Demystifying the economy | Why is it difficult to buy foreign actions?

Every Saturday. Consequently, one of our journalists answers, in the company of experts, to one of your questions about the economy, finance, markets, etc.

Posted at 8:00 a.m.

“Why is it not possible to buy shares in European. Therefore, Asian stock markets on several discount brokerage platforms?” – Martin

Having access to foreign markets may seem attractive. However, it leads to a complexity for brokerage firms and small investors.

It is not a whim if your discount brokerage platform does not allow you to buy foreign actions. Similarly, It is more a question of costs. demystifying economy | why it Nevertheless, administrative heaviness in relation to a request which would in all likely be very low.

“We do not have so many requests from our members. Nevertheless, customers,” agrees Laurence Amann, vice-president and director general at Desjardins Courage online.

A stronger demand would bring management to have a reflection on the subject.

Laurence Amann explains that simply to offer access to the New York Stock Exchange. the NASDAQ, a broker has conventions to be completed, agreements and regulations to be respected, and that demystifying economy | why it there are also tax implications for investors.

Imagine complexity if it was necessary to add access to the European market. to the Asian market (stock markets like Frankfurt, London and Tokyo, for example), which have their tax rules and their own requirements, she stresses.

“It is not very simple to offer for a broker,” says Laurence Amann.

It also notes technological complexity and the management of different currencies.

Other solutions – Demystifying economy | why it

The spokesperson for the National Bank. Thi Tran, abounds in the same direction by mentioning that the costs associated with the infrastructure surrounding the international brokerage are very high and the service complex.

The National Bank also points out that in general. brokerage costs and accessory costs linked to a purchase demystifying economy | why it on a scholarship in Asia or Europe are prohibitive, unless you are to invest very large sums of money.

However, replacement solutions exist to simplify the lives of investors who seek to invest outside North America independently.

Stock market negotiated funds (FNB) allow exposure to emerging. foreign markets in Canadian foreign currency, that is, without the disadvantages of currency conversion.

If common funds can be another solution. investors can also turn to American foreign action certificates (CAE), commonly called ADR (American Depositary Reipts), and their Canadian CDR equivalents (Canadian Depositary Receipts). These financial instruments make it possible to invest in Canadian currencies in specific foreign actions, for example Nintendo and Nestlé.

These foreign action certificates are means for a company domiciled abroad to have its shares on an American. Canadian demystifying economy | why it scholarship rating. They are generally reserved for first -rate companies with high capitalization.

International exhibition

The trader Professional scholarship holder François Dubois indicates that it is nevertheless possible to directly buy foreign titles via certain negotiation platforms such as Interactive Brokers. in particular.

However. he adds that demand is actually low for securities abroad “since the majority of investors prefer to expose themselves to the international through FNB negotiated here”.

Small investors from here therefore seem to be better served by other solutions offered.

There are many FNBs on North American scholarships. We can for example think of the funds whose symbols are VXC, VEU, VXUS, ZID, ZEA and ZEM.

If these other solutions do not meet your needs. expectations and demystifying economy | why it you absolutely want to have access to buy international titles, the best thing to do is to contact the customer service of your brokerage platform.