Before you can buy shares listed in the local stock market, you will first need to open a Direct Securities Account with The Central Depository (CDP). The CDP is basically a place where all the shares you have bought from the local stock market are kept or stored.
To open a CDP account, you must be at least 18 years old and not be an un-discharged bankrupt. You can open an account either by:
- Opening a Direct Securities Account directly with CDP via their Customer Service Counters, or,
- Opening a sub-account with Depository Agents, which are the Brokerage Firms, a.k.a Brokers.
If unsure, the local brokerage firms are likely to help you with the setting up of a CDP account. A brokerage account is essentially an account you have with a brokerage firm that allows you to buy and sell shares.
The purchase/sales of shares are done either through online trading or by making phone calls to Remisers and/or Dealers. One thing to note: one can have multiple Brokerage Accounts with different Brokers but one person only requires one CDP Account.
List Of Brokers
There are many Singapore Stock Exchange approved Brokers, a list of which can be found here. Usually, these Brokers require an age limit of 18 or above (with some Brokers requiring an age limit of 21). The Brokers will require documents such as your bank account statements, payslip, CDP account number, and other identification documents, during the setting-up of your Brokerage Account, of which more details can be found from the individual websites of the Brokers.
Bear in mind that each time you buy or sell shares, the Brokers will charge a commission fee, the amount of which varies depending on the Broker and of which details can again be found from the brokers’ websites.
Unless there are special promotions, brokerage rates are pretty standard these days. You can go to online comparison sites to check out the latest promotions on brokerage rates offered.
The process is ultimately as simple as these four steps:
- Present the required documents and fill in the required forms (either online or in-person, depending on the Broker.
- Choose the desired form of payment for the settling of trades
- Wire in the money from your local bank, if you wish to use pre-funded accounts. Brokers usually charge lower commissions on trades there.
- Wait for the required documents and forms to be processed.
Once done, you are now ready to purchase your very first shares!
The information provided is for general information purposes only and is not intended to be personalized investment or financial advice.