You can’t buy any shares without a stockbroker or an online trading account. So, we have established a strong, long-term relationship with a reputable broker, which gives you amongst the cheapest rates for brokerage available in Australia and specialised personal service.

If you have one already - that’s fine - just make sure they can buy shares on other exchanges like American shares. Also, make sure they allow you to place “conditional” trades like “limit orders” and “stop losses”. If they say no – then you have the wrong broker.

Opening a new brokerage account can take up to a week or more depending on the type of account you open – so, make this your first priority… it’s no use getting all excited about a new investment and not being able to buy it. Remember – Brokerage Account Opened First!

Our Preferred Broker is:

Halifax Investment Services Pty Limited

Benefits – Discounted rates, Free Weekend Financial Review subscription, personal service, access to margin lending,

We have arranged very special rates and the ability to download your own trading platform with Halifax. We have been allocated Trident dedicated staff to specifically look after the needs of our clients. It is therefore, very important that you only speak to them, as they have been fully briefed on the services available exclusively to us. Please see below for all of the specific details of our arrangements and how it works plus our special contacts.

If you do happen to open an account with Halifax with $1000 initial deposit Halifax will give you a 1 year subscription to the Weekend Financial Review. This will happen automatically once you have opened and funded your account. If you have any queries about this, please email: cassie@halifaxonline.com.au

Brokerage Costs

Halifax has done a great deal for our clients and they have structured our brokerage to be the best value package of any Australian broker. Most clients will only pay AUD$18.95 and US$13.50 for most trades as they have been structured around most transactions being $10,000 or less.

Australian Shares:  0.1895% of trade value, with an $18.95 minimum. Therefore a trade of any amount up to $10,000 will cost only AUD$18.95.

US Shares: 0.03375 cents per share, with a US$13.50 minimum. American listed shares charge brokerage per share, not by value. That’s why US shares tend to be more expensive. Having cheap shares in the US is an investor disincentive. Therefore, to say buy US$10,000 worth of shares at say $25 per share will cost US$13.50. or 400 shares at $0.03375 = US$13.50 each additional 100 shares will cost an extra US$3.38.

Platform – Interactive Brokers (IB) known as Trader Work Station (TWS)

Note: With Halifax IB is known as the Trader Work Station platform - TWS, so anywhere IB is referred to, it means this.

  • The IB platform (Trader Work Station) offers instant margin lending through a company account
  • The IB platform (Trader Work Station) offers Trailing Stop Losses that move up as a percentage (25%) of the last intraday high.

We explain how to use the platform a little further into this Guide.

Open an Account Today

Please use this direct link below to get your special benefits. 

1. I want to open an account and just use the Interactive Brokers Platform: Click Here. Has Margin Lending through a company entity account, not Trusts or SMSFs

Remember, you must not only open the account but transfer funds as well, otherwise you can’t place a trade. Money first, then you can invest.

1.      Click on the link above for the platform

2.      Fill in the online application form

3.      Using the Identification guide, please organise and supply required ID

4.      Once application is received, Halifax will contact you for any additional information

5.      Account is processed and a confirmation email with funding and account details will be sent

6.      Once the funds have been received our account liason will contact you, go through the process and an account manager will be allocated to you.

7.      You will receive a 12-month free subscription for the weekend Financial Review, starting within 14 days of first deposit over $1,000.

Who do I contact? I need some help!

I need help with opening an account

Email: admin@halifaxonline.com.au

They’ll usually get back to you very quickly. Or you can ring (02) 9241 4321 Option 3 and ask to speak to your account manager.  

I have filled in an online application, but I have heard nothing back as yet? Email: admin@halifaxonline.com.au

When you fill out the application online, you’ll be immediately sent a confirmation email – if you don’t get one in a few minutes contact the email address: newaccounts@halifaxonline.com.au

I have opened an account and need help with a technical issue

Email: helpdesk@halifaxonline.com.au

or Call 1300 363 505  or 02 9241 4321 and select Option 1

They’ll be able to guide you through the use of the platform.

