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Buying and selling shares, what to make of FIN's CSN's and holder numbers
For those unfamiliar with the process of buying and selling shares, the multitude of CSNs FIN's and account numbers can be quite daunting. Below is a general run-down on how the process works from a prospective share purchaser's point of view.
Setting up an account with your broker:
To buy and sell shares on the NZX requires the prospective buyer to open an account with a registered broker of the exchange. The NZX has rules that it imposes on brokers but one that has particular relevance when opening an account with a prospective share investor is the "know your client" rule. This requires the broker to have a reasonable amount of knowledge about any new client such as contact details, I.R.D number and previous investment experience. These details will be required when completing a broking firms account opening form. Along with these standard details your broker will need a photo-copied form of photo I.D such as a drivers licence or passport and an encoded bank deposit slip to verify bank details.
Issuance of a CSN number:
Once you have an account set up with your broker they will have a CSN or common shareholder number attached to this account. The CSN is the number allocated to an account used by share registries to keep a record of all the shareholdings held on your account.
Once you have successfully bought or sold your shares your broker will issue you with a contract note which is a proof of purchase or sale. Once the shares are paid for they are registered to your CSN with the share registry then mailing out a holding statement which shows what shares you own and in what quantity. Along with your holding statement, the registry will also mail out a confidential four digit FIN number.
Selling and the FIN number:
Selling your holdings off that account requires the use of a second four-digit number called a "faster identification number" or FIN. This matched with the correct CSN will allow the release of the stock from the registry. Your FIN is a confidential number and is quoted to your broker when placing a sell order. A similar comparison would be the set-up of your bank account and your EFT-POS PIN number, the matching of your confidential PIN and your bank account when you enter the number at an ATM allows the "release" of funds from your bank a/c.
Old holder numbers need to be linked to a CSN:
If you have bought shares some time ago and are now looking to sell them, there is a chance that they are held under a holder number issued by the individual registry responsible for maintaining the register of that particular company. This was called a holder number. Over the past few years there has been a phasing out of holder numbers from individual registries to the common number issued by the NZX. The obvious intention of this is to reduce the number of holding numbers and different FINs that an investor holds to a minimum in an effort to simplify operations. If you have shares that are held with a holder number, that stock will have to be linked to a newly issued CSN in order to be sold. Any future purchases will then be placed on this newly created CSN. Your broker can handle this 'linking' of an old holder number to a new CSN.
One -off sales:
Where an investor has a parcel of shares registered under an old holder number and wants to sell, but has no current broking account and no intention of making future share purchases, a one-off sale can be made. The investor can see any broker with the relevant holder number and FIN along with a photo I.D and bank deposit slip and the relevant transaction can be completed.
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