Fidelity Charges $50 for Foreign Settlement Fee. Here’s Why!

When buying foreign OTC stocks on Fidelity, a $50 fee applies for both buying and selling.

This “foreign settlement fee” is an essential aspect to consider when trading foreign securities through Fidelity.

Why Does Fidelity Charge Foreign Settlement Fee?

Some foreign stocks traded on the OTC market aren’t eligible for clearing through the Depository Trust Company (DTC).

This means that transferring these non-DTC-eligible securities incurs extra costs for Fidelity. In turn, they pass on these fees to cover the associated expenses.

How Does It Work?

When you buy a foreign stock through Fidelity, the $50 “foreign settlement fee” will be included in the cost basis.

In total, foreign securities transactions will cost you an additional $100 ($50 to buy and another $50 to sell).

Can You Avoid the Fee?

Unfortunately, the fee is non-negotiable. Even if a foreign stock is traded on a U.S. exchange, if it’s an over-the-counter transaction, the $50 fee will apply.

Not all foreign stocks are subject to this fee. I used to invest in $CSIQ, which is a Canadian-based company, and Fidelity didn’t charge me a foreign stock fee.