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  1. #1
    Member
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    Sep 2019
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    Default TD Ameritrade CLOSES down all NZ accounts

    I have been a client of TD Ameritrade (online brokerage) for over 20 years (from the Datek days in 2001 to acquired by Charles Schwab in 2020).

    Yesterday, they advised me that "Following an internal assessment of our international business, we have determined we will no longer open or maintain accounts in certain international jurisdictions. We are contacting you because your account is affiliated with at least one of these jurisdictions. We regret to inform you that we will no longer permit the opening or maintaining of accounts in New Zealand effective November 1, 2021
    ."

    Has New Zealand done something to upset the US IRS or other authorities, to the point that it's not worth the hassle now for US-based online brokers to have NZ clients?

    I am a bit shocked to be honest.

    Is it part of a general trend? Or is it only Charles Schwab and can anyone recommend a broker to trade shares on NYSE/NASDAQ as cheaply as Schwab? (it became free last year, prior to that it was US$6.95 per transaction, down from US$9.99 per transaction up to 2017).




  2. #2
    Advanced Member
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    Default

    I use Interactive. Brokers. Ok, but not as cheap as you describe.

  3. #3
    Senior Member
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    Default

    I should contact TDAmeritrade as I would be interested to know if it affects Canadian client holders. Pre-covid I received a similar message from them regarding about NZ's FMA rule that if the brokerage firm trades options, that they "Must be licensed by the NZ FMA". The writing on the wall is clear and I knew eventually TDAmeritrade and many US brokerage firms will not accept that kind of non-sense by the NZ FMA. The issue being is FMA claims any foreign broker that serves to NZ clients will be doing so illegally, if they are not licensed by the FMA. Can you understand how moronic this sounds that a foreign country is telling your brokerage firm how you should conduct business with foreign clients? What legal capacity does the FMA have in US soil?

    So it's quite simply clear, the vast majority of brokerage firms will not conform with the FMA's licensing scheme (as you know there are conditions for FMA licensing). I noticed the FMA website FAQ has been updated as their previous wording was clear that foreign brokers that do deal in derivatives, are serving NZ clients illegally if they are not licensed.

    Could simply be a compliance issue that TDAmertrade is not willing to bother with and NZ being such a small market, it's far easier to close those clients. The idiocy about this is Charles Schwab is larger than any NZ/Australian bank and yet the NZ FMA is about trying to protect the NZ investor. None of the banks and brokers in NZ offer investment or cash depository protection while in the US, the FDIC insures up to $500K per account and with Charles Schwab, they are SIPC insured on balances up to $150M per account ; including foreign account holders.

  4. #4
    Junior Member
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    Aug 2021
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    Tauranga
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    Default

    Thanks for starting this thread Toukshare. I too have had this notice from TDA. That's four accounts including other family members.
    After having such a powerful website and free trading, it's hard to identify a suitable local replacement. Interactive Brokers is on my short list, though their monthly fee is a little off putting.
    eg NVDA took an ER dip this morning, afterhours, and I was able to top up. You can't do that with the local brokerages, except for IB, as I understand it. Would be interested to hear which brokerage others in our situation have settled on?

  5. #5
    Legend peat's Avatar
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    Aug 2004
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    Whanganui, New Zealand.
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    Default

    Quote Originally Posted by Toukshare View Post

    Is it part of a general trend? Or is it only Charles Schwab.



    Oanda FX did the same to me a while back...
    we're too tiny , they cant be bothered to deal with our jurisdiction.
    For clarity, nothing I say is advice....

  6. #6
    Asleep at the Wheel?
    Join Date
    Apr 2020
    Location
    NZ
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    Default

    So, I'm in the same position.
    I have been with TD Ameritrade for years and they are now closing the account.
    I sent a request to explain and they have just replied with a "sorry we can't revisit the decision" but no actual explanation.

    I have seen Interactive Brokers discussed a lot. Does anyone have comments on this or any other alternative brokers?

  7. #7
    Asleep at the Wheel?
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    Apr 2020
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    I have just sent a note to the FMA asking...

    "Will you please give TD Ameritrade any exemptions required to allow NZ residents to hold and operate a TDA account?"

    perhaps if everyone asks the same question the FMA might consider it.

  8. #8
    Senior Member
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    So i've been digging up some valuable information and I think this thread would be quite important for those in NZ looking to establish an overseas brokerage account.

    In hoping to save some time (so others don't have to email the same question to these brokers), i'll share what information i've gathered.

    https://www.stockbrokers.com/guides/...tional-brokers

    As the review above states, there are very FEW US brokers that deal with international clients. Some of the larger brokers do offer services to overseas clients but not to New Zealand residents. So far:

    - Fidelity only offers accounts to countries: United States, Guam, Puerto Rico, and US Virgin Islands.

    - ETrade - only US customers

    I may well be pretty much any other major N. American brokerage firm have following the same by not offering services to NZ customers due to NZ's nasty FMA.

    Having only 3 brokers for NZ residents is pretty slim picking. So far I think IB would be the best pick having the greatest international exposure and a long term reputation in the early day trading days of dotcom.

    Firstrade: i've been in contact with them and they will offer full options and margin accounts for NZ residents. However, this is for ONLY INDIVIDUAL accounts and not joint accounts. I do think this is an important distinction as US has estate taxes assessed on foreign account holders at a whopping 30% (if I recall correctly). So if the individual dies, and Firstrade is presented with a death certificate, then estate duties will kick in by the IRS. As far as account maintenance in paper compliance goes, the W8BEN forms are done online electronically by the account holder (no more hand writing them out and scan emailing them, the every 3 year update is done through their website for easier compliance).

    Tradestation from what I read is UK based but follows along the lines of IB. I have not contacted them yet. Perhaps others may know?

  9. #9
    Asleep at the Wheel?
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    Apr 2020
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    NZ
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    SBQ - In my very quick first look I found this website
    https://brokerchooser.com/broker-rev...s-alternatives

    where it says "TradeStation Global is a combined product offered by Interactive Brokers (IB) and TradeStation for clients outside the EU/EEA."

  10. #10
    Asleep at the Wheel?
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    Apr 2020
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    NZ
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    Default

    and this NZ review is good reading

    https://www.moneyhub.co.nz/interacti...html#pros_cons

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