Exercising US stock options from the UK

madeinwales

Hi. I work for a US company or rather am just about to leave and I have an employee stock option scheme. I am able to exercise all my vested stocks upon leaving the company but require a US brokerage account to do so (DTCC). Now as far as I can tell I'll only need to do one trade using the cashless exercise option but does anyone have any recommendations on how to go about opening an account to trade NASDAQ company that fulfils the DTCC requirement? I have to provide my company the Brokerage name, DTCC number Broker's name and phone number!

greenglide

Does the stock option scheme not include an account to hold the shares and a brokerage account to allow you the sell and possibly buy.

I work for a UK subsidiary of a US company and their stock option scheme gives me an account with Merrill Lynch which let's me hold and trade the shares once they vest.

If you don't already have a suitable account how do you pay US taxes on the shares when they vest (depending on the type of option) and the US tax on the dividends that you would have accumulated?

Are these options which automatically vest if you "separate" from the company? In my case they vest in three chunk after 1, 2 and 3 years. Leaving before the third year is up means the options are lost unless the leaving is retirement at the normal retirement age in which case the options vest fully immediately.

Opening a brokerage account solely to sell your holdings without help from the employer sounds as if it will be " challenge".

madeinwales

Hi GG. Thanks for the reply. No the scheme doesn't operate with it's own account so I'm required to set one up myself. The options automatically vested annually over a 5 year period but as I'm leaving the company I'm only allowed to exercise the option on the shares that have vested so far which is 2/5.

I spoke with the legal counsel for the company yesterday and he's working with our UK entity to determine how a method for only incurring tax liability in the UK rather than the US and then the UK on top of that. I'm only allowed to actually sell 22% of the vested stock and then retain the remainder in the broker account until such time that the parent company allows further sales of stock. Not sure why that is. If I hold the stock and no longer an employee I don't know why I wouldn't be able to buy and sell as anyone else would be able to.

This is the first time my company have run a scheme like this and to be honest I think they're learning as they go along.