Markets you can trade through ASB Securities

New Zealand has two markets, operated by the New Zealand Stock Exchange (NZX).

The NZSX is the Main Board and home to many of New Zealand’s best known organisations and brands. It offers shares and exchange traded funds (ETFs). There are strict rules for listing, including minimum turnover, assets, reporting and disclosure.

The NZDX is the Debt Market which provides a way for organisations to expand and grow their debt facilities. It offers some corporate and government bonds, as well as fixed income securities.

How the New Zealand market operates

The market operates with share registries and share brokers.

Share registries:
Share registries act on behalf of organisations issuing shares or bonds to administer investor holdings. Amongst other things, they manage the share ownership registers, issue holding statements and manage corporate actions, such as dividend, interest payments and stock splits.

There are two shareholder registries in New Zealand: Computershare and Link Market Services.

Share brokers:
ASB Securities is a broker that facilitates you buying and selling shares on the share market. We don't hold or administer your shares, as most share holdings are held directly with the shares registries. There are exceptions though, such as if you have elected to use the nominee or the ASB Securities Margin Lending services.

What is needed to trade on the New Zealand market

Common Shareholder Number (CSN):
Shareholdings are generally held on a Common Shareholder Number (CSN). A CSN is a single shareholder number common to all NZ share registries that can hold multiple shareholdings.

A CSN will be allocated to you, when you set up a share trading account with us. If you already have an existing CSN, let us know when you are applying and we’ll use that one with your account instead.

If shares aren’t held on a CSN, they will be on a holder number – a shareholder number that’s specific to a share registry or a particular shareholding. You may have more than one holder number if you have existing shareholdings.

Faster Identification Number (FIN):
Shareholders also require a Faster Identification Number (FIN), sometimes known as an Authorisation Code. It is a 4-digit number, like a PIN, for your shareholding and is issued to you by the share registries. A FIN is associated to a specific CSN or holder number and is required to sell NZ shareholdings. If you lose your FIN, you will need to contact the relevant share registry who can then advise you what it is.

We trade on many overseas markets, including the United States, United Kingdom, Canada, major European markets and others. Several markets are available to you through ASB Securities that you may not be able to trade through other New Zealand brokers.

How ASB Securities operates in overseas markets

ASB Securities doesn't directly operate in international markets. To facilitate trading for our clients, we use overseas brokers who trade international markets to act as agents for placing orders, plus an international sub-custodian who holds and administers client shareholdings.

Shares are held in a pooled 'omnibus' account, where all international shareholdings are combined and held together in one place, rather than in individual accounts. You remain the underlying beneficial owner of the shares you buy and ASB Securities administers any dividend payments and corporate actions on your securities. We also provide a quarterly custodial report, so you can easily keep track of your shareholdings that are held in custody.

What is needed to trade on overseas markets

Unlike NZ and Australian markets, you don't need any special accounts or numbers. Generally, all you need is your ASB Securities account. Some markets can also have additional requirements, such as details of your tax status that we may need you to provide at a later date.

It's important to note, that in order to trade on overseas markets, your shares must be held in ASB Securities' custody.

Tax on your overseas holdings

Income from international shareholdings is usually subject to tax. Because your overseas shares are held in a single omnibus account with our sub-custodian, no concessional tax rates under individual tax treaties can be applied. Any interest, dividends or other income, is taxed at the maximum local withholding tax rate for your securities' home market. Our sub-custodian deducts your tax at source, and pays the overseas tax authority directly.

You are also liable for tax in New Zealand, on any dividends from your overseas holdings. Merger considerations and certain other corporate actions may be deemed dividends, resulting in withholding tax being payable on the capital value of your shareholding.

As the tax rate depends on your circumstances, we recommend that you seek appropriate tax advice regarding your obligations.

Sometimes there are other complexities when dealing on international share markets; such as increased regulation. We will endeavour to keep you informed on a timely basis of any changes that affect your shareholding. On occasion we may require you to provide additional information, to comply with the legal requirements of the international jurisdictions you own shares in.