Why can't I buy certain stocks with my ISA?

[Mr Noble]

Wanted to buy some Tata Motors (TTM) and just logged into my Hargreaves Lansdown ISA to look at the price, and find I can't buy that stock from my SIPP or ISA, only from my Fund and Share account. (which I don't really use)

Called them up and the nice boy couldn't tell me why it's unavailable. He just said it's probably because of a tax reason between the US and UK.

Does anyone know why it is? Seems a bit odd when I can invest in a thousand other US listed companies like Apple or Microsoft, but not in one of the biggest auto companies on the planet!!


http://www.hl.co.uk/shares/shares-search-results/t...

[vescaegg]

Very odd. Ive had no problem trading TSLA on HL in the past.

Something may have changed recently?

Do you have to complete a H-8BEN form for each account perhaps?

Edited by vescaegg on Monday 17th November 16:04

[gregf40]

W8-BEN shouldn't stop you being able to invest - just means you will pay more tax.

Maybe try again tomorrow or ask to speak to someone else?

You should be able to hold them in the ISA.

[vescaegg]

It may be a HL thing as they didn't let me trade anything US based without the form being in place.

[K12beano]

Something in the back of my mind is saying it's to do with settlement via CREST. I recall not being able to trade Stratsys, but able to with 3D and XONE

[Mr Noble]

It is most odd.

Just looked at Tesla and that one's fine to trade in using ISA or SIPP, so what's different about Tata?

http://www.hl.co.uk/shares/shares-search-results/t...



I hope HL aren't being racists.

[twinturboz]

Maybe because it's an ADR, does it allow you to buy say Bidu stock in there?


Edit:

Yup I'm guessing it's the ADR rules.

"The fact that an ADR or GDR is listed on a recognised stock exchange does not mean that it can be held in an ISA. What matters is whether the underlying shares trade on a recognised stock exchange."

So Tata trades as an ADR on the nyse but the actual underlying shares trade on the Indian stock exchange which I'm betting HMRC don't have on their recognised exchange list.

Edited by twinturboz on Tuesday 18th November 17:26

[Simpo Two]

twinturboz said:

So Tata trades as an ADR on the nyse but the actual underlying shares trade on the Indian stock exchange which I'm betting HMRC don't have on their recognised exchange list.

'HMRC in racism shocker'. Well it must be, there's no other answer. All go to jail.

[twinturboz]

Hah! Well they only seem to have 10 countries on the list so at least they are consistent in their racism.

Seriously though surprised the Indian stock exchange isn't on the list considering its an emerging economy, guess it's all to do with regulation, having said that didn't they recently allow Aim stock into isa's. I'd take my chances with the Indian stock exchange over Aim

[Simpo Two]

You'll need to curry favour...

[gregf40]

gregf40 said:

W8-BEN shouldn't stop you being able to invest - just means you will pay more tax.

Maybe try again tomorrow or ask to speak to someone else?

You should be able to hold them in the ISA.

Sorry I misread Tata for Tesla - I know you can hold Tesla as I have some.

Not sure about Tata!

[Mr Noble]

Update


I had a more in depth reply from HL and those folks above are correct. Although the Tata shares trade on the NYSE, the underlying shares are listed on the Indian exchange, which HL don't recognise.

Shame.

I'm sure things will change sooner or later.

[gregf40]

Ah yes - you can see it is an ADR.

BP do something similar so US residents can easily buy their shares.

[Cheib]

My ISA provider Transact does let you buy Tata Motor shares in your ISA. That's why I use them because they're incredibly flexible about what you can buy.

Edited by Cheib on Sunday 23 November 21:38

[SlowMoped]

Have to be listed on an RIE. If a stock is, then it should be eligible.

[trashbat]

I have Tata in my demo account with The Share Centre, although I've never tried to buy it for real. I do have Fiat (Milan) in my real one with the same.

One word of caution that I've never investigated, since Milanese trading times are the same as ours: what hours can you execute trades in? If you're buying Indian shares and it only goes through in British business hours, that gives you a fairly narrow window. Before you suggest it's automated, buying Fiat isn't automated from a end user PoV; I submit my request blindly and it gets executed by the dealing team.

[SlowMoped]

trashbat said:

I have Tata in my demo account with The Share Centre, although I've never tried to buy it for real. I do have Fiat (Milan) in my real one with the same.

One word of caution that I've never investigated, since Milanese trading times are the same as ours: what hours can you execute trades in? If you're buying Indian shares and it only goes through in British business hours, that gives you a fairly narrow window. Before you suggest it's automated, buying Fiat isn't automated from a end user PoV; I submit my request blindly and it gets executed by the dealing team.

It depends if the broker has an RSP link with a counterparty who will make a spread in that particular stock through the full trading session of the overseas market.

Buying overseas shares is not just a case of the broker phoning up the counterparty and saying they will buy them, that is the simple part. The difficulty is settlement of the trade and getting the stock into custody. As others have said, the best way to get exposure to firms that are not on RIEs is through buying an ADR/GDR which can settle in the right place... without going into too much detail.