Standard Chartered Online Trading

I opened Standard Chartered Bank (SCB) Online Trading in June, with settlement acounts in SGD, HKD, USD, EUR and GBP currency. I waited for another 3 weeks for the W8BEN form to be processed, so that I could start to use the USD settlement account.

The main attraction is that there is no minimum commission for trading in major stock exchanges around the world, so it is very good for small transaction, especially if you want to do monthly contribution into ETF. Read the Brokerage & Market FeesFAQ and this post by hyom. Besides the questions raised n FAQ, I also gathered the following information by calling the online trading hotline at 1800 242 5333 (don’t call the general hotline as the officers are not equipped to answer online trading-related question).

  1. All shares are held in SCB.
  2. No monthly custodian fee.
  3. No dividend handing fee.
There are two other things to note:  currency exchange rates and ETF listed in London Stock Exchange.

Currency exchange rates

I compared SCB currency exchange rates with that of Oanda.com for a random couple of days, see the spreadsheet below (or open the spreadsheet here). As you can see in the last column (Amount % Difference), HKD rate is consistently bad while others fluctuate. I have only transferred money to USD account and did so when the Amount % Difference is in the 0.5–0.6% range.

ETF listed in London Stock Exchange

According to London Stock Exchange (LSE) webpage on  ETF, ETFs attract no stamp duty. The two brokers (POEMS and Saxo) that I have used to purchase ETFs in LSE follow this rule and did not charge stamp duty.

For SCB, you will have to pay the stamp duty of 0.50% on buy trades. I called up SCB, cited the webpage and asked if there was a mistake and whether stamp duty would be refunded if the transaction in LSE was a ETF. SCB said they would call back. Few days later, SCB called me and said all buy trades in LSE will attract stamp duty. Huh?

So how much commission in total (including stamp duty) will I be paying when I use SCB compared to Saxo? See the spreadsheet below or open the spreadsheet here. SCB is more expensive than Saxo when your trading  amount is only slightly over $1000 ($1066.67 to be exact). This means SCB is only cheaper when you trade below $1066.67.

Comments

The ETFs and REIT shares that I use in my portfolio are listed Singapore exchange, US stock exchanges and London stock exchange.

  1. I am inclined to use SCB for transaction in Singapore exchange and US stock exchanges.
  2. I will continue to use Saxo for transaction in London stock exchange.
  3. For currency exchange, I am OK with the hassle of comparing the rate in SCB with Oanda.com each time before initiating the transfer.

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24 responses to “Standard Chartered Online Trading

  1. Hi zm
    Good to know this. Thanks for sharing. What’s your approach to tide over stock market crashes – continue same level of monthly investments, cut loss or increase investments? Any research that suggests the best approach in turbulent times?
    Br
    Ash

  2. Hi choozm,

    momo here again. I think you have highlighted the main (negative) points about SCB Online Trading platform with regards to foreign currency trades. There’s just one more thing I would like to add (which I have mentioned in sgfunds.com), and that is the amount you get in SGD when you SELL your foreign currency holdings. It is going to incur a (really) significant effective “commission”. So I see SCB to be good only for SGD trades.

  3. Sorry choozm, 1 question which I forgot to include in my previous comment, have you done a similar comparison for BUYING SGD (e.g. transferring money from USD settlement account to SGD account?

  4. Hi zm
    Thanks for your article. I have a couple of queries regarding REIT and Fixed income allocation

    Notice from your portfolio, you have the following. My portfolio is 100% equity and hence have thinking of fixed income for a while. I’m worried about the outlook for bonds given the current turmoil fuelled by public debt. Should I be looking at corporate bonds instead and if so, any ETFs you would recommend (i have saxo)

    Global fixed income – 50% iShares Citigroup Global Government Bond (IGLO), 50% iShares Global Inflation-Linked Bond (IGIL).
    Asia fixed income – ABF Pan Asia Bond Index ETF
    SG – SGS Bond Ladder

    On REITs, I’m considering getting into REITs for the yield. Are there REITs for the US, Europe and Singapore that you have considered? I will be interested in commercial, hospitality and healthcare. For SG, I’m considering Suntec and Plife.
    Thanks

  5. Hi Ash,

    For bonds, I won’t use corporate bonds as they sometimes behave like equity. Not the characteristic you want when you want your bonds to be the safe anchor of your portfolio.

