HOT TOPICS:   Migration  |  Mortgages   | Inflation                                                   RESOURCES:    Economic calendar   |   Term deposit calculator

The comment stream

Reader poll

How to buy and sell bonds

Posted in Bonds

There is really only one way to trade bonds and that is through a stock broker.

You will need to go through the broker’s client registration process and open a securities trading account.

If you are buying bonds, some brokers will require that sufficient funds are in your trading account.  Other brokers do not have this requirement but will not register the securities in your name until they have received payment.

Bonds are registered securities.  That means that ownership of the bond is evidenced by the registrar entering the details of your holding in the relevant bond register. Two registrar firms dominate the NZ bond market:  Computershare Investor Services and Link Market Services. They are appointed by the bond issuer and are responsible for communicating with bond holders and processing interest, dividend and redemption payments.

If you are a first time buyer, your broker will organise a Common Shareholder Number (“CSN”) which the registrars will use to record your all your bond holdings.  You will need a CSN to trade bonds listed on the NZX,

To buy and sell NZX listed bonds you will also need to provide the broker with Faster Identification Number (“FIN”) which is acts like a PIN number and identifies you as the registered holder.

If you are selling unlisted bonds, you will need to provide the broker with a security transfer form signed by the registered holders on the bonds.  The broker can provide you with blank forms.  If you are buying unlisted bonds, the broker will send the security transfer form to the registrar.

The following are some brokers that deal in bonds - clicking on the name will take you through to an appropriate page.

ASB Securities Hamilton Hindin Greene
Craigs Investment Partners Macquarie New Zealand
Direct Broking Somerset Smith Partners
First NZ Capital JB Were
Forsyth Barr