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How to open a brokerage account in Singapore

How to open a brokerage account in Singapore

We get emails time to time from readers who’re new to investing about the way to open a brokerage account in Singapore. Most of time, we merely level them to our stockbroker (who principally units the whole lot up for them).

However we realised there are different individuals who can also be fascinated about understanding methods to open a brokerage account — and the issues that go into selecting the best brokerage — however simply haven’t gotten round to asking the way it’s completed. So we determined to do a fast, easy information on the way to open a brokerage account for many who want a bit of bit of recommendation.

However first issues first — earlier than you open a brokerage account, it’s essential select a brokerage agency. Singapore brokerage companies are very almost comparable within the charges they cost (S$25) and the amenities they supply. However there are nonetheless some minor variations (e.g. ease of utilizing buying and selling platform, degree of help, and so forth.) which will tip the scales in favour towards one specific brokerage for you.

So earlier than we go into the steps of establishing a brokerage account, listed here are some issues to think about:

7 issues to know when opening a brokerage account

1. CDP vs. nominee account

Earlier than you open a brokerage account with a brokerage agency in Singapore, you first have to open a central depository (CDP) account. What’s the distinction?

A brokerage account lets you commerce shares by way of your brokerage agency. The CDP account is the place all of the shares you buy from the native inventory market (i.e. the SGX) are positioned. The CDP account is held instantly by the investor (you) which means you’re the direct proprietor of the shares. Being the direct proprietor additionally provides you sure benefits — voting rights, the proper to attend AGMs, and so on. Do notice you’ll be able to have a number of brokerage accounts with totally different brokerages however you solely want one CDP account.

The opposite choice is to have your shares held in a nominee (custodian) account by your brokerage. This implies the shares are purchased beneath your brokerage’s identify in your behalf after which positioned in a nominee account assigned to you. Presently, 4 brokerage companies maintain your shares in nominee accounts — Citibank Brokerage, Normal Chartered, SAXO Capital Markets, and iFAST Monetary.

You possibly can learn extra concerning the execs and cons between utilizing a CDP and nominee account.

2. Brokerage charges

Whenever you examine charges amongst Singapore brokerages, you discover that each one of them cost kind of the identical fee charges:

Brokerage Min Charges (S$) Buying and selling Commissions
≤ S$50Okay > S$50Okay-100Okay > S$100Okay
CIMB Securities 25 zero.275% zero.22% zero.18%
Citibank Brokerage 28 zero.25% zero.20% zero.18%
DBS Vickers 25 zero.28% zero.22% zero.18%
iFAST Monetary 10 zero.08% zero.08% zero.08%
KGI Securities 25 zero.275% zero.22% zero.18%
Lim & Tan Securities 25 zero.28% zero.22% zero.18%
Maybank Kim Eng Securities 25 zero.275% zero.22% zero.18%
OCBC Securities 25 zero.275% zero.22% zero.18%
Phillip Securities 25 zero.28% zero.22% zero.18%
RHB Securities 25 zero.275% zero.22% zero.18%
SAXO Capital Markets 15 zero.15% zero.15% zero.15%
Normal Chartered 10 zero.20% zero.20% zero.20%
UOB Kay Hian 25 zero.275% zero.22% zero.20%

Charges proven are for SGX Singapore greenback shares solely. Charges might range for foreign-listed shares and overseas currency-denominated shares. Up to date as of two January 2019.

You’ll discover a number of exceptions — Citibank Brokerage, SAXO Capital Markets, and Commonplace Chartered all cost decrease fee charges. The rationale for his or her decrease costs is as a result of these brokerages maintain your shares in a nominee account as an alternative of your CDP account, which is much less well-liked with native buyers. One huge function about SAXO I’d like to say is their entry to 29 exchanges around the globe — good for the worldwide investor.

Singapore additionally just lately welcomed a brand new participant with the entry of iFAST Monetary. iFAST additionally expenses a low fee payment they usually present entry to the Hong Kong market. iFAST expenses the identical charges for Hong Kong shares and has no custodian charges — nice information if you wish to spend money on Hong Kong shares. Like Citi, StanChart, and SAXO, your shares are held in a nominee account if you commerce with iFAST .

three. Market entry

I’ll assume you propose on buying and selling within the native inventory market because you’re to trying to open a brokerage account in Singapore. However in addition to the SGX, you might also be interested by shares listed in overseas markets like Malaysia, Indonesia, Thailand, Hong Kong, the U.S., and so forth. If that’s the case, you in all probability need to verify if a brokerage presents you entry to the markets you need.

Do word that overseas shares usually are not held in your CDP account, as an alternative they’re held in a nominee account together with your brokerage. Most native brokerages cost S$2 per 30 days per counter for overseas shares. This will add as much as fairly a bit when you make investments fairly a bit abroad (during which case you might choose to go direct to a overseas brokerage agency to save lots of on charges).

For U.S. markets, I personally want to make use of a U.S. brokerage as their commissions are less expensive at round US$5 per commerce (Interactive Brokers goes as little as US$1 per commerce). A number of U.S. brokerages like Charles Schwab and thinkorswim have Singapore branches which may come in useful in case you want any help.

