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 FASTER 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 made3 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, be 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 $1,000 face value.
Direct Broking wishes to advise where the minimum holding requirement
is met at the time of order submission or order execution but, due to a price
variation or corporate action, is no longer met on settlement; the security
holding will not be registrable.
Where this occurs Direct Broking Limited will contact you. At this point you
will have two options:
1. Purchase additional shares to raise the parcel above the minimum holding.
2. Reverse the transaction.
What are your policies with Foreign Exchange?
Direct Broking does not direct credit funds in AU$, 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.
All foreign currency bank accounts used to transfer funds must come from an
account held at a bank located in the currency’s country of origin, e.g. an AU$
bank account that is Australian domiciled.
-
NZ$
must come from a NZ$ bank account held in a New Zealand bank
-
AU$
must come from a AU$ bank account held in an Australian bank
-
US$
must come from a US$ bank account held in a North American bank
-
GBP must come from a GBP bank account held in a British Bank
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.
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 indiependant 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%.
Custody Explained
What is Custody?
Our online US/UK custody trading service allows you to have your shares held
electronically by our custodian. The custody service
saves you time from administering your holdings as the custodian does this for
you. It also means you can sell your shares quickly rather than waiting for a
certificate to arrive at an overseas broker.
We also look after most of the paperwork to do with owning shares so you don’t
have to worry about tracking announcements about your holdings, we send you all
important information as it comes to hand.
What is the alternative to custody?
If your shares were not held in custody you would receive a stock certificate
for each “parcel” of shares that you own. The certificate is posted to you from
the US or UK, so you would have to wait up to two weeks before you could send
the stock certificate to a broker to sell the shares.
Direct Broking offers a certificated trading service over the phone. Ring 0800
805 777 for more information.
What are the custody requirements?
All of the US and/or UK shares that you purchase are held in custody by our custodians,
who holds them in custody on your behalf.
Who owns the shares that are held in custody?
You are the beneficial owner of the shares. The registered owner of the shares
is Direct Nominees or the nominated offshore custodian who holds them in
custody on your behalf.
Being the beneficial owner means that you decide to buy or sell the shares, and
you receive dividend payments. The custodian does not decide when to buy or
sell the shares and does not benefit from dividend payments - you get the
benefits of owning the shares (even though you’re not actually the registered
owner).
What happens if a dividend is allocated to shares that I have
in custody?
When a dividend is distributed to the shareholders, Direct Broking then
allocates the dividend payments to the beneficial owners. The cash dividend
amount will be credited to your nominated account in New Zealand Dollars. You
will not have the option to re-invest your dividend.
Foreign currency charges
may apply in converting the dividends to New Zealand Dollars. Refer to the
service’s
Terms and Conditions
for details.
What information will I receive about my shareholdings?
Your portfolio details are available online. Custodial portfolios are managed
by Direct Broking. All corporate actions are processed and updated by us then
shown in your online portfolio. This includes notification of annual reports,
as they become available. For copies you will need to visit the ‘investor
sections’ of the companies you have chosen to invest in. You will be emailed
settlement notices for all your trades.
Settlement
Settlement of trades for US & UK securities is standard at trade day, plus three business days (T+3),
whereas the settlement period for certificated non-custody shares can often be
a matter of weeks.
What are the costs associated with the online custody service?
CUSTODY BROKERAGE FEES
Check our complete list of brokerage rates and fees for trading US/UK
custody shares on our
rates page.
CUSTODY ADMINISTRATION FEES
US Custody fees: 0.5% per annum on holdings value calculated daily and charged
following the end of each month
UK Custody fees: 0.5% per annum on holdings value calculated daily and charged following
the end of each month
UK Stamp Duty: 0.5% of the value of any transaction resulting in a change in
beneficial ownership
Fee Minimum: NZ$60 every six months. There is a minimum charge for the
administration of your custody holdings. This fee covers the administration of
corporate actions and communications to you from the company holdings you hold
in custody. Where your custody or brokerage charges for custody securities within a six month period
are less than NZ$60 we will charge the difference, making the total charge for
that six month period the NZ$60 minimum. The six month periods begin on 31
March and 30 September each year.
Transfer IN: If you wish to transfer existing stock, held in custody by another
broker, in to our custodial service there is no charge. Please note: The stock
you transfer IN must be traded on either of the following markets: NYSE,
NASDAQ, AMEX and the London SE. The stock you transfer IN must also be part of
a pre-selected tradable group of shares on the those markets. See this question
below.
Transfer OUT: If you wish to transfer the stock held in custody to another custody service you will be charged for each
transfer of each security. Please refer to our fees section for a complete list
of charges on our
rates page.
Placing an Order
How do I place an order to buy or sell US/UK custody shares?
