Tiger Brokers (NZ) Review

Tiger Brokers' origins are more complicated than the likes of Stake, Sharesies and Hatch. In the interests of full transparency, and to give you comfort about where any investment money is going, we outline the recent history of the company below:

• Tiger Brokers (NZ) Limited, was incorporated in New Zealand in October 2015 with company number 5838590 and is registered as a Financial Services Provider with FSP no. FSP473106.
• On 1 July 2020, Tiger Brokers (NZ)'s application to be a NZX-player was discontinued and the platform was re-focused for Asia and US-based investing.
• In Australia, Tiger Brokers (AU) Pty Limited with ABN 49 621 909 902 and authorised by the Australian Securities Exchange Commission (ASIC) with licensed number AFSL #505213. Tiger Brokers (AU) was open to Australian retail clients end of Q1, 2021.
• To begin operating in New Zealand and Australia, Tiger Brokers (NZ) purchased existing registered or licensed companies. The company sent a founding partner down under to establish Top Capital Partners Limited in New Zealand and its subsidiary Top Capital Partners (Australia) Pty Limited in Australia. These entities were later absorbed by UP Fintech Holdings. Both companies' names were changed in 2019. The group also owns Fleming Funds Management Pty Ltd. 
• Tiger Brokers corporate history and structure is also complex. Contrary to what many believe, a company listed on a US exchange doesn’t need to be incorporated in the United States. Tiger Brokers (NZ)'s parent company, UP Fintech Holding Limited, is registered in the Cayman Islands. Before listing on the Nasdaq exchange, Tiger Brokers underwent a drastic restructuring.
• As you can see from the chart below, the structure is very complex due to vast regulatory controls found with the ownership of businesses in China. This structure is arguably consistent with other US listed businesses operating within China e.g. Apple, Tesla, Microsoft, etc.

 ​You can find the complete list of subsidiaries and affiliated entities in the company’s annual Form 20-F filing to the US Securities Exchange Commission. Besides its presence in New Zealand and Australia, the Tiger Brokers platform is available in several countries through the subsidiaries shown above.

Tiger Brokers authorised or registered subsidiaries engaged in financial services:

• US Tiger Securities, Inc. is registered with FINRA and the SEC as a broker-dealer.
• Wealthn LLC trading as UP Fintech Asset Management is regulated by the US SEC as an investment advisor.
• Marsco Investment Corporation is registered with FINRA and the SEC as a broker-dealer. The company was first registered in 1986, long before the inception of Tiger Brokers (NZ).
• Tiger Brokers (Singapore) Pte. Ltd. is licensed by the Monetary Authority of Singapore to deal in various capital markets products and has exemptions allowing the company to offer investment advisory services.

Tiger Brokers (NZ)​ offers an aesthetically-pleasing user experience; the interface is modern, intuitive and straightforward. In terms of functions and information, the platform has a lot to offer:

• Each product listed has associated fundamental data and related news, a range of technical analysis indicators and portfolio analysis tools.
• Tiger Brokers (NZ) emphasises the platform’s performance, explicitly quoting hypothetical statistics like processing 1.68 million transactions per second and supporting 1.47 million products. The platform is updated frequently with new features and improvements.
• The company states 48% of employees are allocated to research and development, meaning more than 300 people contribute to platform development.

Tiger Brokers (NZ) offers various trading instruments from several markets. Here is an overview of the products available to New Zealand traders.

They have a full offering of order types from Market Order, Limit Order, Stop Loss Order, Stop limit Order, & Conditional Order. They can be valid for the Day (unfilled orders will be automatically cancelled at close of trading) or GTC Good Till Cancelled – the order will be valid until it is filled or cancelled.

