Where to start and how to start to buy Stock.
SUMMARY
First : You need to have Identification card (IC) for Singaporean and Malaysian or passport for foreigner.
Second : You have bank account. Especially internet banking facility for foreigner. Banks affiliated are DBS bank, UOB Bank, OCBC bank, Citibank,
Third : Open CDP account. Visit 4 Shenton Way SGX Centre 2 Level 2 to open account.
Fourth: Open a trading account with a broker.
Fifth : Fund Deposit. Deposit money into trading account to start buying stock.
Sixth : Buy Stock
Seventh : Sell Stock
START
First :
I.C or passport is the first thing required.
BANK ACCOUNT
Second : Open Bank account.
Bank account number prefer.Open bank account which provide cheque book, ATM card and internet banking facility especially for foreigner.
Visit any banks in Singapore , DBS Bank / POSB or UOB Bank, or OCBC Bank or Citibank
http://www.dbs.com.sg/
http://www.uob.com.sg/
http://www.ocbc.com.sg/
http://www.citibank.com.sg/
CDP ACCOUNT
Third. Open CDP account. CDP = Central Depository (Pte) Ltd
You need to have CDP account to keep your shares, just like you need a bank account to keep your money.
Visit SGX Centre 2 level 2 (beside Lau Pat Sat) to open CDP account.
Get online access to CDP statement, Direct Crediting Service, Corporate Action required Singapore Address. if not, foreigner may check corporate action of share from SGX website.
If you have existing CDP account which you did not use for very long time, you may wish to update signature and address and apply for online access and direct crediting service before you start to trade again.
Visit CDP website to learn more information, www.sgx.com/cdp
TRADING ACCOUNT
Fourth . Open a trading account with a broker.
You need to open trading account. Trading account allows you to buy stock or sell stock.
A list of securities firm will be provided to you from CDP when you open CDP account. You can choose and may open as many trading account with different securities firms.
It takes about one week to get trading account ready.
Procedure to open trading account :
1) Check your information data
2) Get approve account opening
3) Link trading account with CDP account. Once CDP linkage done, you can start to buy shares / sell share.
4) Link trading account wth Bank (may takes 2 weeks) Linkage either EPS or GIRO. if you sold shares before bank linkage done, you receive cheque.
Once the trading account is ready, you will receive a trading account number. Quote your trading account number and Name to your broker when you call to buy stock and sell stock.
ONLINE TRADING
Alternatively, you can do your buying or selling of stock online.
Register for online trading to enjoy lower commission rate. http://www.amfraser.com.sg/ , eServices, eform, registration.
Broker service charges for commission is 0.5% with miniumum $40.00
Online trading charges for commission is 0.275% with minimum $25.00
Beside commission charges, there are clearing fee 0.04%, access fee 0.0075% and GST 7%.
Visit SGX website . http://www.sgx.com/ under individual investor, investor tools, Profit & Loss calculator to learn more about the calculation.
Click here for the link http://www.sgx.com/wps/portal/sgxweb/home/investor_tools/profit_and_loss_calculator
See below example using SGX profit and loss calculator.
DEPOSIT FUND
Fifth. Fund Deposit.
There are a few mode to fund the trading account.
1)Cash,
2)Cheque,
3)ATM bank transfer
4)Internet Bill Payment transfer
5)Swift but there will be transaction fee.
You can visit securities firm to deposit fund paying Cash
You can post your cheque . Behind the cheque write your trading account number and name. You may request for return envelope from your securities firm. Return envelope is only for mailing within Singapore.
You can visit any ATM machine to transfer fund . ATM, under Other service, EPS and Amfraser. There is no limit to the fund you can transfer.Your reference number is your trading account number. 6 digit. if you have 5 digit for your trading account, add "0" infront. Example trading account 89123. You should key 089123.
You can go online, ibanking to transfer fund. You can login into your ibanking, under Bill Payment, search Amfraser, Transfer fund. Reference number will be prompted. Key your trading account number, ensure 6 digit number.
If you transfer fund before 7 pm, Amfraser will receive your fund the next day. if after 7 pm, Amfraser will receive the day after next. 2 days
Notification of Incoming fund
After you transfer fund especially using internet transfer, email or call or visit Amfraser website to notify incoming fund. This is to ensure smooth transfer of fund into your trading account.
Visit Amfraser website Under eServices ---> eform ---> services to https://www.amfraser.com.sg/gcsg/web/FundNotification.jsp
Email or call your broker.
