Microsoft, JP Morgan, Disney and Facebook will join Apple in becoming Transferable Custody Receipts listed on Chi-X Australia, with more issuances to follow.
Chi-X Australia and Deutsche Bank have announced four new US stocks that will be available to Australian investors as TraCRs (Transferable Custody Receipts).
TraCRs (pronounced “tracers”) are classified as a domestic equity market product – settled through CHESS and subject to Australian regulations – and represent a new mechanism for Australia investors to gain exposure to overseas listed companies. Trading occurs exclusively on Chi-X during Australian trading hours with all distributions and dividends paid in Australian Dollars (at a wholesale FX rate). TraCRs are additionally convertible to shares, subject to certain terms.
US-listed Apple Inc became the first issuance earlier this month, whereby each TraCR security represents one unit in Apple stock held by Deutsche as a global custodian.
Deutsche Bank will reportedly now be issuing TraCRs in Microsoft, JP Morgan, Disney and Facebook, with another five – Exxon Mobile, IBM, Intel, Bank of America and General Electric – to follow by the end of the month. More will be issued in the coming months and through 2019, the report said.
“TraCRs for the first time, provide Australian investors with access to leading global companies with the protection of trading on a local market,” said Chi-X CEO Vic Jokovic.
TraCRs just offer a simpler and more cost-effective way to directly access US equities from Australia, providing all the benefits of owning the shares outright without the hassle of overnight trading.
“TraCRs will trade locally on the Chi-X exchange, which removes the foreign brokerage fees, and may help to lower the FX and US custody fees, which are currently charged to Australian investors when they invest directly in US equities,” Jokovic said in a separate report.