CMT - Frequently Asked Questions

Who provides the Cash Management Trust account (CMT)?
The Cash Management Account is managed by First NZ Capital Securities Limited.

Which currencies do I have access to?
Currencies available in the Cash Management Account are:

New Zealand Dollars (NZD), Australian Dollars (AUD), US Dollars (USD), Euro (EUR), British Pounds (GBP), Japanese Yen (JPY), Canadian Dollars (CAD), Swiss Francs (CHF), Hong Kong Dollars (HKD) and Singapore Dollars (SGD), Norwegian Krone (NOK), Swedish Krona (SEK).

Which currencies can I settle my share or bond trades in?
To purchase shares or bonds in AUD, USD or GBP you must have the required amount of funds available in the necessary account before you place your order.

MARKET	SETTLEMENT METHOD...
NZX trades:	NZD from the NZD CMT

ASX trades:	NZD from the NZD CMT (foreign currency conversion margin applies)
	AUD from the AUD CMT, if funds are available

US trades:	NZD from the NZD CMT (foreign currency conversion margin applies)
	USD from the USD CMT, if funds are available

UK trades:	NZD from the NZD CMT (foreign currency conversion margin applies)
	GBP from the GBP CMT, if funds are available

Can I pay my AU, US or UK dividends to the CMT?
Australian dividends paid to you by Australian Dollar cheque can be posted to Direct Broking and deposited into your AUD CMT account. Please note that an 8 day clearance period applies for Australian Dollar cheques. The CMT cannot accept Australian Dollar direct credit payments for Australian dividends.

Is there a minimum deposit or minimum balance needed to operate the CMT?
No. However, if a CMT account remains unfunded or inactive for a period of time, we reserve the right to close the account at our discretion.

Do I have to hold a balance in all of the 12 currencies?
No, you can choose to hold a balance in all, none or any of the 10 currencies of your choice once your CMT has been opened. However, if an account remains unfunded or inactive for a period of time, we reserve the right to close the account at our discretion.

Are there any transaction charges or service fees?
There are no service or transaction fees. However, when a currency transaction occurs, a margin between the wholesale rate and the rate provided to you will be applied. More information on foreign currency conversion can be found here.

How can I deposit funds?
You can view deposit instructions and the bank account details for your CMT here.

I have made a deposit, when will the funds appear in my Cash Management Account for trading?
We will receipt deposits the following business day using the reference you have entered to determine your account. Funds will generally be applied to your Cash Management Account by 10am on business days. To avoid delays, please ensure you deposit funds from the bank account listed against your trading account.

NB: If you make a deposit after your banks cut off for same day cleared payments, we will not receive the payment to our account until the following business day, which we will then apply to your Cash Management Account the next business day.

When can I withdraw funds?
Funds can be withdrawn (overnight) from your NZD CMT on any NZ business day before 4:00pm NZT. If your withdrawal request is placed on an NZ public holiday, on a weekend or after 4:00pm NZT, funds with be withdrawn overnight on the next business day.

Note: the withdrawal of funds only applies to NZD.

When can I transfer money between currencies?
Funds can be transferred on any NZ or currency issuing country's business day between the hours of 9:00am and 6:00pm NZT. If your transfer request is placed on an NZ public holiday, on a public holiday in the currency issuing country, on a weekend or after 6:00pm NZT, funds will be transferred overnight on the next business day.

How often are transfers processed?
Transfer instructions are processed at least once every hour from 9:00am NZT until 6:00pm NZT during New Zealand business days.

Investors should note that due to the hourly processing of transfers, the CMT is not suitable for short-term currency speculation. Read more.

Can I withdraw money in a foreign currency?
If you wish to withdraw a non-NZD currency from your CMT you must first transfer it to the NZD CMT and then withdraw the exchanged NZD amount.

Can I make transfers within or withdrawals from my CMT via phone?
Clients are encouraged to use our website to conduct transfers or withdrawals, however in cases where internet access is not available you may call 0800 805 777 and ask us to do a transaction on your behalf.

Can I un-do a transfer or withdrawal before it has been processed?
You will be given the opportunity to amend or cancel your instruction before you confirm it, but once it has been confirmed (on screen by you) and sent for processing it cannot be reversed.

What level of interest do I get on my funds?
The level of interest earned on each currency varies based on the amount of funds deposited and on the prevailing wholesale interest rate. Note: some currencies may display an interest rate of 0% if the wholesale rates are too low to support a retail interest rate.

To view the most current interest rates, click here.

What tax do I have to pay on interest earned from my CMT?
All CMT account holders pay Resident Withholding Tax (RWT) on any interest that is earned in their CMT.

If you do not advise Direct Broking of the tax rate to be applied to your investment, or you have not provided your IRD number, RWT will be deducted at the highest rate (currently 33%).

Please note that Direct Broking is unable to give advice on tax related matters; we suggest you seek independent taxation advice from your tax advisor or accountant.

How do currency fluctuations affect my balance when converting money to and from New Zealand dollars?
When converting New Zealand dollars to a foreign currency, the amount in the foreign currency you receive is dependant on the exchange rate at the time of the conversion. As a result, if you are holding money in a foreign currency, as that currency exchange rate fluctuates the equivalent amount in NZD also fluctuates.

How is interest paid?
Interest is calculated daily and paid monthly on the balance of applicable currencies.

How is income tax paid?
Resident Withholding Tax (RWT) is deducted monthly from the interest earned on relevant currencies and converted into New Zealand Dollars for payment to the Inland Revenue Department (IRD) on the same day, using a margin-free rate approved by the IRD.