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Investment Clubs Manual044 - Stockbroking services Most of...

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Unformatted text preview: Stockbroking services Most of Britain‘s leading stockbrokers are keen to carry out investment club business because they realize that today’s club members are in many cases tomorrow’s individual private investors. The authorities are keen to make club share transactions as easy as possible but at the same time there must be safeguards in place to protect the clubs, its members and the stockbroker. Therefore the governing body of the financial service industry, the Financial Services Authority, has issued guidelines which must be followed when a broker opens an account for a club Complete details of each member have to be provided and each member has to sign the appropriate forms. This may seem rather zealous on the part of the FSA but remember, it is a protection for the members as well as the broker and when, as we hope and expect, the club portfolio reaches a significant size its activities will be rightly scrutinized by the authorities. The first share purchases One of the most exciting moments in the early history of every Investment club is the decision to make the first share purchase. This is where the meetings become lively as members’ opinions are heard and considered. Eventually, the decision is made to buy AnyCo pic. There are two methods by which shares can be purchased. It's all too easy to fall in love when it comes to the stockmarket. You have researched your share and are confident It will go up in price. If the opposite happens, and it drops through your stop-loss barrier, sell immediately. Portfolios are littered with dead shares that escaped being sold because the club regarded them as ‘special cases’. New Issues When a company floats its shares on the stockmarket the general public is often - but not always - Invited to subscribe for the initial issue. It is perfectly legitimate for an Investment club to apply for such shares through the nominee account of their broker. 0C b 2008 ‘° W ProShare Investment Club THE MANUAL ...
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