Singapore has been a major financial center in Asia for decades, so trading and investing in stocks makes perfect sense for Singaporeans. Trading stocks in Singapore involves more than just opening an account with an online broker, so keep reading to find out what steps youâ€™ll need to take to begin trading stocks in Singapore.
About the Singapore Stock Exchange (SGX)
With its headquarters in AAA-rated Singapore, the Singapore Stock Exchange (SGX) also has offices in Beijing, Chicago, London, Hong Kong, New York, Mumbai, San Francisco, Shanghai and Tokyo. One of the most liquid stock exchanges in Asia, the SGX is a multi-asset exchange with listings that span the equity, derivatives and fixed-income markets.
The exchange operates under the highest regulatory standards and provides listing, clearing, trading, depository, settlement and data services. Many of the exchangeâ€™s products originate outside of Singapore, including 40% of listed companies and more than 80% of listed bonds.
The SGXâ€™s established regional links and links to European markets make the SGX the most connected international exchange in Asia. It also has the distinction of being the worldâ€™s most liquid exchange for the benchmark indices of India, China, Japan and the Association of Southeast Asian Nations (ASEAN).
The SGX was also awarded â€œBest FX Exchange in Asiaâ€ for the 3rd consecutive year by FX Markets Asia Awards 2020, which was based on votes by major forex and money market professionals. The award was in part given for the exchangeâ€™s Asian FX futures listings and for the liquidity the exchange has provided during the COVID-19 pandemic.
SGX Trading hours
The SGX operates in the Asia/Singapore timezone that is Greenwich Mean Time (GMT) + 8 hours, and it does not observe Daylight Savings Time. The SGX is open Monday through Friday with the schedule listed below:
- 8:30 a.m. to 9 a.m. â€“ Opening routine
- 9 a.m. to 12 p.m. â€“ Morning trading session
- 12 p.m. to 1 p.m. â€“ Midday or lunch break
- 1 p.m. to 5 p.m. â€“ Afternoon trading session
- 5 p.m. – 5:06 p.m. â€“ Closing routine
- 5:06 p.m. – 5:16 p.m. â€“ Extended hours
Trading Stocks in Singapore
Trading stocks in Singapore involves a number of steps before you can actually make a trade and hold stock in your trading account. To trade stocks in Singapore, you must follow the steps listed below:
Step 1: Open an Account with a Singapore Bank.
As one of the most financially developed regions in Asia-Pacific, Singapore is home to some of the region’s largest financial institutions, such as DBS Bank and OCBC. The principal types of bank accounts available to Singapore residents include personal, corporate, merchant and non-resident accounts.
To open a bank account in Singapore, you must submit many of the same documents required for the central depository account listed below. Some large banks like DBS Bank and OCBC also act as stockbrokers in Singapore, so youâ€™ll save yourself the step of opening a brokerage account with a 3rd party if you open an account with one of these banks.
Step 2: Open a Central Depository (CDP) Securities Account.
To be able to trade stocks and other listed securities on the SGX, youâ€™ll first need to open a central depository (CDP) securities account. This account is operated by the SGX and provides the account holder with a depository, clearing and settlement facilities for the equities, fixed-income instruments, futures and other securities that trade on the SGX.
Your brokerage account lets you trade stocks and other securities through your broker, while the CDP securities account allows you to hold the shares you trade directly as an owner of record. CDP securities accounts are available for individuals, for 2 individuals via a joint account and for companies through a corporate account.
Instead of being held with your broker, your CDP securities account automatically takes deposits of and stores all your stocks and bonds purchased on the SGX. Most Singapore brokers also offer clients a custodian or nominee account where they hold a clientâ€™s securities for them. If you deposit your stocks and bonds in a nominee or custodial account, however, you would not automatically be considered a direct shareholder of the company since the shares would be held in the custodianâ€™s name. This may affect your voting privileges.
You can open a CDP securities account online by providing the following information and documents in JPEG, JPG, PNG or PDF formats with a maximum of 5MB per file:
- Primary Support Document: Singapore citizens and permanent residents must present a copy of their National Registration Identity Card (NRIC), Singapore Armed Forces ID or Singapore Police ID with Passport. Malaysian citizens must present a Malaysian Identification card or passport and for other nationalities, a valid passport is required.
- Secondary Support Document: You will also need to present one of the following 3 items:
- Bank statement from any Monetary Authority of Singapore (MAS) licensed bank
- Statement from Central Provident Fund (CPF)
- Statement from the Inland Revenue Authority of Singapore (IRAS)
The secondary document must be current within the last 3 months and contain the account holderâ€™s name and address that must match the primary support document for verification.
- Signature: Scanned or photographed copy of your signature
- Tax Identification Number (TIN): If you have a tax residency status outside of Singapore, youâ€™ll need to present either a TIN from your country/region or a completed IRS Form W-9 if you reside in the United States.
Step 3: Open an Account with a Singapore Broker.
Once youâ€™ve opened your bank and CDP securities accounts, you can open an account with a duly registered and regulated stock broker. For example, DBS Bankâ€™s DBS Vickers Securities subsidiary lets clients trade Singaporean and Malaysian stocks. It also lets you trade stocks listed on the Hong Kong Stock Exchange (HKEX) and other major world exchanges including U.S., Canadian, UK, Japanese and Australian stock exchanges.
While you can typically open a stockbroker account online, you can also open your account by personally visiting your chosen broker. Youâ€™ll generally need to present your local ID if youâ€™re a Singaporean national or a current passport for foreigners, in addition to a bank statement and proof of your address like a utility bill.
Best Online Brokers for Trading in Singapore
Check with any broker you are considering using to get a sense of their fees and trading costs. You should also ask if you can hold your Singapore stocks in your own CDP account or if they will be held in the brokerâ€™s custodian account.
Brokers based in Singapore typically charge a minimum fee for trading local stocks from $5 to $25 per trade. They may also charge variable trading fees that range from 0.08% to 0.28% of the notional amount dealt. You can usually hold stocks in a CDP account if you use these brokers.
Some international online brokers based outside of Singapore, like Interactive Brokers, for example, charge transaction fees without a minimum. They will also generally pass on the SGXâ€™s exchange fees for transacting Singaporean stocks and hold such stocks for you in their custodian account.
According to IG Markets, the SGXâ€™s 30 most actively traded stocks currently make up 17% of its S$815 billion market capitalization. Those top 30 stocks also saw a combined net institutional inflow of more than S$1.38 billion in the 1st 8 months of 2020. Check out Benzingaâ€™s list of the biggest SGX traded gainers and losers in the table below.
Session: Aug 30, 2021 4:00 pm – Aug 31, 2021 3:59 pm
Session: Aug 30, 2021 4:00 pm – Aug 31, 2021 3:59 pm
Is Trading Stocks in Singapore for You?
Opportunities for investing and trading SGX stocks and other equities in Singapore could be a great way to diversify your savings and other investments. In addition to having access to some of the best quality Asian stocks, you can also trade stocks and derivatives on other world exchanges depending on which broker you select and your available trading capital.
Stocks and bonds have traditionally performed better than many other investments, and they are definitely worth considering putting your money into if you live in Singapore. As one of the largest financial centers in the Asia-Pacific region, Singapore can offer many opportunities to the savvy investor or trader.
Frequently Asked Questions
Can international investors buy stocks in Singapore?
Singapore allows foreign investors to buy stocks.
What is the minimum I need to purchase stocks in Singapore?
A minimum amount of $2,000 is sufficient to begin.
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