I came across this article by the Fifth Person: “How to open a brokerage account in Singapore (and how to choose the right broker)” (read here).
“I’ll assume you plan on trading in the local stock market since you’re to looking to open a brokerage account in Singapore. But besides the SGX, you may also be interested in stocks listed in foreign markets like Malaysia, Indonesia, Thailand, Hong Kong, the U.S., etc. If that is the case, you probably want to check if a broker offers you access to the markets you want.
Do note that foreign shares are not held in your CDP account, instead they’re held in a nominee account with your broker. Most local brokers charge S$2 per month per counter for foreign stocks. This can add up to quite a bit if you invest quite a bit overseas (in which case you may prefer to go direct to a foreign broker to save on fees).
Basically, I do trade US and Hong Kong listed stocks using the local (Singapore) brokers here. And yes, they do charge approx. $2 per counter (UOB KH’s rate is $2 per counter per month while Phillips Securities’ rate is S$2.14 per counter per month).
Hence, I did a quick application and checked online with some of the overseas brokers.
Basically, I do understand that Interactive Brokers, have this policy for minimum monthly activity fee requirement (if you do not meet the min. monthly trading quota, fees will be imposed, unless you have more than 100,000 USD in equity in your account).
If you don’t trade for any given month, the fee would be USD 10 (eg. USD 10 – commissions).
For Interactive Broker – read here.
In the case of Saxo Capital, no fees are charged for holding an account with Saxo, unless the account has been inactive for a prolonged period of time, in which an inactivity fee applies.
For Saxo – read here.
This ‘inactivity fee’ requirement is a big deal to me as a passive investor, as I am basically a buy and hold investor. And for some counters, I do hold them for many years.
Or put it in another way, I do not like to be compelled to trade (due to inactivity fees). If there are no good reasons to buy or sell, then why should I do any trades?
Fees imposed for having stocks in a Nominee Account: Is it such a big deal?
Yes, the fee amount involved may not be big ($2 per counter per month). Especially given that most people don’t hold their stocks for long and they don’t really have that many counters.
For instance, to hold a counter for 10 years, it would probably cost me only $240 ($2 x 12 x 10), provided that the rate did not change in the future. I do doubt that the rates won’t change within 10 years. How much it would change, I have no idea.
From another angle, this amount ($240) would probably be lower than the unrealised values of the stock holding daily fluctuations.
However, being the ‘cheapskate’ that I am, there is this nagging feeling as to why I need to pay for this inactivity fee (no matter how small the amount is).
On further inquiry, I noticed that OptionXpress and TD Ameritrade do not have such inactivity fee requirements.
More on the above-mentioned brokers later.
Most of the US brokers require a min. funding to open an account. For instance, Interactive Brokers require a min. deposit of USD 10,000 (read here). Similarly, for OptionXpress, they require a min. deposit of USD 10,000 (read here).
I did notice that TD Ameritrade (read here) does not have a min. deposit requirement.
Now, I am quite concerned about the initial wiring of USD 10,000 to an overseas US bank account. USD 10,000 is not a small amount to me. And then there is the fee involved to wire money (which makes the purpose of eliminating holding fees with a local broker kind of pointless).
For item 1: TD Ameritrade (US brokerage). When I tried applying online, I was directed to the TD Ameritrade (Singapore brokerage) upon partial completion of the application, and after I stated that I am a non-US Citizen not residing in the US.
This got me curious again. Would there be holding fees (eg. the US stocks are held in a nominee account) should I trade via the TD Ameritrade (Singapore brokerage). Upon inquiry with the Singapore branch, I was told that there is no holding fee. See below reply.
So currently, I am in the process of applying for an account with TD Ameritrade Singapore.
For item 2: OptionXpress (US brokerage). I tried applying online, and enquired via their online chat. I was informed that they have stopped accepting new applicants until the ongoing company integration is completed. I was not informed when this integration will be completed (despite asking).
“Do you open accounts for people outside the U.S.?
I think many like OptionXpress due to their low fees. Anyway, for the time being, I wasn’t able to open an account.
For item 3: Phillips Securities (Hong Kong brokerage). I have a Phillips Securities Singapore brokerage account. However, Phillips Securities Singapore and Phillips Securities Hong Kong are two different entities.
I was informed of the below by the Hong Kong branch for opening an account to trade Hong Kong stocks.
(i) *a cheque of HKD10,000 issued by authorized bank in Hong Kong; (A crossed Personal cheque of HK$ 10,000. Please make the cheque payable to “PHILLIP SECURITIES (HK) LTD”.) which can be drawn on a Local Bank. Deposit can be used for stock trading and is refundable when close account.
*The cheque or document bearing client’s full name and signature must be the same on the Account Opening Form.
Currently, I am still trying to understand through them what they meant by item (d)(ii). I wonder if a certified true copy of passport would work (which is basically a repeat of item (a)).
You should use 8 securities. Able yo trade both US anf HK stocks.
Keep in mind all HK brokers charge a dividend fees. No dividend fees for us stocks by 8 securities.
Another alternative, Standard Chartered Online Trading.
Thank you Green Cow, will check it out.
Hello Sir, I am from Indonesia, and would like to trade Hong Kong and US stocks from Singapore SSecurities comapnies. I am not Singapore Resident nor Citizen.
PLEASE kindly advise me which securities can do , I choose Singapore, because it is nearer to my resident in Jakarta.
did you check Interactive Broker or Saxo Bank?
Nope, I just read about them. Did not apply for an Account with them.