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Is the OMCA right for YOU?
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BENEFITS:
The OMCA allows you to avoid currency conversions at the time of trade
settlement when you purchase or sell shares on an
overseas market.
For example, you may choose to sell Australian (AU) shares on Day 1 in order to buy more AU
shares on Day 3.
The possible outcomes of this scenario are outlined below:
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With the OMCA |
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Without the OMCA |
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The sale proceeds, in AUD, are credited to
your
AUD OMCA account balance. There is no conversion
so there is no conversion fee.
Overnight, those funds start earning interest.
Later, you can pay for the shares purchased on Day
3 with the AUD obtained from the sale on Day 1.
There's no
conversion so
there's no conversion fee. |
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The sale proceeds from the sale on Day 1 would be
converted into NZD and credited to your Direct
Broking Call Account or nominated bank account.
There is a conversion fee of up to 1.5%.
On Day 3 you would pay NZD for the AU shares
you purchase
and face a second currency
conversion charge of up
to 1.5%. |
PLEASE NOTE: settlement of AU buy trades from AUD, US buy trades from USD or UK
buy trades from GBP is only possible if there are sufficient funds held in the
relevant OMCA account at the time your order is placed.
LIMITATIONS:
The OMCA is unable to support real-time transfers between currencies right now.
Transfer requests made by clients will be processed at least once within the hour
between 9:00am NZT and 6:00pm
NZT.
The OMCA cannot show the exact exchange rate at the time of the currency
transfer request. Instead, you will see an indicative rate as at the time your
transfer has been requested. Once the transfer has been completed, we'll send
you an FX Transfer confirmation that will display the exact rate used.
The OMCA does not currently allow withdrawals in any currency other than NZD.
RISK:
The OMCA is offered to Direct Broking clients by ANZ National Bank Limited
(ANZ) and the operation of the OMCA is managed by Direct Broking Limited (Direct
Broking).
As all funds are held by ANZ National Bank Limited, Direct Broking clients
are effectively banking with ANZ and are subsequently exposed to a credit risk
on the performance of ANZ. ANZ National Bank Limited currently holds a Credit
Rating from Standard & Poor's* of AA-.
*Standard & Poor's ratings are statements of opinion, not statements of fact or recommendations to buy, hold or sell any securities. Ratings are subject to change. For the latest ratings information please visit www.standardandpoors.co.nz
In addition to credit risk, there is a risk that funds held in your OMCA will be
exposed to currency fluctuations.
In other words, the exchange rate between the NZD and the currencies of your
OMCA balances can change significantly over short periods of time, resulting in
the value of your OMCA balances, when expressed in NZD, to fluctuate. Sometimes
this fluctuation will be to your advantage; other times it will be to your
disadvantage.
It is up to you to consider these risks and manage them appropriately.
About OMCA
Download Form
OMCA FAQs
Deposit Funds
OMCA Rates
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