Associated: 5 the reason why you must spend money on overseas inventory markets

four. Kinds of funding merchandise

In addition to market entry, you might also need to contemplate the kinds of funding merchandise obtainable to you. Apart from shares, brokerages may additionally supply entry to ETFs, unit trusts, bonds, choices, futures, CFDs, and so forth.

Some buyers might want entry to a few of these merchandise – for instance, I’ll need to use put choices whereas ready to buy a inventory. However in the event you’re not conversant in them and new to investing, then it’s in all probability greatest to remain away and persist with investing in simply shares, bonds, and sure ETFs.

5. Buying and selling platform

Should you like to put your trades on-line or in your cellular typically, then you could like having a web-based buying and selling platform/app that’s straightforward and intuitive to make use of — although that is subjective and comes down to non-public preferences. For those who’re heavy into technical evaluation then options like worth charts and technical indicators could also be essential to you as nicely.

In that case, chances are you’ll think about making an attempt a demo of the brokerage’s buying and selling platform to see for those who like utilizing it. The very last thing you need is be confused by your brokerage’s buying and selling platform and you find yourself keying within the flawed trades which might value you some huge cash.

6. Popularity and monitor report

In all probability crucial issue in relation to selecting a brokerage is its fame. We don’t need to be caught in a state of affairs the place a brokerage agency goes bust when you have got hundreds (or hundreds of thousands) of dollars of your hard-earned cash stored with them. Regardless that your shares are protected in a CDP or nominee account, issues can get messy!

MF International, one of many world’s largest derivatives brokerages, misused US$1.6 billion of its clients’ funds to cowl its personal buying and selling losses earlier than the brokerage agency finally filed for chapter in 2011. Native buyers of MF International Singapore have been hit and feared they could by no means get their funding funds again. It’s subsequently essential to examine a brokerage’s historical past and search for any warning indicators that is perhaps trigger for alarm. In MF International’s case, the agency had a collection of perceived liquidity issues and was hit with giant fines and penalties beginning in 2008 earlier than it lastly collapsed in 2011.

Relating to SGX retail brokerages in Singapore, all of them are tightly regulated by the MAS and lots of have been round for many years. For instance, Lim & Tan Securities and Phillip Securities have been each established within the 1970s. Some brokerages are additionally owned by banks that are family names with Singaporeans.

7. Degree of help

Discover a devoted stockbroker that is ready to offer you nice service and well timed help. More often than not, my stockbroker is a fast WhatsApp textual content, e-mail or telephone name away. And despite the fact that I can log in to commerce on-line, I often contact my stockbroker instantly and he will get the job achieved.

I perceive that discovering a great buying and selling consultant that fits your wants could be hit and miss at occasions, however for those who handle to take action, that’s nice! I can’t point out the variety of occasions my stockbroker has been there to assist me settle any administrative points or reply any queries I’ve had relating to my trades. On the opposite aspect of the coin, nice service additionally means being a great shopper. So don’t pester your stockbroker incessantly and solely strategy them if you actually need their help.

Most significantly, you need a stockbroker that follows your funding goal. If he understands that you simply’re a medium/long-term investor, he shouldn’t be calling you to supply every day market commentary (until you request it) or lure you into speculating on short-term trades.

Although a stockbroker depends in your buying and selling commissions to earn his dwelling, an trustworthy one won’t put his pursuits over his shoppers’. So ensure you discover a stockbroker you’ll be able to belief and who’s candid with you always.

Steps to open a brokerage account in Singapore

Step 1: Open a CDP account

To open a CDP account, that you must have a checking account with one of many following banks in Singapore – Citibank, DBS/POSB, HSBC, Maybank, OCBC, Commonplace Chartered Financial institution and UOB.

Obtain and refill the CDP software type, embrace your supporting paperwork, and mail it to:

The Central Depository (Pte) Restricted
11 North Buona Vista Drive #06-07
The Metropolis Tower 2
Singapore 138589

Step 2: Select a brokerage and open a brokerage account

There are principally two methods to open a brokerage account:

a) Open an account on-line

Merely obtain and refill the appliance from, embrace your supporting paperwork, and mail it to the brokerage’s mailing tackle.

To make issues simpler, we’ve included the related sign-up hyperlinks for all Singapore brokerages under:

b) Head to the workplace

In case you completely hate coping with paperwork (like my spouse) otherwise you’re unsure find out how to refill the types, then you possibly can head right down to the workplace of the brokerage of your selection and have a consultant assist you full your complete course of on the spot.

One other benefit if you head right down to the workplace is that they will additionally help you to open a CDP account should you haven’t already completed so, which suggests you possibly can skip Step 1. Candy.

The fifth perspective

Opening a brokerage account is step one you have to take to start out investing; you actually can’t commerce with out one! So I hope this easy information provides you some clear instructions and helps you open a brokerage account in Singapore.

In case you have any questions that you simply assume we might assist with, merely ask within the feedback under and we’ll be glad to share what we all know. Joyful investing! 😊

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