I have a query about my Free Weekend Financial Review Subscription

Email: Kim Adie kim@halifaxonline.com.au

Don’t use the “open an account today” links to contact Halifax once you’ve opened an account. You’ll just end up opening another account. All the contact details you need are listed in this section.

Contacts

Broker Contacts - Halifax Investment Services

Administration: 

Lilly Case                         admin@halifaxonline.com.au

Administration/Free Weekend Financial Review Subscription:

Kim Adie                               kim@halifaxonline.com.au

Support/Trading/Stock Transfers/

Michael Clissold:         Clissold@halifaxonline.com.au

Andrew Graham:         graham@halifaxonline.com.au

Joseph Lum:                 lum@halifaxonline.com.au

Halifax

Phone: Sydney: 02 9241 4321

Australia Toll Free : 1300 363 505

Outside Australia :  +61 2 9241 4321

Fax: +61 (0)2 9241 4331

Address: 
Governor Phillip Tower
Level 49, 1 Farrer Place

SYDNEY NSW 2000 

Next Step

Once your account set-up is in train, you can look at the following sections in Broker Details to see how they work, how to place trades, stop losses, trailing stop losses etc.

Note On Using The Platform Using Macbook Pro

You need to install Parallels or VMWare Fusion to run Windows so that trading can be continued with Halifax. It costs approximately $50.

Is It Safer To Use A Broker With Chess Or Through A Custodian?

Chess gives you direct ownership of the stocks you have bought but only works for Australian stocks. For US stocks, even those brokers who use Chess in Australia use a custodian system to hold US stocks where the custodian holds the stocks on your behalf.

One of the most popular platforms to trade US and Global stocks, Interactive Brokers (IB) use a “custodian type system”. What I mean by a “custodian type system” is that a third party or a separate entity holds shares on your account, as distinct from the actual broker through their own trading account.

In the case of IB they do not encumber your shares against any of their trading activity so if they go broke, the separate “custodian entity” remains intact and not put at risk, which is heavily regulated.

Sure some brokers like MF Global have used client funds for their own trading operations (and made a mess of it) – you simply don’t use brokers who could be in a position to do this – IB does not.

Also, broker’s dealers may use a proportion of holdings that are leveraged in the brokers own account in much the same way as a bank may register an ownership interest in your house until it’s paid off. They use your margined shares as collateral to borrow the money from the bank that they have lent you to buy shares on margin, so makes sense. If your holdings are unemcumbered (and not leveraged), then they are not at risk from any disaster that may befall the broker dealer.

It’s more likely that you will lose your money holding a bad company, rather than investing through a bad broker.

Also, on the matter of leverage, at this time of year (May-October) it’s wise to reduce leverage if you have any, as leverage is you encumbering your own stocks and could cost you dearly in any serious pullback.

While I personally have a Margin Account with Interactive Brokers through Halifax, I don’t allow it to ever run into a leveraged situation – I have it to allow options leverage and if there’s a chance to buy a lot of shares very cheaply (along the lines of February 2009).

You need to have a registered company to have a leveraged account with IB however. They don’t allow individuals of SMSF’s to have leverage.

However, my best advice is, make sure your broker uses a custodian of separate entity which is totally unemcumbered from other trading activities. However, the authorities are all over this issue so it’s unlikely we’ll see another MF Global scenario.

What’s more, regardless of whether a “custodian entity” hold shares on your account or whether you have a direct account through Chess for Australian shares, the company who you have shares in knows they are owned, so they are not going anywhere, you still own them either way.

It only becomes a problem if your broker dealer encumbers them in some way that risks increase, so avoid margin and avoid brokers who don’t clearly state that the shares they hold on investor’s behalf are held by a non-trading entity who has no interest in them. IB fits the bill and regulators ensure they stick to their stated policies.

Trading with Halifax – Commonly Asked Questions

General Questions:

Which markets can I trade?

