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

Fidelity offers commission-free trading for stocks, options, and ETFs on all U.S stock exchanges. Any trading activity that involves foreign stocks on the OTC market will incur a fee of $50.

The fee listed by Fidelity as “foreign settlement fee” will be included as part of the cost basis when you buy on Fidelity.

In total, the foreign securities transactions fee will add up to $100 ($50 to buy + another $50 to sell).

trade-foreign-stocks-otc-market-fidelity-screen

Can you avoid Fidelity foreign stock transaction fees?

The answer is no and here’s why.

Some foreign stocks trading on the OTC (over-the-market) market are not eligible for clearing through Depository Trust Company (DTC). Non-DTC-eligible securities will cost Fidelity extra money to transfer the stock. As a result, they charge these fees to cover the overhead.

I reached out to Fidelity for a reimbursement of their foreign exchange commission fee, but they kindly declined.

Comments:

Chris D:

I bought a lot of CSIQ stock which is Canadian and didn’t get this fee.

Han L:

The Fidelity platform is not very explicit about this. If it’s on USA exchanges you are good.

I got this the other day for buying foreign OTC stocks.

(010398) All foreign ordinary securities orders placed online are routed to a U.S. market maker for execution in the over-the-counter market. If the quote shown is not current, please call 800-544-2976 for updated prices.