Clarifications and Explanations for Foreign Securities Trading
What type of Foreign Securities can be traded via Leumi Trade?
Leumi Trade enables trading in American Stocks and ETFs on the following US Markets: NASDAQ, AMEX, NYSE, including in Israeli Stocks traded on Wall Street, according to the Trading regulations in each of the above markets.
In addition, European Stock Trading is also available in the following countries: Germany, England, France, Belgium, Holland, Switzerland.
- Trading Hours in American Securities, via Leumi Trade, are 6:00 AM till 23:15.
- Trading hours in US Markets in local Israeli time are 16:30-23:00 (In accordance with Daylight Saving Time), Monday through Friday, when Markets are open.
- Trading Hours in European Securities via Leumi Trade are 10:00 AM till 18:30 local Israeli Time, when European markets are open.
- Trading Hours in Canadian Securities via Leumi Trade are 16:30 till 23:00 local Israeli Time, on trading days only.
Real Time Quotes and additional information
Leumi Trade enables viewing Real Time Quotes of US Stocks and US ETFs, with no additional charge (The service requires enlisting with the above Markets. For your comfort, you can enlist via Leumi Trade). In addition, Leumi Trade includes comprehensive information in Hebrew about American and European Stocks.
When trading in foreign securities via Leumi Trade you are charged with a reduced Buy/Sell Commission: Every transaction of either Buying or Selling foreign Stocks or ETFs will be charged a commission of 0.3% of the transaction*, with a minimum fee of 25 US$ (If the transaction is lower than 75US$, the minimum fee will be one third of the total transaction sum).
*Up to a maximum of 15,000$ per transaction. Customers that have other benefits will receive the higher reduction.
No Charge for Changing/Cancelling orders, and for Unexecuted Orders
Changing or Cancelling orders via Leumi Trade, and orders that had not been executed, are fully exempt from commissions (For comparison, the commission for changing or cancelling orders in a bank branch is 27 Shekels).
Do I need to open a foreign currency account?
In order to trade in foreign securities, it is necessary to open a foreign currency account, since all activity relating to holding foreign securities (corporate actions, benefits etc.) is carried out in foreign currency. You must request that your branch connect your foreign currency account to your securities portfolio.
Validity of Foreign Security Orders placed on Leumi Trade
- One day
- Orders with a future date: If order was placed till the 15th of the month - till the end of the current month. If order was placed after the 15th - till the end of the following month. In any case no more than 45 days maximum.
After transaction is completed - when is the Monetary Value calculated?
When trading in stocks or in ETFs that are traded in the USA markets, debit/credit time in your account (including commission charges) will occur 3 business days following transaction time.
When trading in stocks or in ETFs that are traded in the European markets, debit/credit time in your account (including commission charges) will occur 2 business days following transaction time.
You can view transactions that have not yet been financially calculated in "Transaction History" (Transaction that have not yet been credited/debited).
Changing and Cancelling Orders that have not yet been executed
- Changing\Canceling American Stock Orders that have not yet been executed, can be done starting from one hour before the USA Opening Trading times and until Closing times.
- Changing\Canceling European Stock Orders that have not yet been executed, can be done only during European trading hours, 10:00-18:30 Israel Time, on European trading days.
- Note, changing and cancelling orders always depends on and is subject to receiving final approval from the Broker.
- Following order status can be done in "Orders and Transactions" screen
Foreign Securities Custodians that Leumi works with
- What is a Custodian?
A financial services company responsible for safekeeping Leumis Clients Financial Assets
Who are the main Custodians Bank Leumi works with in regard to foreign Securities?
Euroclear Bank S.A/N.V
Euroclear is a Belgium based financial services company that specializes in the settlement of securities transactions as well as the safekeeping and asset servicing of these securities. In addition it is one of the leading Securities Clearing Companies in the European Market.
- JP Morgan Chase & Co
Provides Financial Safekeeping services Internationally
Bank Leumi uses JP Morgans NY safekeeping services for US traded stocks, for US Government Bonds, and JP Morgan London for Stocks traded in the rest of the markets.
In addition to the two main Custodians listed above, there are additional Custodians that provide Bank Leumi with Safekeeping services for specific securities, Including:
Commerzbank Aktiengesellschaft, UBS AG, HSBC Bank USA, Oppenheimer & Co. Inc
- How may I know which Custodian provides safekeeping services for securities?
The custodians name appears in the transaction confirmation sent by mail.
The Banks policy regarding the choice, communication and supervision of Custodians that provide safekeeping services for securities and other international assets.