1. Stocks and ETFs
Stocks and exchange-traded funds are one of the core products provided by Tiger Brokers (NZ) and an area where the company is highly competitive in the international market; we’ve prepared a simple comparison in the next section to illustrate the competitiveness. Tiger Brokers (NZ) lists stocks and ETFs from the following exchanges:

• New York Stock Exchange (NYSE)
• Nasdaq Stock Market (NASDAQ)
• American Stock Exchange (AMEX)
• Pink Sheet Exchange (PK)
• Singapore Exchange (SGX)
• Australian Securities Exchange (ASX)
• Hong Kong Exchange (HKEX)
• Shanghai Stock Exchange (via HKEX)
• Shenzhen Stock Exchange (via HKEX)

Unlike most other investing platforms operating in New Zealand, Tiger Brokers (NZ) provides access to US and Asian stock markets, including Chinese A-Shares. The downside is they don’t offer any New Zealand shares or ETFs currently - for such investing, ASB Securities, InvestNow or Sharesies are popular options. 

2. Futures
You can find future from the following exchanges listed in the Tiger Brokers (NZ) platform:

• Chicago Mercantile Exchange Group Inc. (CME)
• Chicago Board Options Exchange (CBOE)
• Singapore Exchange Limited (SGX)
• Hong Kong Exchanges and Clearing Limited (HKEX)

The assets available to trade are:

• Index futures (E-mini Dow Jones, China A50 Index, Hang Seng Index and 13 more)
• Treasury futures (30-YR T-BOND and 3 more)
• Metal futures (Gold, Silver, Iron Ore and 6 more)
• Energy futures (Light Crude Oil, Natural Gas and 5 more)
• Forex futures (Australian dollar, New Zealand dollar, SGX USD/CNH and 10 more)
• Agriculture futures (Live Cattle, Rice and 11 more)
• Equity futures (Tencent and two companies from HKEX)
• Bitcoin futures (CME Bitcoin)

3. Other listed derivatives
Besides futures contracts, Tiger Brokers (NZ) offers US and HK stock options and warrants and CBBCs (callable bull/bear contracts) listed on HKEX. These are highly complex structure products that are only suitable for experienced investors who thoroughly understand the characteristics of these contracts.

An option is a contract giving the buyer the right, but not the obligation to buy or sell an underlying asset in the future, defined by an expiry date. The option buyer pays a premium to the seller for the right to decide. If the option expires in-the-money, the seller is obligated to either deliver the underlying asset or settle the difference in cash. If the option contract expires out-of-the-money, the buyer will not want to buy the underlying asset above market value or sell below market value, so they do not exercise their right to buy or sell. Therefore, the option seller keeps the premium as their profit.

The warrants offered by Tiger Brokers (NZ) are listed on the Hong Kong Exchange, and they are described as derivative warrants by HKEX, sometimes known as a covered warrant or a naked warrant. Warrants are similar to options. The main differences are that the expiry date is longer, typically at least six months but may be set to expire in up to five years.

The CBBCs (callable bull/bear contracts) listed on Tiger Brokers (NZ) also originate from the HKEX and share many similarities to warrants. There isn’t very clear information about CBBCs on the Tiger Brokers (NZ) website, but you can find more information about CBBCs on the Hong Kong Exchange website.

When it comes to trading shares, Tiger Brokers (NZ) is very competitive, and the fees are transparent. The broker describes fees clearly and highlights the fees they charge and the fees charged by the underlying exchange and other involved parties.

Tiger Brokers (NZ) is currently running a promotion and advertising zero commissions on US stocks, but this excludes regulatory fees (the same of which are charged by Stake, which is also zero fees but charges a 1% FX fee). The 'zero commissions' means Tiger Brokers (NZ) don't impose any charges that would result in profit to the company. 

Trading US shares involves the following third-party fees:

• External agency fee and Trading activity fee = US$0.00396/share, at least US$0.99 for a single transaction
• SEC membership fee (only charged when selling shares) = 0.00051%
• ADR (American Depositary Receipt) fee = between US$0.01 and 0.03/share

Our View: Tiger Brokers (NZ) offers pricing similar (or below) that of other global online brokers, which is a first for a New Zealand-based investing platform. This makes the platform a lot cheaper than Hatch, Sharesies and Stake.

