US FRACTIONAL SHARE TRADING DISCLOSURE
10 January 2023
Tiger Brokers(AU) Pty Limited, “TBAU”, allows its clients to trade certain US stocks in fraction rather than whole share quantities. Please ensure you have read, understand, and agree to be bound by the terms herein, which outlines the unique features, limitations, and risks associated with trading in and holding fractional shares.
Mechanism – TBAU acts as your agent in executing and dealing in the fractional shares on your behalf. The orders will be submitted to TBAU’s US clearing broker for execution. The clearing broker will execute a fractional share trade which includes both a whole share and fractional share component on a mixed capacity basis, where the whole share component of the order is executed on an agency basis and the fractional share component of the order is executed on a principal basis.
Transfer of Fractional Shares – Fractional shares component are not transferable to another broker. If a client wants to transfer the holdings to another broker, the fractional portion of shareholdings will need to be liquidated, which may have tax consequences and will result in brokerage and fee charges.
Available products – Fractional trading is currently available on certain US stocks and ETFs, which includes but not limited to S&P 500 component stocks. TBAU may update the product lists from time to time at its discretion without prior notice.
Available Order Types – market orders and limit orders
Minimum order amount – Minimum 1USD is required to open a fractional share position. There is no minimum to close a position.
Extended trading hours – not supported.
Trading cost:
- For fractional share trading with order volume less than 1 share, platform fees are charged at 1% x Trade Value, capped at USD 1. There is no commission or pass-through fee to apply.
- For fractional share trading with order volume more than 1 share: normal US trading fees apply.
Please see the Financial Service Guide or pricing page on our website for details.
Decimal Place Recording - TBAU records the quantity of fractional Shares traded or otherwise held in a trading account down to five(5) decimal places.
Voting Rights - Clients will not have voting rights for any of the fractional portion of shares held in the account and TBAU cannot provide clients any shareholder documentation for any holdings of less than one share.
Dividend - Clients will receive payments of cash dividends. In the case of stock dividends, you may receive equivalent amount of cash in lieu of fractional portion of additional shares resulted from the stock dividends.
Corporate actions – Clients, will not be able to participate in voluntary corporate actions (including, without limitation, any tender offers or rights offerings) with respect to such fractional portion of the shares. However, clients may participate in mandatory corporate actions. Generally, TBAU will distribute interests in proportion to ownership interest, inclusive of fractional portions. But given there are different types of corporate actions and its nature can be unpredictable, different treatments of fractional portion of the shares may apply, which is at TBAU’s sole discretion, considering terms and conditions of the corporate action as well as TBAU’s and its US clearing brokers’ policies and procedures.
TBAU may update the terms and conditions as well as specifications of fractional trading from time to time with or without prior notice. Please refer to the relevant sections on our website or contact us for more details.