients must prepay their orders.
For tax reasons, overseas clients are not eligible for our Online-Multi Currency Account (OMCA) service.
What kind of account can I set up?
- Individual Account
- Joint Account
- Company Account
- Family Trust Account*
Direct Broking can establish a trading account for any New Zealand resident. New Zealand citizens
living overseas may be accepted if:
a) they will be living overseas for less than 3 months, and
b) they can provide three forms of New Zealand identification.**
* The Family Trust must be a Trust that has been established under New Zealand law.
** NZ citizens who are not living in New Zealand must provide the following
forms of ID if they wish to open an account with Direct Broking Limited.
-
A copy of a current and valid New Zealand driver’s licence or passport
-
A copy of a cheque, bank statement or deposit slip for an NZ$, New Zealand
domiciled bank account
-
New Zealand IRD number
The following types of Equity orders are permitted
Market Order
When submitting a market order, you are requesting that the buy/sell order be
placed at the best available offer/bid price at the time the order is entered
into the market. Please note, a market order does not necessarily mean that the
order will be traded in full.
Limit Order
A limit order is an order to buy or sell a stock at a specific price or better.
A buy limit sets the maximum price you are willing to pay, and a sell limit
sets the minimum price at which you are willing to sell. Limit orders ensure that you
pay or receive a specific price, but do not necessarily ensure that your order will be executed.
For example, you may wish to purchase a stock that is currently quoted at a
$2.04 bid, $2.07 offer, but do not want to pay more than $2.02. If you place a
limit order at $2.02, your order will only be filled if the price drops to
$2.02 or lower and there are no orders ahead of yours. If it continues to trade
at its current quote, your order will not trade.
Stop Limit Order
A stop limit order is used to limit the price at which you wish to sell as the price
falls. The order is placed on the market when the price falls through the trigger
value. The stop price limit sets the lowest price at which to sell. For
example, you want to limit losses on a stock that you purchased at $5.00. You enter a sell
stop limit order trigger at $4.80 with a minimum price at $4.74. Once the stock
trades at $4.80 or below, your order is placed with a minimum at price of $4.74.
This will ensure that you do not sell at an extremely low price if a stock
opens drastically lower or the stock has a wide margin between the bid prices.
In this example, if the stock drops down at any price below your $4.74 limit,
you will not sell the stock.
Tax
The following is a general summary of the New Zealand tax implications
based on current tax legislation. The information detailed below does not form advice
from Direct Broking. If in doubt you should seek professional tax advice in relation
to your circumstances.
What do I have to pay tax on?
Distributions by companies by way of dividend are generally taxable income. The amount of
tax that is ultimately paid depends on your own individual tax circumstances.
What types of credit are attached to/deducted from dividends?
Dividends received may have imputation credits and dividend withholding
payments attached or have had foreign and/or RWT deducted. These credits may be used to reduce the amount of any residual tax that you could
be required to pay at the end of the financial year.
Why is Resident Withholding Tax deducted from dividends?
The Income Tax Act 2007 requires that RWT is deducted from any dividends paid unless
one of the exemptions apply. Any RWT deducted is remitted to the Inland
Revenue Department by the Issuer and is available to you as a tax credit to offset against
your residual tax liability in most circumstances.
Whether or not RWT is deducted, your overall tax liability remains the same.
However, the deduction of RWT reduces the amount of any residual tax that you
may be required to pay at the end of the financial year.
What if I have a Certificate of Exemption?
If you do have a valid RWT Certificate of Exemption for New Zealand, please send a
copy to: Direct Broking Limited, PO Box 1790, Wellington 6140, New Zealand. Once the
certificate is received, future distributions will not have any RWT deducted unless you notify us of a change in the status of the
certificate.
Please be aware that in providing a copy of your RWT Certificate of Exemption as
described above, you undertake to maintain a valid certificate of exemptionat all times and
that you will notify in writing any change in this regard to Direct Broking
Ltd.
At What Rate is Resident Withholding Tax Applied?
The RWT rate on dividends paid to New Zealand
residents is 33%. The 33% rate applies regardless of whether the
client has supplied their Tax File (IRD) number.
The amount of RWT deducted is reduced by the
imputation credits attached, dividend withholding payments made or
foreign withholding tax deducted overseas. No RWT is
required to be deducted where a dividend is fully imputed, has
full dividend withholding payment credits or the percentage of foreign
withholding tax deducted is greater than or equal to 33%.
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