How To: Open a Brokerage Account
We are glad you made it here as it shows you are getting ever closer to buying your first share! Now, 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), a.k.a a CDP Account. The CDP is basically a place where all the shares you have bought in the local stock market are ‘kept’. 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.
Okay, so now that you have set up your CDP Account (no worries, we will wait), let us move on to setting up a Brokerage Account. A Brokerage Account is essentially an account you have with a Brokerage Firm that allows you to buy and sell shares, either through online trading or by making phone calls to Remisers and/or Dealers. It is worth noting that you can have multiple Brokerage Accounts with different Brokers but you only require one CDP Account.
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. Please do bear in mind as well 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.
The process is ultimately as simple as presenting the required documents, filling in the required forms (either online or in person, depending on the Broker), choosing the desired form of payment for settling of trades and then waiting for the required documents and forms to be processed (which can take up to a few weeks). Get those 4 simple steps done and Voila! You have now managed to get your Brokerage Account set up and are now ready to purchase your very first shares!