CommSec stock ownership

[Samantha Jade]

Hello, I’m sorry for what may be a rather simple or obvious answer to my question, but here I am nonetheless so thank you for bearing with me in advance . I saw a video some time back relating to the ownership of stocks. To simplify my limited knowledge, apparently some brokerages let you buy the stock but legally it’s under their own name so although you can buy sell etc, legally they own it. I was wondering whether this was the case with CommSec or is it legally under your own name?

kind regards, Samantha

 

[Trav.]

@Samantha Jade welcome to ASF

Short answer is that you have legal ownership of the shares traded with Commsec when you register your shares ( done by commsec ) and you receive a Holder Identification Number (HIN)

More information in the link if you want to know the nitty gritty

https://www.asx.com.au/documents/resources/chess-brochure-march-2016.pdf

 

[Smurf1976]

I was wondering whether this was the case with CommSec or is it legally under your own name?

Firstly, welcome to ASF!

Simple answer as Trav said is you own the shares.

CommSec is ultimately just the middleman in the transaction. They will buy or sell on your behalf for a fee (their brokerage fee) but ultimately you own the shares.

So you buy shares in (for example) Telstra tomorrow morning. You'll see the shares appear in your CommSec account immediately and will later receive paperwork including your HIN.

 

[Samantha Jade]

@Samantha Jade welcome to ASF

Short answer is that you have legal ownership of the shares traded with Commsec when you register your shares ( done by commsec ) and you receive a Holder Identification Number (HIN)

More information in the link if you want to know the nitty gritty

https://www.asx.com.au/documents/resources/chess-brochure-march-2016.pdf

View attachment 99878

Thank you for your reply, sorry if this is another stupid question, so In CommSecs case then were you to change what brokerage you’re dealing with you could transfer your stocks?

 

[Boggo]

Welcome Samantha.
Never be afraid to ask around here as there is always someone with extensive knowledge in every area and the only stupid question is the one you don't ask.

 

[Trav.]

All in the link provided, so yes when you transfer brokers you can complete an off market transfer request and for a fee they will transfer across in 2 - 3 days

https://www.commsec.com.au/support/frequently-asked-questions/15.html

 

[Smurf1976]

Thank you for your reply, sorry if this is another stupid question, so In CommSecs case then were you to change what brokerage you’re dealing with you could transfer your stocks?

No such thing as silly questions....

Yes, you could buy using one broker and sell using a different broker if you really wanted to.

Under normal circumstances that's not something that someone would do, changing brokers is something that people don't normally do frequently without good reason, but it's possible to do it certainly.

If CommSec ceased operating or worse still went broke then ultimately you own your shares and can sell them with another broker. You'd just have to open an account with some other broker, quote the details (HIN etc) to do so but it can be done certainly.

 

[Samantha Jade]

Thank you all for your kindness and wise words, I was slightly concerned that the ownership might be the case with most brokerages but now I’m much more confident, thank you all

 

[Smurf1976]

Something worth mentioning here is where the cash is held. That is, the cash that you've deposited and are going to buy shares with or which is realised from a sale of shares you own.

From a safety perspective I wouldn't choose to use any broker that didn't have the cash held in a proper bank account in my name.

For obvious reasons CommSec will encourage you to use a bank account with the Commonwealth Bank to hold the cash although I'm pretty sure they will link to an account with a different bank if that's your preference. Either way though the money's in a proper bank account or it's in shares, it's not sitting in the broker's hands.

 

[Sharkman]

the other type of brokerage you were thinking of is known as the nominee or custodian account model, where the broker is the legal owner and you, the customer, are only the beneficial owner. IB (Interactive Brokers) is a well known example.

they aren't necessarily bad, they typically have access to more international markets and lower brokerage rates (especially for international trading) than CHESS brokers. some will be SIPC members, protecting up to 500K USD in the event of broker failure (though sadly this is no longer the case for Australian IB customers).

maintaining accounts of both types could be a viable approach depending on circumstances and investment objectives.

 

[willoneau]

Something worth mentioning here is where the cash is held. That is, the cash that you've deposited and are going to buy shares with or which is realised from a sale of shares you own.

From a safety perspective I wouldn't choose to use any broker that didn't have the cash held in a proper bank account in my name.

For obvious reasons CommSec will encourage you to use a bank account with the Commonwealth Bank to hold the cash although I'm pretty sure they will link to an account with a different bank if that's your preference. Either way though the money's in a proper bank account or it's in shares, it's not sitting in the broker's hands.

You used to get a lower commission rate if held with Commonwealth but not sure now since lower rate.

 

[Samantha Jade]

hello again, thank you all for your very kind words and help .
I was wondering, would you advise trading international shares via commsec? i was reading the terms and conditions and i found something about international custodians and that commsec is not liable if we incur any losses due to our international custodians committing fraud, negligence or so on?
Is commsec the more recommended trading platform for both australian and international shares?

also apologies as i realize this is not inherently relevant to the thread, however, why is it advised that you build up a capital or steady income stream before you begin investing? Would it not be a good idea to sit upon investments no matter how small they may initially be?

 

[frugal.rock]

hello again, thank you all for your very kind words and help .
I was wondering, would you advise trading international shares via commsec? i was reading the terms and conditions and i found something about international custodians and that commsec is not liable if we incur any losses due to our international custodians committing fraud, negligence or so on?
Is commsec the more recommended trading platform for both australian and international shares?

also apologies as i realize this is not inherently relevant to the thread, however, why is it advised that you build up a capital or steady income stream before you begin investing? Would it not be a good idea to sit upon investments no matter how small they may initially be?

Cudos for actually reading commsec TC's.
Trading platform is your decision. Personally, I have avoided overseas markets exposure due to inexperience.
You might want to look at Selfwealth as a broker, and possibly as an sample investment.?
Many posters here will trade intraday or weekly, so don't sit on investments, that's not to say it's not a good idea though.
Divided reinvestment plans and compounding might be something you are interested in.
If you like sitting on things... consider investments like eggs...
your the mother goose, tend to your investments, sit on them, keep them warm..., every so often, an egg will hatch, release/ sell time?
Or watch the hatchling turn into a hissing beast threatening the competition?
Or, realise that the cuckoo has played you... and your investment flies away, never to be seen again.
Up to you about sitting.
Personally, I like the thrill of earning a days wage in 3 minutes or 3 hours.
3 days gets boring... especially for a days wage....
Enjoy your journey!
F.Rock
PS; There is a artist/ singer by the same name Samantha Jade. Any correlation?