Is there any easy way of being able to tell when buying a stock whether it is partly paid (i.e. that owning the shares will mean that you will have to pay a further amount in the future)?
Is there any easy way of being able to tell when buying a stock whether it is partly paid (i.e. that owning the shares will mean that you will have to pay a further amount in the future)?
Normal stock codes have 3 letters "BHP" for example, any code with more then 3 letters is not a "normal" stock and will thus require a greater understanding.
Is there any easy way of being able to tell when buying a stock whether it is partly paid (i.e. that owning the shares will mean that you will have to pay a further amount in the future)?
Partly Paid shares (also known as contributing shares) have 2 letters added after the code - CA to CZ expect for CP. When a call is made on part or all of the outstanding amount, shareholders are legally obliged to pay that call unless the share is a No Liability (NL) type.
Because many of the shareholders of some high profile ctg shares claimed that they did not know they were legally liable (Julia's Brisconnections being a classic example) for meeting the payment of the calls, the rules have changed.
It is now a requirement for brokers that retail clients must firstly sign a client agreement to acknowledge that the client fully understands the risks involved. So, you will certainly know when you are buying a pp (or ctg) share.
It is now a requirement for brokers that retail clients must firstly sign a client agreement to acknowledge that the client fully understands the risks involved. So, you will certainly know when you are buying a pp (or ctg) share.
Regardless of which type of broker, they are now required to delay the purchase until you acknowledge the risk. It would be interesting to know what happens when using an overseas internet broker.
It seems like a reasonable question to me.
I don't know the mechanics but it wouldn't be difficult for the broker to email a statement to the client for him to sign acknowledging the details of the stock, client to sign, scan and email back to broker.
A little over a decade ago, when I was considering the possibility of trading warrants, I needed to tick a box on my trading platform (indicating that I'd read and understood the ASX publications on these products) before I could commence placing orders for such instruments.
I was trading with National Online Trading at the time.
I'd expect similar precautionary measures to be in place with other brokers.
It seems like a reasonable question to me.
I don't know the mechanics but it wouldn't be difficult for the broker to email a statement to the client for him to sign acknowledging the details of the stock, client to sign, scan and email back to broker.
A little over a decade ago, when I was considering the possibility of trading warrants, I needed to tick a box on my trading platform (indicating that I'd read and understood the ASX publications on these products) before I could commence placing orders for such instruments.
I was trading with National Online Trading at the time.
I'd expect similar precautionary measures to be in place with other brokers.
Spot on mate. Dyslexic on my part. I meant CA, CB etc. but have been looking into hybrids recently so got my wires crossed. Apologies and good pick up.
A long, long time ago, I bought ECMCA East Coast ctg. NL (10c shares paid to 1c)
First of all, they were NL shares, so I would lose no more than I put in.
Secondly, one of the directors held most of them.
A call on them would hit his own pocket.
Thirdly, they were in uptrend at the time.
IMO That is the minimum research level to which one should go to avoid tragedy!