"Re commissioning" allows you to invest without borders

        In addition to buying and selling Taiwan stocks, many people have become increasingly interested in investing in overseas financial products in recent years. According to statistics from the Securities Association, the transaction amount of repeat orders reached NTD 4.48 trillion in 2023, setting a new historical high. The number of account openings was 4.6555 million, an annual increase of 857400 people, especially in the US stock market. The cumulative number of US stock regular and fixed quota customers in the entire market was 111263, a growth of 124%; The cumulative number of regular stock placement clients is 57295, with a growth rate of 29%. The total trading volume of US stock deposits is NTD17.4 billion, with an annual growth rate of 86%. Do you also want to participate in overseas investment, but don't know where to start? This issue of "Finance Column" takes you easily to get started.

        What is re commissioning?

        The official name of sub brokerage is "entrusted trading of foreign securities business", which refers to the investment method of entrusting upper level securities firms in Taiwan (such as Far Eastern International Securities) to buy and sell overseas stocks, ETFs, and other commodities. Because investors place orders with Taiwanese securities firms, which then place orders with overseas securities firms or exchanges, the entire process goes through two commissions, hence it is called "re commission". At present, the re entrustment services provided by major securities firms can be divided into three types: "single transaction", "fixed period", and "fixed period".

        Documents required to open an account

        The account opening method for re entrustment is the same as that for general securities. By preparing the following information, you can open an account at the securities firm.

        1. Personal seal.

        2. Original ID card, passport, original residence permit (within validity period), and second identification documents (health insurance card, driver's license).

        3. A photocopy of the designated bank passbook (for re orders, delivery can be made in either Taiwan dollars or foreign currency. When receiving distribution interest, it will be recorded in the selected currency, but after selecting the currency, it cannot be changed arbitrarily. The advantage of foreign currency delivery is that it can avoid being affected by exchange rates for each entry and exit).

        Handling fees for re commissioning

        Regardless of whether to buy or sell, a handling fee must be charged. The handling fee for various securities firms in Taiwan is about 0.15-1%, but it is important to note that there is a "minimum handling fee threshold" for repeat trading. For example, the minimum handling fee threshold for a securities firm's listing is USD35. If an investor buys 10 shares of Company A's stock for USD100 per share, the transaction amount is USD1000. If the handling fee rate is 1%, although the handling fee for the transaction is USD10, the investor still needs to pay USD35 as a handling fee. However, in the fiercely competitive market, multiple securities firms have offered free and low consumption discounts for "fixed term quotas". Investors may want to gather information and compare more to avoid increasing trading costs.

        The advantages of re delegation

                1. Investment without borders: With just one account, one can invest in multiple stock markets and easily become a shareholder of brand companies such as Apple and Tesla.

        2. Diversification of Products: Currently, Taiwanese securities firms can be entrusted to buy and sell underlying securities, limited to trading "stocks", "ETFs", "bonds", "preferred stocks", and "overseas structured commodities" in overseas securities markets designated by the Financial Supervision Commission.

        3. Rich asset allocation: Investing in Taiwan's stock market can only enjoy Taiwan's economic growth; Through the method of re commissioning, investment portfolio allocation can be carried out according to individual investment needs, diversifying investment risks and increasing profits.

        4. Protection by Taiwan regulations: Legitimate securities firms in Taiwan must be regulated by the Financial Supervision Commission, which provides higher protection and security compared to overseas securities firms. In the event of disputes, investors can also receive legal protection.

        5. Funds do not need to be remitted overseas: By using the method of re entrustment, funds do not need to be remitted overseas, which is more secure for investors and can avoid exchange losses and remittance fees offsetting the return rate.

        Although the entrusted investment method has the above advantages, most overseas markets do not have price limits and cannot be traded with credit, and the trading hours of stock markets in different regions are different. For example, the trading hours of US stocks are divided into summer (21:30-4:00) and winter (22:30-05:00); The Hong Kong stock market is divided into morning trading (09:30-12:00) and afternoon trading (13:00-16:00). It is recommended that investors first do their homework, evaluate their own financial resources, and then make plans in order to calmly carry out diversified allocation of overseas assets and create more wealth.

        Image source: freepik

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