Stocks, Options, Futures and Forex, worldwide, from one account

Do I need US Dollars for US Shares?

In the Interactive Brokers platform, the account has an innovative way of reducing exchange rate risk on your capital when trading US shares. You can fund your account in Australian Dollars, and when you want to trade US shares Halifax will provide you with the US Dollars you need to do so. Your Australian Dollars just sit in the account and do not get exchanged, and you can have a negative USD balance, meaning that you are borrowing the funds. Alternatively, you may convert the funds yourself if you wish.

What if I have US dollars - can I fund my account with that?

That is not a problem, after account is set up, you can transfer across USD over to Halifax's USD suspense account held with Bank West, then we can transfer this across to your trading platform.

How do I reduce Exchange Rate Risk?

If you are using the Interactive Brokers platform, you have two choices here: first is to convert funds into USD, and be exposed to the exchange rate risk, OR you can keep it in AUD, and borrow USD for the trade. This way you will pay interest on a negative USD balance (but not earn interest on the positive AUD balance), so there is an added cost for doing it this way. The cost though could be potentially a lot lower than what you could lose out on the exchange rate.

For example, say you had 10,000 AUD in the account, and put on a trade for 5,000 USD of stock. Your account cash balances would show:

AUD       10,000

USD       -5,000

You would pay interest on the borrowed USD, but then if you sold the stock at break even, and received 5,000 USD, your account cash balances would be (not including the interest):

AUD       10,000

USD       0

So basically you have a choice whether you want to accept the exchange rate risk, or pay interest to borrow the funds.

Are cash funds held in an account in my name?         

All Halifax client monies held by Interactive Brokers LLC are held by it for the benefit of Halifax clients in individual or omnibus client accounts that are segregated from the funds and assets of Interactive Brokers LLC itself. Interactive Brokers LLC does not commingle its own monies with Halifax client monies. Funds are held at BankWest owned by Commonwealth Bank of Australia.

Are shares, either US or AUD, held in my name or by Halifax in trust for me? Do I get Chess Confirmation for AUD shares and share certificates for US shares?

Holding statements are issued for stocks held under a HIN number, however when trading through an online trading platform the shares are held by an independent custodian. The AUS stocks are held by Interactive Brokers & the US stocks are also held by Interactive Brokers.

This means that rather than being held under your name, they are held on your behalf by the custodian/platform provider and holding statements are not issued.

However, you are still able to get statements for your account that show the shares bought and sold and these should serve the same purpose in terms of reporting for tax, etc. You can get these directly from the platform under the Account menu - Account > Statement/Financial Statement.

All positions are settled "back to back" in the market place. Halifax does not use client's funds to operate its own balance sheet and therefore no client's funds are used in any capital expenditure.  

Cassandra Moloney at Halifax is happy to go through this with you if you like. You can call her on 02 9241 4321 option #5

Or email cassie@halifaxonline.com.au

I have a Self-Managed Superannuation Fund – Can I open an account for that?

Yes. You can have accounts for individuals, joint names, partnerships, corporations, trusts and superannuation funds

What if I don’t live in Australia?

Halifax can accept clients from all over the world

Can I use a margin loan?

The IB platform is a margin trading account, which means that you can trade shares at typically up to 50% margin (most stocks are available however some of the more risky stocks are not marginable) but only if set up in a company entity. Individuals cannot open a n account with margin. We express caution with using leverage and should only be used by experienced investors.

The IB platform margin requirement is typically up to 50% (it can be lower, but will revert to 50% at the close of business NY time). This means that to trade $10,000 worth, you need to have at least $5000 in your trading account.

The interest charged on borrowed funds is based on the relevant rate of that currency with a mark up, for example on USD interest is charged on the Fed Funds Effective (overnight rate) + 1.5%. At the moment this makes it 1.7%, although this changes each day.

Can I place a stop loss?

Yes. You can place a stop loss after you have purchased your shares or attach it to a buy order so your capital is protected from the instant the shares are purchased. A stop loss will remain at the same price until it is triggered, cancelled or changed manually.