The Global Custodians Bank Leumi chose for safekeeping customers International Bonds, Stocks, Fund type Assets and Restricted Share Certificates ("Securities"), are leading international financial companies, that are experts in their field, and are financially stable.
The bank is strict about complete separation between securities that are held with Global Custodians for bank customers, and between securities that are in the Banks ownership.
The Bank keeps two separate accounts with Global custodians: One securities account for the bank (Nostro), and another securities account for the banks Customers
The Global Custodians the Bank works with, separate their own securities from securities held for the Bank. In addition, the Global Custodians separate between securities held for the Bank, and securities held for the rest of their clients.
Before working with Global Custodians, and periodically, the Bank requests the Global Custodians to answer a questioneer on various subjects (Regarding Operative aspects, Technical aspects, Disaster Recovery, Financial Stability, Organizational Structure, Work Procedures, Contingency and business continuation procedures etc.)
In addition, the Bank continuously follows Information regarding Global Custodians, for instance: CDC Margin Changes, periodicle Financial Reports, examination of ratings and rating agency reports. In addition the Bank periodically checks the financial companies it works with, including:
a. The Bank holds meetings with the leading Global Custodians representatives, and periodically visits them.
b. Inspections of par value/positions by the bank:
Daily Inspection - Includes individual inspection of each transaction by the responsible units for transaction clearing
Monthly Inspection - Includes comparing between clients securities par value balance/positions, as appear in the Bank records, and between those appearing with the Global Custodians, for Banks customers.
Daily Monetary Inspection - Includes comparisons between Debit/Credit as they appear the Banks records, and between those that are reported by the Global Custodian.
Global Custodians that have Audit reports done (Reports prepared for them by an external entity, which deals with the supervision procedures, supervision objectives, management of business operations and securities safekeeping) tend to provide the bank with a copy of their yearly reports.
Please note that the Global Custodians are subject to foreign laws of the states they are from, and/or the states and/or the markets and/or the exchanges in which they hold the securities, and are supervised by the authorities and local regulations.
Broker Commission and International Tax in US Markets
- For Stocks traded in the leading markets, NASDAQ, NYSE - around 0.5 cents per Stock (according to broker ) (Sum will be rounded up in case of more that 2 digits after decimal).
- For Stocks traded on PinkSheet Market or US Bulletin Board - 5$ per trade will be charged, regardless of number of stocks, excluding certain stocks that are not included in this agreement, that will be charged 0.5 cents per stock (For example: FREDDIE MAC) (FMCC)).
- For Sell orders only, an additional USA Markets (SEC) commission is charged: 0.0000218$ multiplied by the transaction value.
- An exchange fee will be charged if your chosen conversion debit/credit method is to Shekels.
Stocks that are traded in the US Markets, and are issued in European countries:
France - FTT (French Transaction Tax) of 0.2% of the gross transaction value will be charged when buying US stocks that have been issued in France and their Market value is over 1 billion Euro.
Italy - (Italian Financial Tax) of 0.1% of the gross transaction value will be charged when buying US stocks that have been issued in Italy.
Broker Commissions in the European Markets
- The commission for Stocks traded in the European markets is 0.05% of transaction value, or a minimum commission of 10 Euro.
- In Britain - An additional Stamp Tax of 0.5% of the transaction value + 1 Pound Tax will be charged.
- In Switzerland - An additional Exchange Stamp Tax will be charged: SW - 0.085% (For each side), VX - 0.075% (For each side).
- In France - An additional FTT (French Transaction Tax) will be charged when buying stocks that have been issued in France and their Market value is over 1 billion Euro: 0.20% of the gross transaction value.
- An exchange fee will be charged if your chosen conversion debit/credit method is to Shekels
Broker Commissions in Canadian Markets
- Broker commission for stocks traded Canada - Is 1 Cent per Stock, for buying or selling, or a minimum commission of 20 Canadian Dollars.
- An exchange fee will be charged if your chosen conversion debit/credit method is to Shekels
Custodian Fees (Securities Safekeeping)
- Custodian fees will be calculated according to the amount of bank transactions during the same day, for the same security, and the actual charge.
- Up to $4.5 expenses for buying same security during the same day, with the same broker
- Up to $4.5 expenses for selling same security during the same day, with the same broker
Expenses for GDR/ADR Securities
- Expenses for GDR/ADR securities are in accordance with paying agent
- When purchasing securities that are not traded in their original market (for instance dual stocks) an additional ADR-type fee might be charged, usually during dividend payments and occasionally as a yearly charge, according to the depository bank's charges and decisions.
The services are available for Leumi Clients, subscribed for Internet Services, that have authorization to place orders.