For a couple years I have wondered how one goes about purchasing shares overseas, I have avoided it as it seemed to be a complex process. Recently i decided to research and do what i needed to so that i could purchase shares overseas. In the few threads on this forum any advice was usual spares. So i thought i would chronicle my experience so that any one else wanting to do this may have something to guide them in the process. Please note that the below experience was purely an experience and may not necessarily be the best way to go about it. -First off, one does not need a bank account in the USA, you can fund the trading account via wire transfer from your South African account. -I decided to create my trading account with TD Ameritrade (with your own research im sure you could find others) -Instead of creating the account online, i opted to complete the manual form which was sent to me on request from TD ameritrade. I chose the manual form as the online form has validations that don't allow you to continue if the information is incorrect, therefore if you don't put in a social security number it doesn't let you proceed for example. -The account application was fairly standard, and self explanatory -I also had to compete a W8-BEN form which from what i understand is required for tax purposes. South Africa has a tax treaty with the united states which, as i understand, means we pay tax on any gains locally rather than in the states. Your Tax number is needed for this form. -Other information needed is your ID and bank statements. -I emailed the ID, bank statements and signed account application to TD Ameritrade. - The W8-BEN form however can not be emailed they need the original, so courier'd this via DHL at a cost of R350.00 only to realize i left out the city from my address, so resent at another R350.00 so make sure you get it right the first time. -Once they receive the form and all your documentation they create your account and you are ready to fund the account -The best way to do this is using a wire transfer, to do this go to any standard bank and speak to someone from Berue de change. They will advice on the wire transfer process. In summary you need you ID, Tax number and Account number that the money will come from. Standard Bank charged 0.4% commission on the total amount + R95 for the transaction. I am still awaiting the charges from the receiving bank, which will be debited from my account in a couple weeks, i was advised. -I was advised the wire transfer would take 2-3 days however i did the transaction yesterday and the money was in the trading account late today. -Once the money is in the account you can purchase the shares as you would on online share trading. All in all the process took me about 3 weeks but this was largely due to being cautious and researching and call the banks etc. to understand the process, understanding the process i would say it should take about a week to get set up. -Cost wise, there is a $10 dollar fixed commission on any trade i make, R700.00 courier charges and about an estimated R700 bank charges for my transfer of R33000.00. There is no monthly fee to open the account So i think that's the just of my experience, if any one has any questions please ask and i will do my best to answer. As said to start this is just my experience, and is in know way financial advice, and I may find I made a mistake some where along the line, but so far I have bought my shares and will only be able to tell if it was all worth the while when i eventual sell and return the money to SA. I am not a financial person by profession I have a personal interest in finance.
thanks for share the experience, I've also been looking into this recently but havent gotten as far as you did. All I've learned so far is: There are 4 options with brokers TD Ameritrade, IG Markets, Sanlam iTrade, PSG TD Ameritrade is by far the lowest in commissions and it seems like they're quite a big company. If you prefer to go with someone you know then Sanlam and PSG will do a lot of work from this side for you but they're costs are usually a % of the purchase (rather than the flat fee) accruing to greater fees over time.
If possible, would you be willing to provide a review of their services in comparison to... say, Standard OST. For example, what kind of products do they offer (just shares or futures and options etc.) and also the information provided... like with Standard bank, it's quite easy to get company information, financials and SENS and other news announcements.
Thanks for the feedback, glad this seemed to be useful. In terms of the service, from a pure customer service its brilliant, the staff are polite and helpful and emails a replied to in no less than 24 hours consistently. The site itself is great, there are many useful features, reports, technical analysis like OST. The charting is not bad, but is browser based, i would say the OST charts are better as they load in java. I do not trade options, futures etc. at this point so have no view on this however the site does offer options futures etc. All in all my experience so far is very similar to that of OST. The only thing i haven't yet figured out how the quotes work, delayed quotes are not a problem, i think you need to subscribe to some kind of price feed to get the live quotes.