ZIP Training - International Trading

Question 1

What international exchanges does nabtrade allow trading in?

Answer 1

1. US - NYSE, NASDAQ, AMEX
2. UK - London Stock Exchange (LSE)
3. Germany (Frankfurt) - Xetra
4. Hong Kong (HKSE)

Question 2

How does ownership work with nabtrade?

Answer 2

nabtrade operates on a custodian model (like most Australian brokers), meaning nabtrade is the trustee (owner) on behalf of the beneficiaries (clients).

Question 3

nabtrade is not an international broker (and has no international brokering licence); what is the international broker we have a custodian agreement with?

Answer 3

HSBC

Question 4

What 4 criteria do all nabtrade clients have to meet before being able to trade international securities?

Answer 4

1. Be Australian resident for tax purposes.
2. Have a TFN on account.
3. Have Australian address on file.
4. Not be a resident for tax purposes in any other country.

Question 5

What must be done if a client calls nabtrade to update their Australian address to a foreign address (e.g., UK address) and they have an international trading account?

Answer 5

They must either transfer out or sell-down any international holdings within 10 business days (otherwise we sell-down for them).

Question 6

Why does nabtrade act as a Qualified Intermediary (QI) on behalf of the IRS?

Answer 6

The main purpose of a QI is to ensure a correct application of the double taxation treaties concluded by the USA, and more generally, of the USA withholding tax to be applied to foreign persons.

Question 7

How do Foreign Exchange (FX) fees work on international trading?

Answer 7

• Default is for all trades to be in $AUD (except where client has MCF activated).
• nabtrade places an FX fee to convert funds from AUD to foreign currency of the order.
• Fee is live FX rate plus additional buffer fee of 1.5%

Question 8

What is the settlement time for foreign trades?

Answer 8

T+2 (same as domestic) except for US trades which are now T+1 (since May 2024).

Question 9

How do corporate actions and dividends work in international trading?

Answer 9

• nabtrade participates in CAs on behalf of clients (custodian model).
• All international dividends paid into nabtrade cash account.
• Clients cannot participate in CAs and cannot elect for dividend reinvestment.