Behind the scenes: Sharesies’ process for US investmentsBehind the scenes: Sharesies’ process for US investments

Wonder no more! We’re pulling back the curtain on what happens when you place a buy or sell order for US companies and exchange-traded funds (ETFs) with Sharesies.

If you’re curious about what happens when you invest in NZ or Australian shares through Sharesies, check out our behind-the-scenes post for NZ investments, and for Australian investments.

Step 1: You place your order 💖

You’ve exchanged your NZ dollars for US dollars, and placed your order. Nice! Your order to buy an investment—or sell one you’ve already got—gets sent to us at Sharesies.

Step 2: Your order goes to DriveWealth 🇺🇸

To get your order to the US share market, we’ve partnered with DriveWealth. They’re a US-based registered broker dealer who acts as our execution partner. This means they can buy and sell investments with the three US stock exchanges we provide access to—the New York Stock Exchange (NYSE), Nasdaq, and the Chicago Board Options Exchange (CBOE)—on our behalf. 

When we receive your order, we queue it up and send it securely to DriveWealth to place on the market. They have the technology that allows them to connect and trade with the US exchanges. If you think about the flow between Sharesies and the US market, DriveWealth is in the middle receiving orders and executing trades. They see all of the orders from us as if they were placed by a single customer—Sharesies. We act like a buffer between you and DriveWealth, so your personal info is never shared with them.

The US Securities and Exchange Commission (SEC) regulates DriveWealth. DriveWealth is also a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). 

Step 3: Your order goes on market ✨

DriveWealth places your order on the US market when the market is open. If you’ve placed a market order, the market will decide the price. But if you’ve placed a limit order, you’ll have set a limit for the amount you buy or sell an investment for. But remember: you can only buy and sell whole shares (and not fractional shares) when placing a limit order for US investments.

US stock exchanges are open weekdays 9:30 AM to 4 PM Eastern Time and are closed on major US holidays. You can find an exchange’s opening hours in Sharesies by selecting the ‘open’ or ‘closed’ symbol in the top right-hand corner on an investment’s page. If you place your order while the US market is open, it’ll typically go straight to market. But if you place it while the US market is closed, it’ll be queued up for when the market opens again and show as ‘pending’ in your Portfolio. You can cancel a pending order, otherwise it’ll usually be placed on market within seconds of it opening. 

When your order goes to market, it might be filled in a single trade straight away, or over multiple smaller ‘partial’ trades. This means that your order might be filled by partial trades at different prices. If your order (or partially filled order) is waiting to be filled, it’s called a ‘processing order’—which you can usually choose to cancel. If any part of your processing order isn’t filled after 30 days, we’ll typically cancel it and refund the money back into your Sharesies Wallet.

Step 4: Your trade appears in Sharesies (and gets settled in the background) 🍍

If your order is filled (either partially or fully), you’ll see your investments (if you’ve bought investments) or money (if you’ve sold investments) appear in your Sharesies Portfolio or Wallet. You’ll also get a contract note (it’s like a receipt for the transaction) that gives you all the details about your order and the trade that took place.

In the background, we’ve got an obligation to settle your trade with DriveWealth one business day after the trade date—this is known as T+1 settlement. This means we need to give DriveWealth the money for your order and receive your investment in return (and vice versa if you’re selling). Settlement happens when the legal ownership of the shares and money changes hands, usually two days after the trade date.

Once the trade is settled, your investment is held in the US through DriveWealth. It is held for Sharesies Nominee Limited for you as the ultimate beneficial owner of that investment. This means it remains your investment at all times! We can’t do anything with it unless you tell us to. You can read about how Sharesies’ custodial service works on our blog.

Like to know more? 🤔

If there’s anything else you’re curious about, let us know! Just flick us an email at help@sharesies.co.nz. We’d love to hear from you!