What about a trailing stop loss?

Yes you can place a trailing stop loss. A trailing stop can be placed either at a fixed % (IB only) or a fixed $ amount from the highest price a share reaches. The highest price is calculated in real time, intraday, and begins from the point the trailing stop is placed.  As the share price increases the system will automatically increase the trailing stop price. If the share price drops, the trailing stop remains the same, thereby protecting profits and capital.

Payment of Australian Dividends with the TWS Platform

The payment of dividends via the TWS Platform is a little different to what you may be used to. As the shares are, in effect, held by Interactive Brokers the dividends are paid directly to them and then immediately and automatically apportioned to your account.

In the case of Franked dividends, the franking credit will accrue to you as an Australian resident and you will be able to claim it on your tax return.

In the case of un-franked dividends, these will have a 30% withholding tax deduction made as they are paid to a foreign entity (IB) and this 30% deduction will be claimable by an Australian resident as "tax already paid" in exactly the same was as when you forget to tell the share registry your tax file number and they deduct 46.5%.

In effect - all Australian resident shareholders using IB will receive 100% of their tax entitlements as they would with any other broker. The full details of dividends credited to your account will be itemised detailing gross dividend, franked amounts, unfranked amounts, franking credits and withholding tax paid for inclusion in your tax return.

You'll be able to view these transactions on your account and Halifax will produce reports for year-end tax preparation. Where dividend re-investment schemes are offered - full and normal participation is also offered. 

Other Questions:

1.      Where are my funds held?
When you initially deposit funds with Halifax, they are held in a segregated account with BankWest before being transferred to the counterparty. Funds for IB accounts are held with Interactive Brokers.

2.      Who has authority to access it?
Client & Advisor

3.      In the event the account holder goes into liquidation, would my shares/cash be at risk? 

The platform will try to close your positions out should your account hit $0. You will not lose any more money than you have invested with shares, as the loss is limited to the price of the shares. 

In the case of derivatives, the platform will try to close you out if your account should hit zero, however if the market gaps at open and opens lower than your account value then you may be liable for the debt. This is why you need to pay an initial margin to enter the position. This aims to prevent you owing more money, should your account run out of cash, as any gap will be taken out of that amount. However, should it go further then you will owe money.

There are other market conditions that you need to be aware of as well, like a news event where you may have high volatility. As the price can move so quickly it is not always possible to fill your positions and any stops you may place, or any automatic closing out of your account may not occur at the level you wanted. If you are trading both shares and derivatives, IB is more likely to close out your stocks and more of them to cover the margin.

4.      Is it possible to operate the trading platform from my existing account (e.g. NAB)?

The funds can’t be kept in the client’s own bank account – they will need to be transferred to our account and we will then credit the client’s trading account.

5.      Are there any management fees?

There are brokerage fees for trading and market data subscription fees only. No Management fees are charged.

6.      Is interest paid on credit balance, if so, how much?

No. These are no-interest accounts.

7.      IB margin lending  explained -http://www.halifax.com.au/tws/margins.asp &http://www.halifax.com.au/tws/mstocks.asp 

8.      Share XYZ closes today at $1.02. For whatever reason I wish to purchase XYZ if it rises to $1.04. Should I use a Limit or Stop order? The day after the transaction has been made I wish to place a stop-loss on that parcel of shares. How do I do that?

You can just use a stop order to enter the position (it will buy if it goes up to that price). People often think that a stop order is only used to close a trade, but you can also use it to enter the trade. You can also have a stop-loss attached so that when your entry order is filled, your stop-loss will then become a working order.

9.      Share XYZ closes today at $1.02. For whatever reason I wish to purchase XYZ if it rises to $1.04 the next day but not if it gaps to $1.07. Simultaneously I wish to put on a Stop Loss at 0.98 and a Profit Stop if the price rises 20% from purchase price. If the stock moves up I then wish to change to a trailing stop a certain ATR multiple below the highest price post purchase.

