Standard Chartered - Only Online Trading in town with no minimum commission

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Soul77

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SCB, cheap but no good

rather use local brokerage house, more peace of mind keeping the shares in cdp

I use SCB when buying /selling small lots <$5000. Bigger amounts better use those with CDP linkage.

My only worry is if SCB goes bust... What will happen to our stocks as it is not deposited to CDP? Anybody know?
 

felixleong

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I use SCB when buying /selling small lots <$5000. Bigger amounts better use those with CDP linkage.

My only worry is if SCB goes bust... What will happen to our stocks as it is not deposited to CDP? Anybody know?

the problem with SCB holding your shares is that they sometimes lend out those shares to institutional investors for extra income (hedge funds borrow the shares cheaply for shorting and that is why your fees are cheaper too), in an event of a massive financial crisis, counter party risk could result in you no being able to redeem your shares, the odds are very very low but still possible

also to add, when your shares are kept in cdp you can also apply to lend them out, the fee charge on borrowers is 8%, cdp takes half and u take half (4%)
 
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Sinkie

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the problem with SCB holding your shares is that they sometimes lend out those shares to institutional investors for extra income (hedge funds borrow the shares cheaply for shorting and that is why your fees are cheaper too), in an event of a massive financial crisis, counter party risk could result in you no being able to redeem your shares, the odds are very very low but still possible

also to add, when your shares are kept in cdp you can also apply to lend them out, the fee charge on borrowers is 8%, cdp takes half and u take half (4%)

Most cfd provider also borrow shares from Scb So that these cfd can lend them out for their client to short one

Then the reason for Scb offering no min comm is not to make money from stock trading but is to get your details to sell your products to you and also boast their deposit nia.

And also by offering free transfer fee from Cdp to Scb is so that they can "trap" u and u can only sell via them and when you are "trapped", if they suka suka increase their fee or whatever happen to them, you will have to pay very hefty transfer fee to move out le..

But still the saving of no min commission of every trades will outlive all the above disadvantages la haha
 

felixleong

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For small time investors with a stock portfolio of say 10-20k, using scb makes a lot of sense due to the savings from low commission rates. For experienced investors with 6 figure and up portfolio, safer to just stick to local brokerage and put your shares in cdp, you really dun wanna take even a small risk just to save a few dollars give the size of your investments
 

Andrew Chen

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Do you think the transaction costs saved over time using SCB would be sufficient should an investor decides to port holdings from SCB custody to CDP, if the portfolio grows to a six figure sum?
 

Shiny Things

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For small time investors with a stock portfolio of say 10-20k, using scb makes a lot of sense due to the savings from low commission rates. For experienced investors with 6 figure and up portfolio, safer to just stick to local brokerage and put your shares in cdp, you really dun wanna take even a small risk just to save a few dollars give the size of your investments

Huh? If you've got a big portfolio you care even more about low commissions, because the absolute dollar amounts are larger. The answer's not necessarily Stanchart, but it's certainly not "go to a local brokerage and pay 0.28% on everything".

If I didn't want to take even a small risk, I'd park all my shares and all my spare cash at JP Morgan Chase, pay $25 a trade, and earn zero interest. But I don't, because that would be an extra $300 or more a year in brokerage costs and $500+ in foregone interest; and that eight hundred bucks is a weekend in Vegas or Tahoe. Every single year.

(For that matter, let's be honest, dealing with CDP is an enormous pain in the arse. There's absolutely no reason your broker shouldn't be able to see what you own.)

Do you think the transaction costs saved over time using SCB would be sufficient should an investor decides to port holdings from SCB custody to CDP, if the portfolio grows to a six figure sum?

Yep. Every time you do a $1k trade with Stanchart, you're saving about $26 over doing it with a local broker. Even if your average trade size is $5k, you're saving about $15. Multiply that by one trade a month, and multiply that by ten years, and you're talking serious money.
 
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Shiny Things

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My only worry is if SCB goes bust... What will happen to our stocks as it is not deposited to CDP? Anybody know?

I've answered this a zillion times on the forums before, but to repeat:

Holding stocks at Stanchart is exactly like holding a bank account at Stanchart.

Stanchart keeps the shares in custody for you. You are the beneficial owner of the shares; and if Stanchart goes bust, the shares are still yours and you can transfer them out to another broker.

This is the way things work in a lot of other stockmarkets - America works this way, almost everyone holds their stocks in the broker's account rather than their own. And it works fine here.
 

felixleong

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If your portfolio grows bigger, normally you should be able to get lower rates like 0.20% or 0.25% for your trades, just discuss with your broker. Also by default for trade sizes over 50k and over 100k the rates are lower too for most houses.