Example:
If you buy 10 Apple (AAPL) shares for US$130 per share (total trade cost US$1,300), and your account is denominated in New Zealand dollars; this table shows what it would cost with various brokers catering to New Zealanders:​

Signing up online:

1. You can open a Tiger Brokers (NZ) trading account either from the company’s website or from the mobile trading app.
2. During the registration process, you’ll be asked a series of questions about your identity, where you live, your employment status, investment experience, and your financial circumstances.
3. Once you’ve provided all this information, you’ll be asked to agree to the privacy policy.
4. Then you’ll be required to upload your personal ID, proof of address, and provide your signature. To ensure a seamless process, we suggest having the required documents on hand before starting this process.

Tiger Brokers (NZ) account types
When signing up for a trading account, you’ll be asked to select the account type you want. As you’re registering, there is a handy explanation for each option, but here is a quick summary for you.

• Cash account: This account only allows trading stocks with cash. Margin trading and short selling are unavailable. With a cash account, you need to exchange currency to trade on specific markets. For example, if you deposit NZD, you’ll need to convert it into US dollars to trade US stocks.
• Margin account: This account supports margin trading, the provision of leverage and short selling, offering intraday leverage up to 1:4 and overnight leverage up to 1:2. However, the leverage rate can vary depending on different individual stocks. When trading with the margin account, you don’t necessarily need to use leverage. The account allows you to open positions in various markets without needing to perform a physical conversion. For example, you could use your NZD balance as collateral to open a position in a product quoted in USD. 

Funding your Tiger Brokers (NZ) account 
Once your trading account is created, the next step is to deposit funds. The only method for funding your Tiger Brokers (NZ) account is via bank transfer. You can deposit via local transfer to the broker’s Bank of New Zealand account. Alternatively, you can deposit funds using other currencies.

We asked Tiger Brokers to comment on their safety and security of client assets. These are their responses:

Strict segregation of client assets

• Client assets are held and kept in dedicated custody accounts, separated from our own capital. Detailed calculation and reconciliation of client money and securities are performed on each trading day, as required by the law.

Client money is strictly monitored

• Client assets are subject to periodic external and internal audits, from auditors and from the relevant regulators.
  
• Tiger Brokers (NZ) must strictly comply with all regulatory requirements to maintain appropriate capital adequacy ratios with a strong anti-risk capability, so as to protect client interests.
  

Custody under strict review

• Tiger Brokers (NZ) performs due diligence on our custodians and ensures that adequate controls are in place to monitor client funds on an on-going basis.
  
• These custodians are under strict review from SEC and FINRA in US, and SFC in Hong Hong, NZX & FMA in New Zealand, and others.

At the moment, no. Tiger Brokers (NZ) has not progressed with its NZX markets accreditation and appears focused on offering other markets to New Zealand-based investors.

Tiger Account is a multi-currency account that supports multiple currencies, making it easy for clients to trade the global markets. Please noted that Tiger Trade app does not do the currency exchange automatically. After depositing funds, a client needs to manually exchange the cash into different currencies and invest in corresponding markets, with no exchange service fee charged.

Tiger Brokers (NZ) advised us that clients pay the spot rate which can be found in the Tiger Trade app under the currency you want to exchange. The base currency in Tiger is USD, so the currency displayed is USD. To view the actual amount, Tiger Brokers (NZ) suggests this can be accessed via APP > Trade > Account > Cash.

As an example, if you deposit NZD and intend to trade US stocks with Tiger, there are two options:

1. Currency Exchange: App > Trade > Account > Cash > Exchange
   
2. Trading by financing
   

Yes, you can place orders for premarket and aftermarket, so you don’t need to stay up all night to trade. Throughout the year, US share market opening hours in New Zealand is from Tuesday to Saturday.

Because of Tiger Brokers (NZ)’s complex corporate structure, we recommend reading the privacy policy carefully. The privacy policy is informative and upfront about who your data is shared with and under which circumstances. The Product Application License Agreement is governed by the laws of Hong Kong, which you may not be familiar with. However the relevant product disclosures and privacy agreements are grounded in the local jurisdictions.