For this, you can use a stop-limit order to enter the trade. With a stop-limit, you have two parameters, a stop price, and a limit price. When the stop price is triggered, the order will convert to a limit order at the specified limit price. That way, it will buy if it crosses the stop, but only if it’s below the limit price. You can also use a trailing stop as an attached ‘contingent’ order (also called an ‘if-done’ order).

10.  Commission on Australian Shares:  

0.1895% of trade value, with an $18.95 minimum. Therefore a trade of any amount up to $10,000 will cost only AUD$18.95.

11.  Commission on US Shares:

0.03375 US cents per share, with a US$13.50 minimum. American listed shares charge brokerage per share, not by value. That’s why US shares tend to be more expensive. Having cheap shares in the US is an investor disincentive. Therefore, to say buy US$10,000 worth of shares at say $25 per share will cost US$13.50. Or 400 shares at $0.03375c = US$13.50 each additional 100 shares will cost an extra US$3.38c

12.  The standard rates for options are:

US      $2 per option, minimum $5

AUD   $8 per option

13.  Can I call Halifax to place trades?
If you find that you are short on time and would like to have the opportunity to take up Lance’s recommendations, Halifax offers a service where you can contact your designated Trident advisor to place the trades on your behalf. To take advantage of this offer there is an additional cost of $25 per side however you can be sure that you will never miss out on a great recommendation again. To find out more please call 02 9241 4321.

14.  Does my margin loan account (secured by Platinum Asset Management's Asia Fund) stay with Commsec.

Yes unless you close that margin loan and set up another through Halifax. We use Leveraged Equities as our ML provider. We don’t have an arrangement to deal with Commsec or Platinum.

15.  Platinum's fund is no longer in my name it is a nominee system via Commsec. The shares are in my name.

Commsec & Macquarie are the only providers that allow you to own shares in your name while trading online. With Halifax, shares traded online are held by a 3rd party custodian and not in your name.

16.  Do you take over management of the loan & the shares?

The client always manages their own share trading and margin loan, but we’ll make suggestions as to whether to trade using the loan facility, or your own cash accordingly. If you transfer your shares to us and start a new ML a/c then clearly we’ll look after this with you.

17.  How do I transfer shares?

It is a relatively simple process to transfer securities into your new IB account, as long as the original account and the new account are in the same name. Please note that due to system limitations, it’s impossible to transfer from one IB account to another IB account. If you need to transfer stocks, there is a simple form Halifax will provide for you to complete and return.  The process usually takes 5 to 10 days.  Please contact the Stock Transfer team on stocktransfers@halifaxonline.com.au and they will be able to assist.

18.  Can I transfer open positions from OptionsXpress into my new account?

Yes. This will take between 5-10 working days. Please contact the Stock Transfer team on stocktransfers@halifaxonline.com.au and they will be able to assist.

Questions on Broker platforms:

19.  What telephone support is available to manage or close open positions?

Halifax is open between 7am to 7pm so you can call us between these times.

20.  How are contingent orders managed (excluding the Ninja Trader platform) and filled? (i.e. Contingent order converted to Limit order or Contingent order converted to what ever market price that exits the position immediately)

The same as usual. For example, if you place an If Done, the parent order must be filled before the contingent is placed onto the queue.

Markets that can be traded:

21.  Can I trade any market (Options, Futures, Stocks, Currencies, ETFs) in any country from the one account?

Yes, most securities in most major countries are available.

Opening an account for a Corporate Trust – often needed for an SMSF…

In relation to your SMSF, certain additional forms of ID will be required depending on the structure of the SMSF.  If it has been established as a Corporate Trust, you will need to provide the following information:

1. Identification for all Directors;

- Drivers licence

- Medicare Card

- Tax File Number

If Halifax is unable to verify you with the above documents Halifax may require further identification.