Place orders in the same way as you place New Zealand trades. However, unlike
NZX, ASX or certificated US/UK stocks, you do not need to provide a shareholder
number to sell shares held in custody - simply pick the stock you wish to sell,
enter your price limit and click “Go”.
Is there a restriction on the securities that I can trade in?
Direct Broking will provide quotes and the ability to buy/sell certain stocks, currently:
US markets – top 500 stocks (by market capitalisation) on NYSE, NASDAQ and AMEX
UK markets – top 200 stocks (by market capitalisation) on LSE
What are the minimum investment requirements?
An order, if filled completely, must result in a custodial position
either:
-
worth greater than US$500.00/€500.00/£500.00 depending on the currency the
instrument is traded in (for both buys and sells); or
-
worth US$0.00/€0.00/£0.00 (in the case of a sell)
What time of day can I place an order to buy or sell US/UK
custody shares?
You can provide instructions for an order at any time during the day (except as
indicated below) and change them up to an hour before Direct Broking submits
them to the relevant stock exchange. The time your order(s) are submitted into
the US/UK market is 6:00pm New Zealand Time (NZT) each business day. Once the
orders are submitted into the market you cannot change them. If you miss this
time then they will be submitted the next business day.
For the time being there will be one (1) bulk upload of all US/UK orders to
market each day occurring at 6:00pm NZT. This makes the product unsuitable for
anyone day-trading on these markets. It is our intention however, to review
this policy as demand for the service increases.
Am I able to cancel or amend my US/UK custody orders?
You can request to cancel or amend an order by going to the “My Order” section
of the website when logged in. You can only cancel or amend an order prior to
it being submitted into the market (orders are submitted at 6pm NZT).
You should be aware that because of the process involved, cancellation or
amendment cannot be guaranteed. If it is too late in the process (after 6pm
NZT) to cancel or amend your order, it will be executed according to your
original instructions.
Please refer to the table below for a simplified explanation of our
instruction receipt and order submission times, each working day.
Prior to 6:00pm NZT
You may submit new orders and amend existing orders. These orders will be submitted into the
current Market day (soon to open).
6:00pm - 6:30pm NZT
No new orders or amendments can be accepted for US/UK markets. Direct Broking
submits new orders to the US/UK markets.
After 6:30pm NZT
You may submit new orders and amend existing orders. These orders will
be submitted into the next
Market day.
How long does an order stay in the market?
US and UK custody orders are "GOOD FOR A DAY" – they expire at the end of the
US/UK trading day. If your order expires before it trades, then you need to
submit a new order - you will not be charged any brokerage if this is the case.
If your order is partially filled when it expires, you will only be charged the
brokerage amount applicable to the traded value, or the minimum whichever is
greater. You should check your contract note to confirm if your order has been
partially of fully filled.
How quickly can I expect my order to be filled?
The time taken to fill an order depends on several factors, including:
1. prevailing market conditions
2. how many other buy or sell orders have been placed
3. the order price, and
4. the number of buy or sell orders in the market.
If your order is for a share that is infrequently traded, it could take longer
to fill and could expire at the end of the day without being filled. If this
happens you will need to place a brand new order – note: no brokerage is
charged on orders that expire without being filled.
Once your order has been filled, we will forward you a contract note, via
email.
When I sell shares how long will it take to receive the
money?
We will receive money to your nominated account three business days after
execution of the order. Foreign exchange charges will be incurred on all foreign securities
transactions that require funds to be converted to or from NZ dollars.
When I buy shares when does settlement occur?
We will debit your nominated settlement account three business days after
execution of the order. Foreign exchange charges will be incurred on all foreign securities
transactions that require funds to be converted to or from NZ dollars.
Can I do a “contra” between a buy and a sell order?
We are unable to contra, or off-set, buy and sell trades that complete on the
same day.
What bank accounts can I trade from?
You can only trade from your Direct Broking trading account.
Am I able to settle my US custody trades in USD, or my UK
custody trades in GBP?
At this stage we are unable to offer this service. In the future, we may
introduce a service where you can pay for US trades in USD and UK trades in
GBP, when this is available we will advise you. However at this stage you must
settle your US/UK custody trades in New Zealand Dollars. When a trade occurs
our settlement staff will direct credit/debit the settlement account to/from
your nominated New Zealand Dollar account.
Foreign exchange charges will be incurred on all foreign securities
transactions that require funds to be converted to or from NZ dollars.
For the purposes of conversion into or from one currency to another, the
exchange rate used is a midpoint rate plus a currency conversion margin of an
amount up to 0.89% of the overseas currency amount.
The midpoint rate is derived from wholesale buy and sell rates quoted by
foreign exchange market participants and which are compiled by a supplier of
financial market data.
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