Asked on 27 Jul 2018
I'm right now waiting for a market correction but want to get ready... hence I am keen to buy US stocks like (FANG = Facebook, Amazon, Netflix and Google) but they are all listed on the US stock exchanges (eg NASDAQ and NYSE) How do I go about buying those and which accounts, steps do I need to set up also, which are the best cost effective way yet easy to use also?
Hi there! I can give you my experience based on the brokerage I use right now - DBS VICKERS.
You will have to ACTIVATE FOREIGN MARKETS TRADING:
Log in to DBS Vickers with your User ID and Password.
Under My Account, select Account Management.
Accept/Acknowledge the following agreements to start trading in foreign markets:
United States Market* (Accept/Review Withholding Tax Agreement);
Overseas Listed Investment Products (Acknowledge/Review Risk Warning Statement);
Market Data for Canada & United States (Accept/Review Agreement).
Things to note!
You will need to fill up a form W-8BEN because it is a requirement for a withholding tax which US law will charge for all it's retail investors.
Take note of fees as well. for DBS VICKERS, I use it because of convincnce but the fees for overseas trades are: Min USD25 or 0.18% trading principal (whichever is higher)
I use Philips Securities, just bought FB recently, pre-crash :( and top up Post crash :)
Been buying local stocks only, I only just realise last year that I can just trade international stocks normally without doing anything extra. (DUH)
For US stocks, you will need to fill in a tax form. Call your agent or inventment company. They should be able to help you.
I just walk into the Philips Investor Centre and they helped me with the form and everything.
Buying DIY online will be cheaper then through broker. This would be true for all trading accounts.
Hope this helps
Personally using Saxo.
It's a custodian account - meaning you dont legally own the shares but Saxo owns it on your behalf. This is the risk you take in exchange for a lower fee - for saxo per trade is USD3.99. Other non custodian / CPD account charge like SGD15-USD25 per trade.
I use Saxo to trade US stocks (capital gain portfolio) and then DBS Vickers to trade and hold local stocks (dividend portfolio). Saxo holds a capital markets services licence under the MAS so is regulated.
Can just register online, meet the account manager to submit a few documents (20-30 mins) and then you will have you Saxo account where you can deposit your money, and use the money to buy shares globally (HK, Shanghai, SG, US etc). Easy no fuss set up, no lengthy forms to fill. Trades are instantly filled.
Been using Saxo for quite long already - so far so good in terms of depositing money + executing trades. :)
If you are looking to open an account, please let me know i have a referral code! fb.com/jackyyapp
Market is volatile, stay safe!
The most cost effecient method is interactive brokers. Trades are around 1 dollar per trade.
They have a platform fee of 120 a year. All these waive if you got 100k usd or more park. With them.
Down side : harder to setup - it's a us broker with the nearest call center at hk. If you lose you token etc be prepared for international calls.
Funding and removing funds happens usually within a few hours during sg working hours. You can fund in sgd to their citibank account and transfer at fx spot rate to currency that you like.
They are the biggest brokerage company in US not much to worry about them running bankrupt. After all they survive lehmen, dotcom etc.
Hi there! Thank you for question, there are many ways in which you can go about doing this.
Let me answer this to you step by step:
Step 1: Opting for the Right Brokerage
This is the most important as you get to save on transactional fees, custodian rates with the right brokerage, you can also get smaller minimum deposits and can use the interface platform more conveniently by monitoring your charts and withdrawals. Some of the trusted brokers that you can opt for are: May bank Kim Eng, OCBC Securities and DBS Vickers. Also keep in mind that by choosing the right brokerage, it helps to get access to the more popular and major stock exchange worldwide.
Step 2: Mandatory Declaration Forms
Once you have opted for a suitable brokerage that fits your investment styles, there are forms which required to be filled and submitted. One of the form is W-8BEN that is compulsory to be filled as per IRS (Inland Revenue Service) for all the nom-US residents who desire to trade in US stock market.
You can find the form on this link- https://www.irs.gov/pub/irs-pdf/fw8ben.pdf
Step 3- Fees and Applied Charges
There will always be a small fee reduction that will be paid to the US regulators when you decide on letting go of your US shares, irrespective of your brokerage. To get into more detail about this fee- it includes SEC (Securities & Exchange Commission) fee of 0.000174% will be deducted from every trade that will be done.
Step 4- Compare Wisely and Pick the Right one
There are many sites online that can do the comparison for you, e.g.: ValuePenguin, they also provide an overall comparison and overview of many brokerage companies all at one glance. With research and support of these sites you can therefore make an informed and valuable decision.
You can go to DBS VICKERS directly and follow these simple steps:
· Activate “Foreign Markets Trading”
· Log in to DBS Vickers with your details
· Go to “My Account” and select “Account Management”
· When you are ready to trade in the market all you have to do is click on “Accept/Acknowledge”
(Note- For this procedure also the form is mandatory to fill)
Market is risky, Stay safe out there!
Do ask if you have any more questions.
Consider using TD Ameritrade as a broker for US share transactions. A bit of a hassle as in you will need to remit USD to their account in the US, but if you use DBS, there are no remittance charges. Commissions are lower compared to local brokers, with no other fees like dividend handling or platform fees. Account opening is relatively straightforward and you can do so online, with the submission of the w8-ben form being the only physical document (if I remember correctly) to submit.