2.  Certified Trust Deed – or an Extract of the Trust Deed including copies of the following pages:

1.      Title page

2.      The Contents pages

3.      The Schedule pages

4.      The page where the Trustee’s are executing the trust

5.      The page that lists all the beneficiaries of the trust

6.      The page that lists the settlor of the trust

 

When Opening for an Individual, Joint or Company account you will be required to provide the following Identification;

- Drivers licence

- Passport

- Utility Bills

If Halifax is unable to verify you with the above documents Halifax may require further identification.

If you are an overseas client, you will be required to provide Original Certified Identification.

Links that explain the data in the ‘Accounts’ tab on TWS / IB  

You might find that the two links below are useful in explaining what the various figures in the ‘Account’ tab of the IB platform refer to.

http://www.interactivebrokers.com/en/software/tws/usersguidebook/realtimeactivitymonitoring/view_account_balances.htm

http://www.interactivebrokers.com/en/software/tws/usersguidebook/realtimeactivitymonitoring/view_available_for_trading_values.htm

The process required to transfer stocks into an IB account

Transferring from other brokers is fine, but not from an existing IB account. IB also have different procedures for transferring from Australian or US brokers.

For stocks held with an Australian broker:

Info broker needs for transferring Australian stocks (with an Australian broker):

Delivering Broker's Name:
Delivering Broker's CHESS-PID No.:
Account Name at Delivering Broker:
Account No. at Delivering Broker:
Sponsor issued or HIN number or SRN number (if applicable):
Broker's Phone number:
Contact Name at Delivering Broker:
Assets to be transferred (Name, Symbol, Quantity):

You will also need to send written instructions to your current broker (where the stocks are held), to make the stocks available for transfer to the following:

ABN AMRO Clearing Sydney Nominees

CHESS PID: 1193

BIC code: FCSPAU21XXX.

This is the custodian used by Interactive Brokers, so this is where the stocks will be transferred to. Your broker will then communicate with ABN Amro and arrange the transfer.

For stocks with a US broker:

What you need to do is inform your broker to make the stocks available for transfer to Interactive Brokers (DTC number 0534).

After that, you let Halifax Operations team know that it’s been done, and Halifax can apply to receive the stock through our system.

Further Information on Stocks

You may wish further information on stocks for your research. As explained earlier you can get these free from other sources, but if you want market data – here are the options -

Market data subscriptions for the IB platform…

The market data subscription prices for the IB platform are below. Clients are set up as professional by default, however clients with individual accounts are able to switch over straight away, and clients who have trust accounts can request to be changed over by sending us a letter.

The subscriptions for non-professional subscribers are:

The subscription that you will need to get most of the US futures, as well as US options and stock prices is the US securities and commodities bundle, non-professional. This one says ‘subject to waiver’ which means it is $10 USD/month, unless you do more than $30 in commissions, in which case they waive the fee.

If you need softs on the NYBOT exchange (cotton, cocoa, etc), you need to subscribe to ‘Intercontinental and New York Board of Trade’ which is $1 USD per month.

If you need gold and silver futures, you need ‘NYSE Liffe’ which is $1 USD per month.

If you need Australian stocks/options or futures, you’ll find these in the section at the bottom. For stocks and options, you need the ASX, and for futures, the SFE.

For professional subscribers:         

Most of the US futures are under the bundle “Professional US commodities exchanges” which is $10 USD per month.

However, for options prices, there is an additional subscription “US Options Exchanges” which is $23 USD per month.

Also, for US stocks, you will need to subscribe to each exchange:

NYSE is USD $127.25 per month (this also requires a special form and the client is invoiced directly by the NYSE)

Nasdaq is $20 USD per month

The rest of the subscriptions are the same:

If you need softs on the NYBOT exchange (cotton, cocoa, etc), you need to subscribe to ‘Intercontinental and New York Board of Trade’ which is $1 USD per month.

If you need gold and silver futures, you need ‘NYSE Liffe’ which is $1 USD per month.

If you need Australian stocks/options or futures, you’ll find these in the section at the bottom. For stocks and options, you need the ASX, and for futures, the SFE.