CREDIT LIMIT
Credit limit is entitled to Singaporean. This means Singaporean allow to buy share without fund deposit into trading account. They need to pay their share before the settlement date of purchase share.
Credit department will review based on individual background to give how much credit limit. $10,000 credit limit or more.
BUY STOCK
Sixth : Buy share.
After you deposit fund into your trading account or you get credit limit given to you, you can buy stock.
Either you call the broker to buy stock or you login online trading platform.
The next day, you will get the settlement amount and settlement date.
Settlement date is T+3. Trade date is the day you bought the shares and add 3 days . For example, you bought share on Monday, the settlement date will be on Thursday.
A contract note will be mailed to you on the next business day after you transacted.
Contract note provide all the information of the transaction.
Gross amount is price multiply the number of shares. Charges include Brokerage commission, Clearing fee, access fee and GST 7% on commission, clearing fee and access fee. Note the minimum commission charge is $40 for broker service or minimum $25 for online trading.
Minimum buy is 1000 shares. 1 lot is 1000 shares. To buy less than 1000 shares, you must call broker. Odd lots shares quotation. This is for buying and selling shares less than 1000 shares. No online service for odd lots shares. Only use broker service for odd lots shares.
Settled trade on settlement date.
Successful settlement of trade, you will have money paid for your purchase of stock. You will receive shares which is credited into CDP account. Note if you have applied for online access CDP statement, you should be able to check the securities you have bought.
Failure settlement of trade, no payment of fund. After the settlement date, there is no payment received, there will be a force sell. Penalty imposed. Commission charged higher. You will have to bear all the charges and possible losses.
Force Sell If buyer fails to pay the purchase consideration by T+3 market days, Amfraser shall close off the purchase position by force selling the shares in the market.
The buyer will be liable for all the charges and expenses incurred in the purchase contracts as well as the force sold contracts, including any loss, if any.
SELL STOCK.
Seventh : Sell stock
You may call broker to sell stock or go online to sell stock. Only you know the number of shares you have in your CDP account. You can go online access CDP to check your statement.
Visit SGX website to ensure there is no upcoming Corporate Action that may influence your number of shares.
After you sold the stock, the next day you will receive the net amount and settlement date with breakdown with the charges. Settlement date is T+3. Example if you sold share on Monday, you will have settlement date on Thursday.
Settled trade on settlement date.
Successful settlement of selling stock trade means you give your shares and receive money. Money will be credited to you the next day after the settlement date. If no bank account, you will receive cheque.
Failure to settle trade means you do not have shares. You will be forced to do a Buy-in. This is a serious penalty to sell stock when you do not have stock.
Buy in
For non delivery of shares on T+3 market days, SGX-ST will institue buy-in of shares on the market day following the due date (ie T+4). The selling client will be liable for all charges and expenses incurred in the sale contract as well as the buying-in contract, including losses, if any.
It is more serious to sell trade when you don't have shares.
Buy-in costs levied by SGX-ST
1)Brokerage payable to SGX-ST is 0.75% on gross proceeds
2)SGX Trading Fee 0.0075% on gross proceeds
3a) Clearing fee in SGD denominated securities is 0.04% on gross proceeds subject to max S$600.00
3b) Clearing fee in SGD denominated warrants is 0.05% on gross proceeds subject to max S$200.00
4) Buy-in fee imposed by SGX-ST is $75+GST7% for each failed sale contract.
5) Buy-in penalty fee levied by SGX-ST on failed delivery of shares is 5% of value of failed trade subject to a minimum of S$1000.00
6) Penalty of S$5000.00 for each day a sell contract is overdue.
SGX-ST may with consultation with its Disciplinary Commitee impose a penalty of not less than S$20,000, if found culpable, for failure to procure and deliver securities by T+1 (for securities sold to buy-in board) or T+7 (for ready market)
8) Goods & Service Tax (GST) 7% on brokerage, clearing fee, buy-in fee and SGX trading fee.
CONTRA
You bought stock and sold stock before the purchase stock settled.
A contra trade.
You either have contra profit or contra loss and settle on the settlement date.
You need to pay contra loss before the settlement date.
You will receive money credited into your bank account the next day after settlement date.If there is no bank account, you will receive cheque.
To learn more about SGX stock, visit SGX website at the bottom of the website there is directory. Visit the SGX Academy and Online Education Programme.
SGX Website at http://www.sgx.com/
Click here to SGX Academy http://www.sgxacademy.com/
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