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Frequently Asked Questions I explain a little to those totally new to SGX trading system.
1. What are the forms I need to signed when I open a trading account? You required to complete a lot of forms:
2. Why do I need to open CDP account and sign a linkage form when I open a trading account? SGX is a central depository system where CDP (a subsidiary of SGX) keep custody of all tradable shares. When you purchase, shares will be deposit into your CDP account on the T+3, shares will withdraw out from your account if you make a sales. CDP require a linkage form client when client open a trading account with any brokerage firm. You only maintain one CDP account but can be linked to several brokerage firms. You can purchase from brokerage A and sell via brokerage B as long as you have made full payment of your purchase by T+3.
3. How long is the Account Opening process? After your application submitted with all necessary documents, CDP normally takes 3 working days to approve successful applicant. our E-Business dept than takes 7 to 9 days to post out your userid and password separately. Electronic Payment for Shares (EPS) will only approve after 3 to 4 weeks.
4. How do I check my share holdings? The best way to check your stock holdings is via CDP online (www.cdp.com.sg). Usually I encourage everyone to apply CDP I-Pin when they open trading account. If you have not apply for CDP I-Pin, please apply now. Broking houses DO NOT know quantity of shares you hold in your CDP or any other custodian outside the house (Example CPF agent bank or financial institutions).
5. Why my broking house set a BUYING and SELLING limit for me? Broking house is exposed to credit risk when you purchase, unless you pay before buying, therefore set a limit for your purchase. Just get your remisier to raise your limit, he can do it in minute if you pick shares (not contra) most of the time. Similarly, your broking house does not access to your holding in CDP, you can sell shares that you do not own. Therefore, broking house need to set a limit for you to sell. In some cases, you need to provide evidence (current CDP statement) that you own the shares before a selling limit set for you.
6. How do I increase my limit if I want to trade? You can transfer some shares into your broking house or put some money into your trust account, guideline is about 20% of limit required.
7. What if I short sell accidentally? If you realize your short position before the same market day closed, just buy back the quantity you oversold, broking house will compute the difference and settle with you; but if you only notice your short selling after market has closed, try open a SBL a/c and hope you have the share to borrow, otherwise, SGX will impose buying-in on your short position on T+3 (2:30pm). Buying price is 2 bids above T+3 12:30pm price or current price, whichever is higher. I always advice client to cover short position same day because buying-in is very disadvantage to client. In addition, SGX will impose a 5% penalty of the value on the fail delivered shares (shares you sold but not or insufficient in your CDP account) subject to a minimum of S$1,000. <read more>
8. I given my broking house
business, but why my remisier still unfriendly and not
treating me like a customer?
In this industry, risk exposure is far more
important than commission. If you contra regularly without
putting collateral, you are lucky that your remisier do
not close your account. Just pledge some shares with the
house or put some money into your trust account, your
remisier will treat you much better. |