Which international stock markets can I trade on?
As well as UK shares you can also trade on six global stock markets. When you place an international order we access the market directly via a third party trading provider which means that orders are placed onto the central market order book. All orders are routed through Banca IMI or other international market counterparties who will act as agent in dealing with the respective markets and/or their member firms. When you place a trade we will route your order to our international market counterparty who will trade it at a price at least equal to the price available on the relevant international stock exchange or trading venue.
International stock markets have different opening times to the London Stock Exchange so you can trade international shares from 8am until 9pm, Monday to Friday.
|Stock Exchange||Local Times||UK Times|
|New York (NYSE, NASDAQ, NYSEAmex)||09:30 - 16:00||14:30 - 21:00|
|Frankfurt (XETRA)||09:00 - 17:30||08:00 - 16:30|
|Milan (MTA)||09:00 - 17:25||08:00 - 16:25|
|Paris (Euronext)||09:00 - 17:30||08:00 - 16:30|
|Amsterdam (Euronext)||09:00 - 17:30||08:00 - 16:30|
|Brussels (Euronext)||09:00 - 17:30||08:00 - 16:30|
During the change between Greenwich Mean Time and British Summer Time our opening hours may not match those of foreign markets.
Limit orders for international shares are processed differently to UK limits. The instruction will be routed to our international market counterparty. They will arrange for it to be displayed at the price you specified on the relevant stock exchange or trading venue’s public limit order system.
International orders are placed on to the central market order book for that market and will be prioritised in terms of price (in the case of a limit) and time. Trades placed onto the order books are visible to the entire market in order to contribute to the liquidity of holdings.
The stock or cash value of the order will therefore be unavailable for you to trade until the order is cancelled or completed.
What are the risks involved with international shares?
Foreign markets will involve different risks to UK markets. In some cases the risks will be greater.
|Culture||Language and cultural differences between the UK and foreign markets may mean that there is a lack of information, or difficulty in obtaining information you may consider important to your trading decisions.|
|Currency Risks||When trading on foreign markets or in foreign denominated contracts, the potential profit or loss arising from such transactions can be affected by fluctuations in foreign exchange rates.|
|Economy and Politics||General economic and political factors such as the inflation or fluctuations in interest rates within the UK may impact overseas markets. In addition, there may be no correlation between the general economic outlook and the market conditions within the UK as compared to foreign markets. These may be less or more favourable.|
|Emerging Markets||Emerging markets tend to be less developed than the UK model and this can lead to greater volatility in securities pricing. This can mean the value of your investments may quickly change.|
|Shareholder Rights||As a shareholder who is resident in a different jurisdiction to that of the company you're invested in, you may find that you're excluded from certain shareholder rights and benefits. For example, the ability to participate in corporate events, such as Rights Issues. This means that you might not receive the same treatment as other shareholders and you could suffer economic losses as a result.|
Tax laws in other countries are different to those in the UK. In many countries the local tax authorities will withhold an amount of tax which exceeds the rate which would apply in the UK. In particular it's worth remembering that ISAs and SIPPs will only shelter you from UK tax.
The treatment of tax is therefore likely to affect the value of and any returns you might expect from foreign investments.
|Trading and Settlement||Trading volumes in foreign markets can be smaller than those in the UK. This can mean that reduced liquidity in overseas markets makes it more difficult to sell shares you have bought. Delays in settlement may also occur.|
What is Withholding Tax?
Withholding Tax is generally deducted from dividends, interest payments and possibly other types of corporate action distributions paid by foreign corporations or governments. Withholding Tax is deducted at the point of payment and paid to the government of the country from which the payment originates (i.e. the source of the income). The amount of Withholding Tax that is deducted may differ from country to country and is likely to affect the value of the returns you may expect from foreign investments. For example, a 30% withholding tax rate is applicable to U.S. dividends.
If you have received foreign payments as a result of trading international securities through us, you can view how much Withholding Tax you have paid on your Consolidated Tax Certificate. This is available to view online. If you are not registered online then we can send you a Consolidated Tax Certificate by post following the end of the tax year.
Trading U.S securities
Halifax Share Dealing Limited has a Withholding Tax obligation to the Internal Revenue Service (IRS) with respect to customers that hold U.S. securities and receive U.S. source income. We are required to obtain documentation from these customers that allow us to comply with these obligations and, where the customer is eligible, we can provide a reduced rate of withholding tax to their U.S. income. In order to do this, customers who intend to trade in U.S. securities or who are currently holding U.S. securities must provide a valid Form W-8 or Form W-9.
Please note that we do not provide tax advice and if you have any questions you should consult a professional tax advisor.
What charges do I pay?
You will pay a commission charge of £11.95 for trades in all international shares, whether it’s online or over the phone.
Foreign currency conversions are required to facilitate the settlement of international transactions. We apply a charge of 1% either side of the available exchange rate when buying and selling international securities. The available exchange rate is based on the exchange rate provided by Digital Look. Indicative exchange rates are provided prior to trading, and the rate applicable to the individual trade is confirmed on the contract note once the deal has been completed.
How is the foreign exchange charge worked out?
You buy 10 shares in a company valued at $100.00 per share. At the time the trade is placed, the £/$ exchange rate is 1.5200.
Cost of shares - 10 x $100.00 = $1,000.00
Cost of shares in GBP - $1,000.00/1.52 = £657.89
FX rate with FX charge added (1%): 1% of 1.52 = 0.0152
1.52 – 0.0152 = 1.5048
Cost of shares in GBP including FX charge = $1,000/1.5048 = £664.54
FX cost: £657.89 - £664.54 = £6.65