Established in 1999, CommSec also known as Commonwealth Securities, is an ASIC regulated Forex and CFD broker, wholly owned by the Commonwealth Bank of Australia. The company offers a diverse range of trading products on a proprietary platform from two account types. Unfortunately, customers in South Africa and elsewhere cannot register an account with CommSec as it accepts only residents of Australia who fulfil the stringent requirements set out in the account terms and conditions. Readers living in Australia who would like to know more about this reputable broker should read our in depth review below.
CommSec Special Features
CommSec is very different from other online retail brokers in Australia and South Africa. Notably it offers trading accounts for different types of tradeable products rather one account for trading across all asset classes. We were impressed to see that customers can choose from Australian share trading, international securities trading, margin lending, options trading and CommSec CFDs accounts.
A CommSec demo account can be opened free of charge for a 14-day trial period. CommSec provides 20,000 AUD of virtual funds for risk-free practice trading, giving customers time to get familiar with the proprietary trading platform. Customers in South Africa can find an alternative reliable Forex broker by reading the reviews posted on our website. Furthermore, traders living in Australia can enjoy more flexible trading with other global brokers, providing regulated trading in a secure environment to private traders everywhere.
CommSec International Securities Trading Account
Customers wishing to trade in US Exchange traded funds (ETFs) and US Exchange traded options, can do so by opening a dedicated trading account with CommSec. A subsidiary of the Bank of New York Mellon, Pershing LLC execute the trades on behalf of CommSec.
CommSec Options Trading
The Option Trading account at CommSec can be linked with any other type of trading account including the ‘stand out’ shares trading account. The brokerage takes the unusual steps of linking the account trading opportunities to experience levels in options trading. As traders gain experience, they can unlock further benefits and broader investment opportunities at CommSec by submitting a written request to the brokerage.
ConnSec Share Trading
The minimum investment in the CommSec Share trading account is 500 USD. As the name of the account implies, it is a dedicated shares account and can’t be used for other types of trading. Customers who want to trade in CFDs in addition to shares, are required to open an additional account for CFD trading only and operate the two accounts in parallel. Share account holders get real time quotes on the trading platform, live announcements about shares, live charting and unconditional trading with full flexibility. Interestingly, share account holders can access special brokerage rates with Commonwealth Direct Investment account2 or make real time cash deposits as is the ‘norm’ at CommSec.
CommSec Margin Lending
The concept of margin lending was initiated by CommSec in 1999. Customers are given the opportunity to access loans from $10, specifically for trading and investing with CommSec. Whilst margin loans have strict terms and conditions attached, they enable customers to potentially boost their profits trading in Australian shares, exchange traded options and managed funds amongst other possibilities.
Traders in South Africa can read our broker reviews to find international brokers offering excellent leverage ratios on the trading platform, enabling clients to boost their investment capital and invest with much more money than they have deposited in their trading accounts.
With a CFDs account, customers can select from around 7,000 types of contracts for difference on a market leading platform. The CFDs span Foreign exchange, Australian and international shares, global indices and commodities. Minimum trade sizes start from 10 AUD on shares and depend on the contract size of the financial instrument.
Commission is not charged for CFD trading over commodities, FX and indices, as the trading costs are included in the spreads. However, all fees and commissions for trading are shown in the ‘Financial Services Guide’ pdf on the CommSec website.
There are two types of CFD account offered by CommSec.
- Limited Risk account where all positions must have a guaranteed stop-loss, ensuring that any trading losses will be limited to the amount deposited in the trading account.
- Trader account, where clients can decide of their accord as to whether they want to use the stop-loss feature. However, by deciding not to implement the stop-loss, traders run the risk of losing more money than they have deposited into the trading account.
Importantly, there are several pre-conditions for opening a CFD account with CommSec. Customers must be Australian residents, have experience in trading CFDs during the past year, earn an income and have liquid assets of least 20,000 AUD, also have a bank account in a Commonwealth bank. The minimum initial deposit to open a CFD account with CommSec is 5,000 AUD and the money must be deposited in cash via the real-time funds transfer feature.
CommSec Trading Software
Clients with any type of trading account get access to the dynamic CommSecIRESS trading platform developed exclusively for CommSec customers. The web-based platform can be accessed through the browser of desktop and mobile devices. Additionally, for convenient 24-hour trading on the move, traders can download the CommSec mobile trading app for Android and iOS powered devices, in the Google Play Store and the Apple app store.
Notably with the CommSecIRESS platform, traders benefit from real time market execution with live market information and data streaming. Professional traders can opt to have the ASX data feed visible on the trading platform at the cost of 75 AUD per month. The service can be switched off in the account section of the trading platform.
We noticed that traders are required to pay a subscription fee for several features on the trading platform that can send the cost of using the platform to as high as 82.50 AUD per month. We find this a regrettable aspect of trading with CommSec, especially when most competing CFD brokers in Australia do not charge platform fees. Leverage made available to CommSec customers varies depending on the type of asset traded, however, the trading platform in the Demo account does not offer leverage exceeding 1:100. This is very low compared to most international brokers who provide up to 1:500 leverage. Customers in South Africa can find many brokers on our website who offer the MT4 Forex trading platform which also allows for automated trading with Expert Advisors. The main features of the CommSec platform are listed below.
- Customisable interface
- Free access to regular traders
- Broad ranging market watch
- Stock announcements
- Market data and quotes streamed in real time
- Straightforward, rapid order placement
- Advanced ProRealTime charting
CommSec Customer Support
The first thing we noticed at CommSec is the absence of live chat support. We were surprised by this glaring deficiency, as most reputable brokers offer 24/5 live chat support on the interface, instantly answering customers enquiries and smoothing the way for uninterrupted trading with the broker. However, the broker has several telephone numbers on the contact page, dedicated to the different types of trading assets making the customer support focused. Customers can also send enquiries by email for a fast response. A comprehensive FAQs section and a ‘search’ page where clients can look for information about a specific trading topic, does provide assistance for more general support. Further support is provided through the brochures provided online by CommSec, explaining in detail, the different types of trading available at CommSec.
CommSec Payment Methods
We were surprised to see that CommSec does not accept any type of credit/ debit card, electronic payment method or traditional bank wire transfer to fund trading accounts. This is very unusual for traders living in South Africa where a broad range of payment methods are accepted by online retail brokers. Customers are obliged to make cash payments to their trading accounts using real time transfers. This ensures that traders can continually add funds to their trading accounts and never need run out of money for trading opportunities. It also explains why customers must have an Australian bank account and prove that they have at least 20,000 AUD in the account before they can set up a trading account with CommSec.
The minimum initial deposit required to open a CFD account is 5,000 AUD. For other types of trading accounts, customers must deposit sufficient funds buy an initial shareholding worth at least 500 AUD to start off with. This is referred to as the ‘minimum marketable parcel of shares’ on the CommSec website. Subsequently, traders are usually permitted to buy shares for lesser amounts of money.
CommSec customers are faced with a long list of fees and commissions charged by the broker, and we suggest that potential customers read them carefully on the website, before deciding to register a trading account. The fees and commissions that appear most significant to us are indicated below.
- Variable fees commence from 6.64%
- Online trading and settling on a bank account – $29.95 up to $9,999.99
- Online trading and settling to a CDIA or CommSec margin loan – from $10
- Share trading over the telephone – $59.95 up to $10,000
- For Desktop trading -from $34.95 up to $10,000 in premium and more
- For mobile trading – from $54.60 up to $10,000 in premium and more
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