Also as a small investor growing his portfolio from 5 figures using scb into 6 figures, he logically could still keep his older stocks in scb just that maybe once his portfolio cross 50k or 100k mark he would start puting his new postions into cdp instead

Cheers
 

felixleong

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In popular markets like US and Hong Kong, investor's shares are held by the brokerage house. As such its usually pretty common for their local investors to use a few brokerage houses(like the old saying of not putting all eggs in one basket)

The benefit of the singapore market is having a central location to hold your shares which is backed by the government, however the downside is seen from the increased costs that investors have to bear due to the inefficients of cdp, as we have one of the highest fees paid to the exchange (sgx/cdp)
 

Soul77

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In US they have SIPC to cover for insolvency of brokerage house. Since SCB is not cdp. I dont' think you'll get 100% of the money. Not in the short time at least.

When MF Global filed chapter 11 in 2011, my futures position was forced liquidated. Luckily they still have assets in Singapore. Then with MAS intervention. Managed to get 75% of my fund back. Although they keep announcing to papers that the fund they return is 90%. Up until now. 3 years later. I havent seen the rest of my money back..
 

felixleong

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In US they have SIPC to cover for insolvency of brokerage house. Since SCB is not cdp. I dont' think you'll get 100% of the money. Not in the short time at least.

When MF Global filed chapter 11 in 2011, my futures position was forced liquidated. Luckily they still have assets in Singapore. Then with MAS intervention. Managed to get 75% of my fund back. Although they keep announcing to papers that the fund they return is 90%. Up until now. 3 years later. I havent seen the rest of my money back..

well said~
 

wahkao3

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In US they have SIPC to cover for insolvency of brokerage house. Since SCB is not cdp. I dont' think you'll get 100% of the money. Not in the short time at least.

When MF Global filed chapter 11 in 2011, my futures position was forced liquidated. Luckily they still have assets in Singapore. Then with MAS intervention. Managed to get 75% of my fund back. Although they keep announcing to papers that the fund they return is 90%. Up until now. 3 years later. I havent seen the rest of my money back..
that must be a horrible experience. Did FDIC or MAS kick in to top up the remainder 25%?

tell us more
 

Asphodeli

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If your portfolio grows bigger, normally you should be able to get lower rates like 0.20% or 0.25% for your trades, just discuss with your broker. Also by default for trade sizes over 50k and over 100k the rates are lower too for most houses.

Also as a small investor growing his portfolio from 5 figures using scb into 6 figures, he logically could still keep his older stocks in scb just that maybe once his portfolio cross 50k or 100k mark he would start puting his new postions into cdp instead

Cheers

Not really; 20% of my XXk portfolio is in SCB.

Due to market hoo-ha and drama (called "corporate actions"), I am planning to move penny stocks to CDP and blue chips to SCB...easier to handle for the time being, unless SCB implements odd-lot or 100/lot trading (which I would think would take ages)
 
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Asphodeli

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the problem with SCB holding your shares is that they sometimes lend out those shares to institutional investors for extra income (hedge funds borrow the shares cheaply for shorting and that is why your fees are cheaper too), in an event of a massive financial crisis, counter party risk could result in you no being able to redeem your shares, the odds are very very low but still possible

also to add, when your shares are kept in cdp you can also apply to lend them out, the fee charge on borrowers is 8%, cdp takes half and u take half (4%)

You can only lend $50k worth of shares in a company, or 50,000 shares in a company.
 

Sinkie

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Not really; 20% of my XXk portfolio is in SCB.

Due to market hoo-ha and drama (called "corporate actions"), I am planning to move penny stocks to CDP and blue chips to SCB...easier to handle for the time being, unless SCB implements odd-lot or 100/lot trading (which I would think would take ages)

100 share per lot is a must and Minimun lah
 

felixleong

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You can only lend $50k worth of shares in a company, or 50,000 shares in a company.

although its stated like this from the website

No need 50,000 shares actually. I had shares loaned out that are less than 10,000. It depends on demand and supply actually.

Anyway, most investors can just register for it. It is free anyway and when you have the shares that they want, they will loan out for you.
 
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felixleong

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anyway for those interested in making extra income from lending of shares can read this article

"SOME YEARS ago, Veronica transferred a dozen stocks from her CDP (Central Depository) account to Phillip Securities to participate in its Securities Lending Programme."


Great Way to earn nice passive income on your shares

so basically by using SCB, you are giving them extra income as they can lend out your shares to institutional or retail clients(and you getting nothing, while taking the same risk)

the commission is cheap for a reason

cheers
 
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Asphodeli

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100 share per lot is a must and Minimun lah
I know it's a must, but how fast SCB can implement is another matter...other than that I have no major concerns :)

Sent from GAGT Android App
 

Asphodeli

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although its stated like this from the website

No need 50,000 shares actually. I had shares loaned out that are less than 10,000. It depends on demand and supply actually.

Anyway, most investors can just register for it. It is free anyway and when you have the shares that they want, they will loan out for you.
I think each brokerage house has their own "rules" for securities lending la. The one I quoted was directly lending to SGX/CDP.

Sent from GAGT Android App
 
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