How to trade stocks in Singapore Exchange?
In order to trade in Singapore Exchange, you need to find a good and reliable remisier or a Dealer’s Respresentative who works in a stock broking house in Singapore. You can buy or sell your stocks in Singapore Exchange from Monday to Friday between 9.00am – 12.30pm and 2.00pm – 5.00pm. See Singapore Exchange Trading Hours.
In Singapore Exchange, shares are mainly traded in board lots of 1000 shares. Board lot trading on the existing Ready Market is maintained for those who wish to continue trading in the designated board lot sizes.
However, the trading of odd lots is also allowed. On April 14, 2003, the Odd Lot Market was replaced with Unit Share Market, which enables the trading of odd lots in any quantity less than one board lot (1000 shares) of the underlying share in the Ready Market. For example, a buy order of 1080 OCBC shares, 1000 shares will be executed on the Ready Market and the remaining 80 shares will be executed on the Unit Share Market. You can amalgamate trades between the Ready and Unit Share markets by having trades executed in the two markets for the same underlying share to be consolidated in a single contract.
The brokerage rates for all transactions on SGX Securities Trading are fully negotiable. So please make sure that you find a good stockbroking firm that could offer you the best brokerage rates. In addition to the brokerage rate, you have to pay CDP (Central Depository Pte Ltd) a clearing fee of 0.04% on the value of the contract, subject to a maximum of SGD$600 (except for structured warrants which is at 0.05% of the contract value subject to a cap of SGD$200), and the prevailing GST (Goods and Services tax) on brokerage and clearing fees.
Once a trade is matched, CDP, through the process of novation (that is the substitution of one party in a contract with another party), becomes a counterparty to each side of the transaction, thus guaranteeing performance of its Clearing Members on both sides of the trade. The settlement of trades executed on Singapore Exchange will take place on the third market day after the trade date T+3 (T being the trade date). When a seller does not have sufficient shares in the account for settlement by 12:00 noon on T+3, CDP will conduct buy-in on that afternoon to fulfil the seller’s delivery obligation.
The starting buy-in price for any security is 2 minimum bids above either the previous day’s closing price or any of the transacted or bid prices in one hour preceding commencement of the buy-in, whichever is higher. The buy-in bid prices will increase by 2 minimum bids from time to time throughout the day until the securities are bought or delivered to CDP. CDP will charge a processing fee of S$75.00 (S$80.25 inclusive of GST) for any failed contract. In addition to that, a brokerage rate of 0.75% will be levied on each buy-in contract.
Why Singapore Exchange Is The Best Place For Foreign Investors To Trade
For foreign investors, there is no dividend tax or withholding tax on dividends paid. However, tax at the prevailing corporate tax rate is deducted from the gross dividends payable. There are no restrictions on the acquisition of securities by foreign investors. Foreign ownership is restricted only in certain companies. There are no limitations on the repatriation of income, capital and capital gains. There is no foreign exchange controls or capital gains tax on the trading of securities by non-residents. There is no restriction on the acquisition of foreign securities by residents but dividends received from abroad are subject to income tax.