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Forex Strategy

Is it possible to buy foreign shares on IIS (USA, etc.)


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Many investors who are just starting to trade on the stock exchange are interested in all the instruments available for investment, which then allows them to choose the most convenient ones. For example, it is possible to invest in foreign securities, even from an individual investment account. However, there are conditional restrictions that affect the answers to the questions: where, to whom and how. is it possible to buy shares of foreign companies on IIS

Russian investors can buy shares, but not all. Only those traded on the St. Petersburg exchange floor are available for purchase (access to it is provided by the largest Russian broker BCS). The rules in force on the stock exchange are binding on the part of all participants. In particular, an investor in the public service is not eligible to purchase foreign assets. For such investors, only financial instruments of Russian origin are available.

Is it possible to buy foreign shares for dollars on IIS

The answer to this question depends on the broker itself. If his catalog of available instruments contains shares of foreign companies, then the investor gets the opportunity to buy them to an individual investment account. What exactly will be available:

  • Shares of foreign companies;
  • Bonds of foreign enterprises;
  • OFZ;
  • Municipal Loan Bonds;
  • Eurobonds;
  • Foreign currency. Not all are allowed for purchase (among the allowed euros, dollars, yen).
Figure 1. On the IIS, you can buy shares of foreign companies – American, German, Spanish, etc.

Should investors be worried when buying foreign shares on IIA? Can they buy currency on an investment account? These financial instruments are available to almost all investors. Broker BCS also provides these opportunities. Account opening takes five minutes. You can easily and quickly transfer savings from another broker. However, one should not forget about the exceptions to the rules, which will be discussed below.

Civil servants wishing to purchase shares of American companies on IIS should know some rules

In the Russian Federation, as in other states, there are people in the public service. These are military and civilians, employees of ministries and departments. All of the listed categories of citizens have the right to open an individual investment account. But it is for these categories that some restrictions are established. One of them concerns the ban on the purchase of shares of foreign companies. The list of restrictions includes any securities and assets that were issued outside Russia. For example, a civil servant cannot buy German bonds. Below is a list of what cannot be bought by citizens in the public service:

  • Assets issued on the basis of foreign currencies. For example, Eurobonds;
  • Bonds of other countries.

Based on the foregoing, we can conclude that only domestic companies and enterprises have securities available to civil servants. But there are additional restrictions here as well. So, if a Russian asset is the cause of a conflict of interest between official duties and personal gain, then a citizen has no right to acquire such investments. In this regard, each employee of the state and municipal service should carefully study his own job description and all internal regulations associated with it.

The question often arises as to whether it is possible to transfer the IIS for service to the management company? The answer will depend on the content of the investment portfolio of the chosen organization. If the portfolio contains assets of foreign companies, then ordinary citizens may well give their account for service, but civil servants are prohibited from transferring their account here for service. Now we need to understand the situation with mutual funds. If funds contain foreign target audiences or other similar instruments, it is strictly forbidden to acquire shares of such funds.

On a note

Civil servants are people who participate in the process of governing the state. This needs to be clarified immediately, since there are simply employees of budgetary organizations, whose activities are not reflected in the above process. This includes teachers, doctors, athletes and everyone involved in sports, cultural workers. These citizens are not civil servants. This means that their IIS has no restrictions in terms of trading on the stock exchange.

When is the purchase of foreign shares on the IIA undesirable?

In July 2020, news appeared that the use of IIS to purchase securities of foreign companies may be prohibited. A group of deputies, including the head of the financial market committee, Mrs. Aksakova, decided to explore the possibility of buying foreign target audiences using an individual investment account.

Initially, IIS was created in order to increase the investment of money in the national economy. As a gratitude, citizens are given the opportunity to take advantage of the tax deduction, which can reach 52,000 rubles per year, subject to the use of type A benefits, and exemption of investment income from personal income tax, if type B deduction is used.

If an investor, investing money in IIS, buys shares of foreign companies and other financial instruments with them, then these investments do not bring benefits to Russia. All income goes to other countries. In this regard, perhaps the State Duma will adopt a law which will stipulate that the purchase of foreign assets on the IIA is prohibited. In this case, the type of deduction will not matter: type A, type B, or both at once. But, to date, there is not even a bill on this topic. Therefore, investors should carefully monitor information that appears in the media,

How you can buy foreign stocks (USA, etc.) on IIS: instructions

To purchase them, the investor will need the following actions:

  • Register an individual investment account in your name;
  • Top up a deposit in the amount of 10,000 rubles;
  • Decide how the trading will take place: by using an independently chosen strategy or transferring the account management to a broker or management company;
  • Choose investment instruments that will be interesting for investments. Purchase them using the terminal or using a voice command.
Figure 2. You will first have to convert rubles from the IIA into US dollars, in order to then buy shares of foreign (foreign) companies.
Figure 2. You will first have to convert rubles from the IIA into US dollars, in order to then buy shares of foreign (foreign) companies.

On a note

Securities of foreign companies must be purchased with the money of the country where the issuer is located. But here it is important to remember that IIS works exclusively with Russian rubles. In this regard, before the foreign shares are credited to the account, the broker converts Russian rubles into the required currency. Particular attention should be paid to the exchange rate, since there can be both profit and loss.

What American (and not only) stocks can be bought on IIA

It is allowed to purchase only those traded on the St. Petersburg Stock Exchange. The list of available assets includes 1200 shares, most of which are represented by US securities.

Today, the most popular are blue-chip stocks, which are owned by the largest financially stable companies. True, it must be said honestly that the income on such shares is not very high, but the risks are also reduced to a minimum. Blue-chip stocks will be the best choice for first-time investors and will also appeal to conservative investors looking for a stable income. The following securities of American companies can be purchased on an investment account:

  • Microsoft;
  • Google;
  • Facebook;
  • Apple;
  • Amazon;
  • McDonald’s;
  • Tesla and others.

ETFs are also available to individual investment account holders. These assets can be purchased on exchanges such as London or Chicago.

Investing in exchange-traded funds has a lot of positive aspects, since by purchasing one ETF, a large number of foreign securities are immediately taken into possession. Accordingly, the cost of an asset is made up of all target audiences included in its composition. There is a possibility of expanding the investment area, which will not only reduce risks, but also form a relatively stable investment portfolio. In this case, experts recommend making long-term investments. The income will be small, but the income will be stable, and the risks are minimal.

Based on the foregoing, the question of whether it is possible to buy shares of foreign companies on the IIA has a positive answer. It is forbidden to invest money in foreign shares only by those who are in the public service. However, it is possible that the ban will soon affect not only civil servants, but also ordinary owners of IIS.

You do not need to register a brokerage account to buy foreign securities. A simple IIS that can be opened with the best Russian broker BCS is quite enough. The client will not spend much time and within five minutes any account will be opened in his name. It is also simple and easy to replenish IIS, after which you can immediately exchange Russian rubles for dollars and earn money on the exchange, buy foreign CAs and other assets that will make a profit.

Moris Akline
About author

Speculative operations in the foreign exchange and stock market. Work with futures and indices on CME. Work on FORTS and RTS. Development of portfolios and investment strategies for clients. Knowledge of technical (price charts of various types, indicators and oscillators, trends, channels, support / resistance levels) and fundamental analysis, take note of news. I work according to my trading strategy in compliance with the rules of capital management and risk management. Development of trust management strategies. Technique of order execution, placing and changing protective stop-losses, hedging.
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