BENEFITS OF CUSTODIAL TRADING
Extra application forms are not required
If you have an existing and active account with Direct Broking then you
automatically have the ability to trade international shares through our online custodial trading service. To
get started, select "US" or "UK" from the Quick Quote drop down menu and enter a stock code, or a
partial company name followed by an asterix.
You retain beneficial ownership
The registered owner of the shares is Direct Nominees Limited or the nominated
offshore custodian who holds them in custody on your behalf, but you are the beneficial owner. A
custodial trading service allows you to continue managing your portfolio, to choose when to buy or sell
shares and to receive dividend payments, but the custodian takes care of the
administration for you.
Orders can be placed online
Direct Broking's online custodial trading service removes the need for
share certificates because all orders are processed and settled electronically. If your shares were not
held in custody you would receive a share certificate for each "parcel" of shares that you own and
be required to submit that certificate to your New Zealand based broker when you wanted to sell.
Electronic notifications and online visability
All contract notes and settlement notices are sent to you via email
(or post, if required) whenever you purchase or sell a parcel of shares. Likewise, your transaction history and
portfolio details are displayed and available for your review on the Direct Broking website.
Direct Broking will also send a statement of your custodial holdings to you every six months that also
includes a list of transactions made over the six month period.
Corporate actions are managed by Direct Broking
Direct Broking manages all applicable corporate actions that affect your
holdings - including dividend payments, splits, consolidations and rights issues etc. Details of the
corporate action are communicated to you and, where applicable, are recorded in your online
portfolio by Direct Broking.
Settlement period is standard at T+3
Trades that you conduct via our online custodial trading service are settled
within the standard period of Trade Day plus Three business days (T+3).
Unlike our online custodial trading process, the settlement of shares traded
via a share certificate can take a number of weeks as the share certificate must be posted to your New
Zealand based broker who would then post it to an international share broker for processing
and settlement.
Dividends can be deposited to your Online Multi-Currency Account (if established)
Dividends from custodial holdings can be automatically credited to the relevant
currency in your Online Multi-Currency Account - e.g. US Dollars, British Pounds, Euro or
Canadian Dollars. Alternatively, you can have dividend payments converted to New Zealand dollars
and paid to you via direct credit.*
Note: dividends resulting from a custodial holding cannot be reinvested in the company.
*Foreign currency charges will apply when converting dividends to New Zealand
dollars. Refer to the Client Agreement General Terms and Conditions for details.
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