Securities Dealing Practices & Skills

Before a customer can trade SGX-listed securities, a Trading Account is opened with an SGX-ST Trading Member (the broker) and a securities account is used to hold the scripless shares. Singapore-listed securities are immobilised/scripless — there are no physical share certificates; ownership is recorded electronically at The Central Depository (Pte) Limited (CDP), a subsidiary of SGX.

A customer may hold securities either in a CDP Direct Securities Account (registered in the individual's own name with CDP) or in a sub-account held through a Depository Agent (a custodian/bank/broker holds the securities on the customer's behalf under a nominee/custodian arrangement). In a Direct Account the customer is the direct holder of record; in a custodian sub-account the securities are held in the name of the Depository Agent for the beneficial owner.

Account opening requires KYC/CDD consistent with the SFA and MAS AML/CFT notices: verify the customer's identity, obtain a specimen signature/identification, assess suitability and risk, screen against sanctions lists and for PEP status, and understand the source of funds. Firms must not open anonymous or fictitious-name accounts, must keep records, and must file suspicious transaction reports where warranted.

The broker gives the customer its terms and the applicable risk disclosure documents at account opening, and keeps customer information current. The risk warning statement is a separate and narrower requirement. It is the statement in Annex 4 of MAS Notice SFA 04-N12, it applies to overseas-listed investment products, and it must be given and acknowledged before the customer transacts in such a product for the first time, not merely at account opening.

A cash account requires the customer to pay for a purchase in full by the settlement due date and to have the securities available for a sale. SGX cash-market settlement runs on a T+2 basis (two business days after trade date, since the move from T+3 in December 2018).

Contra trading lets a customer offset an open position with an opposite trade in the same counter before the settlement due date, so that only the is settled instead of full payment/delivery. Buying then selling the same shares before due date at a higher price yields a ; selling lower yields a . The customer never has to fund the full purchase or deliver the shares — only the profit or loss (net of commission, clearing fee and GST) is paid or received. If a bought position is neither paid nor contra'd by the due date, the broker may and the customer bears any shortfall.