In most “the Apple”: how to buy foreign securities in Ukraine

В самое "яблоко": как купить иностранные ценные бумаги в Украине

A shareholder in the American Corporation Apple today may become any citizen of our country in July “Ukrainian exchange” held the first transaction for the sale of securities of the “Apple” giant. The first 95 shares were acquired by AMC “Ate.Di.Asset Management” the company “BPS Broker”, a Depository institution, which first started shares of Apple in Ukraine in February 2019.

The decision in “BPS Broker” explained an attempt to test the mechanism and understand the potential demand for shares in foreign companies.

Used to “test” the brokers did not work for several reasons. One of them was quite a complicated procedure for obtaining permission to trade in securities. “The Director of a company that wanted to introduce in Ukraine stocks or bonds of foreign companies had to apply to the National Commission for securities (SCS) with a request to give permission to sell these securities in our country. It was a complex procedure, which is not in other countries,” says Delo.ua Director of business development of “Ukrainian stock exchange” Alexey Sukhorukov.

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From the end of 2017 simplify the procedure, and now any Ukrainian broker applies for a permit not to the Commission and to the National Depository of Ukraine. NDU as the mediator gets from NSSMC permission for circulation of shares and bonds of foreign companies on the stock market. These securities are purchased with foreign brokers for currency and sold in Ukraine – only in hryvnia.

Step by step instructions

The Ukrainian, who wants to buy “Apple” stock, go to NDU or in the securities Commission is not necessary. But certain steps towards a brighter investment future him to do still have.

Step one. Directly to buy shares of Apple or any other foreign company does not work, you need to refer to licensed brokers or investment companies. In Ukraine a few dozen. To choose a suitable option on the market. “The main requirement must be licensed. Check the body that issued the license, its number and expiration date. This applies to classical brokerage services on the securities market”, – said in a comment Delo.ua head of Department of Analytics GK FOREX CLUB Andrey Shevchishin.

When choosing a broker you should also consider the cost of his services. “In discussing brokerage services, it is important to discuss the movement of funds and ownership of securities in the conduct of operations. Money should be identified at each stage of movement as your own. It should not be a situation where you can’t control the money and carry with them the necessary actions. Also make sure that the purchased securities are credited to your account with a custodian and you have the corresponding statement”, – says Andrey Shevchishin.

Step two. If the mediator decided to have with him a service agreement. According to Andrey Shevchishin, such a contract generally standard. Any changes are only made for certain categories of VIP or premium customers. “You should pay attention to brokerage fees, Commission, deadlines, responsible parties, reporting and account for the funds and securities”, – said the head of Department of Analytics GK FOREX CLUB.

Step three. The broker or investment company to open a special securities account, which gives the opportunity to buy and sell securities of foreign companies in organized market exchange. While Apple shares are traded on the Ukrainian exchange and the PFTS.

The issue price

As shown by the first transaction, while in Ukraine the price of shares in foreign companies are higher by about 10%, than abroad. This is due to the expensive operating costs when buying shares on foreign exchanges and convertibility of the national currency.

First, you will have to pay for services “Design center” which accumulates all banking transactions in Ukraine. He takes 300 UAH in a single operation regardless of the number of shares that are bought.

Second, the cost of the services of the broker, according to the Director “BPS Broker” Roman Osipov, will cost 0,1% of transaction amount, min UAH 300. The Commission UAH 300 includes all of the Commission, including the stock exchange. “Package worth more than 100 thousand UAH, in storage, will cost 0,01% from the nominal value”, – says Roman Osipov.

Considering all costs, it makes sense to buy shares of foreign companies in Ukraine, according to Alexey Sukhorukov, only when we are talking about buying a large stake from $20 thousand. In his opinion, the shares of foreign companies on the same amount to have in Ukraine agree to any broker. “If we are talking about a small stake – $1000, that overhead will cost the customer more than yourself campaign”, – says Alexey Sukhorukov.

Beyond

While trade shares of foreign companies in Ukraine, only tested, experts advise to buy them abroad – in the markets where they have the greatest turnover.

For this you need to open an account abroad using a foreign broker. “When in 2017 I opened the account in the EXANTE, Malta, I did not go there, and sent them scanned copies via e-mail three files – the internal passport, a foreign passport and a copy of the invoice which confirms that I live in Ukraine. Through the day I had the account I sent the money and on the same day I bought the shares”, – says Alexey Sukhorukov.

Foreign broker can choose from among those that are on foreign exchanges. In order to protect their investments, the securities Commission recommends that you contact the brokers that are licensed in the EU or in countries with similar European regulatory regime. These countries include USA, Canada, Australia, Singapore, Hong Kong, Brazil, Japan and others. “Introduced in these markets, the standards of regulation and supervision significantly reduces the risk of fraud with the investors’ assets, but not eliminate them completely,” – noted in the NSSMC.

In this regard, an important factor when choosing a foreign broker, according to Andrey Shevchishin, is the Fund guarantee that exists in many jurisdictions – all the developed countries (EU, USA, Britain, Japan and so on), but there is in some developing countries. “In the case of fraudulent actions, the victims will receive compensation from the Fund”, – said Andrey Shevchishin.

For the services of foreign intermediaries charge a Commission: $10 to $ 20 for each transaction. Also, brokers sometimes charge a fee for account maintenance – $10 to $60. In addition, you will have to pay a Commission to the exchange. London stock exchange, for example, will charge 0.5% of the transaction amount and fee on the turnover of purchase or sale.

Take charge of the Bank for the transfer of money. It depends on the Bank, but the average is from $20 currency bills.

But abroad the responsibility of the broker is insured, and this means that in the event of bankruptcy the investor’s money will not be wasted.

If you open an account with a foreign broker directly does not work, it is theoretically possible to make it through the Ukrainian sub-broker. In practice, this service Ukrainians is not yet available.

For your money

What can you buy instead of money spent and effort? In addition to the prestigious status of a co-owner of Apple or such global giants like Amazon, Facebook, Netflix, our investor can rely on income from dividends and income from fluctuations in stock prices. For example, the Apple dividend is not fixed. “In meetings the company itself decides what percentage of earnings to distribute among its shareholders. The money transferred to the account of the National Depository of Ukraine in the international Depository Clearstream, and then distributed among investors. It is worth noting that dividends can be obtained in foreign currency. But according to US law, 30% of the dividend amount levied as a tax levy,” says Director of AMC, “Eat.Di.Asset Management” Anna Vysochanskii.

It considers investments in shares of international companies perspective, if buying a large stake and invest for the long term. However, some of their Apple stock AMC “Ate.Di.Asset Management” is planning to put up for sale. it is not known when it will happen, but according to experts, this sale is necessary not only individual investors but also for the whole Ukrainian stock market, as it will help to determine how he fits in to the new financial instruments. “If we want to move forward, it is necessary to take corresponding steps in this direction. These steps are not always obvious. And not always, they have a direct benefit. But the end result will be positive for Ukrainian investors”, – said Alexey Sukhorukov.

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