    REIT: I use SG REIT stocks only because REITs have high dividend and the return from US REITs will be reduced substantially by the withholding tax. Currently my SG REIT stocks allocation are full, so not looking on Europe/Asia REITS, and also concern on dividend tax.

    For SG REIT stocks, I distribute them evenly among 4 sector Residential/Hospitality, Industrial, Commercial and Healthcare; will not try to guess and over-weigh a particular sector. See my post: https://mamakstallinvestor.wordpress.com/2008/06/17/classification-of-reit/

    Hope this helps.

  6. Thanks ZM
    Which particular REITs are you invested in SGX across the RICH sectors and what is your criteria for investment? I’m considering sector, type of properties and tenants, DPU, gearing – anything else?

    Understand for VTI and for IMEU are not subject to withholding tax – how come there is a withholding tax with US REITs? Thanks again

  7. hi choozm, may I know if you use SRS? and if you do, do you use it to invest in etfs listed on LSE? thanks.

  8. Hi Kate, I don’t use SRS because it does not allow trading of some stocks, for example, non-S$ denominated stocks in SGX (see POEMS FAQ). Also Saxo does not support trading using SRS funds.

  9. Pingback: Portfolio activity, July-August 2011 | The Mamak Stall Investor

  10. Hi choozm,

    I have 2 questions regarding transferring of securities to/from Saxo.

    1. Do you know if it is possible to transfer securities from SCB to Saxo? If so, are there any charges (by SCB I presume)?

    2. For transferring securities out of Saxo, an administrative fee of SGD 50 per ISIN is charged (capped at maximum of SGD 160) .When I pass away, I suppose (please correct me if I’m wrong) my beneficiary has a choice of opening a Saxo account and transferring my securities with Saxo to his account. Do you know if such a transfer will occur any admin fee? This is not Saxo -> Other bank, so perhaps the SGD 50 above does not apply. But maybe there are other fees?

    Thanks,
    momo

    • Hi momo,

      1. I supposed so but you will have to check with both parties for sure.

      2. When one passes away, whether his/her assets in Saxo will be allowed to be transferred or it will be freeze is a question. Again you will have to check with Saxo, and may be a lawyer.

      Cheers.

  11. Were Saxo’s fees raised? I just check and it indicated min GBP 15
    http://sg.saxomarkets.com/trading-products/online-funds/exchange-traded-funds-etf

    Thanks.

  12. Momo, could I ask how to sign up to sgfunds? I tried registering but get the error message that “no anti-bot question answered”. However, I do not see any question or answer section. Have tried contacting the board administrators but the email given is invalid.

    Thanks.

  13. Hi choozm,

    Could you please explain why you used the Bid rate for comparison purposes? I thought we should be using the Ask rate?

    Thank you!

    • Hi Fruitbat52,

      Sorry for my late reply. I have counter-checked the figure with Oanda historical rate and it is correct. I made the mistake of typing ‘Bid’ instead of ‘Ask’. As for SCB rate, I don’t have a way to verify but I have changed the word ‘Bid’ to ‘Ask’.

      Hope this clarifies.

  14. Hi choozm,

    Long time never see you post updates on your portfolio. How are you been?

    With the introduction of SGX-listed CIMB and iShares ETFs trading in SGD currency (but distribution in USD), I have been thinking about these 2 scenarios (although there is a 3rd scenario in Saxo):

    1) CDP: Buy the ETFs through authorized broker, eg DBS Vickers Online, with $18++ commission, receive USD dividend in cheque (can confirm if cheque is correct?), deposit cheque in DBS SGD savings account.

    2) SCB: Buy the ETFs through SCB, with 0.20++% commission, receive USD dividend in USD securities settlement account, transfer (and hence converted to SGD) to SGD account.

    Comparing (1) and (2), SCB wins in terms of commission, but loses in terms of dividend conversion from USD to SGD. However, comparing the fx rates between DBS and SCB, it seems like SCB only loses by about S$2 for every US$1000 dividend (can someone confirm?).

    So it seems like SCB has overall lower costs for transacting these ETFs traded in SGD, what say you?

    • Hi momo,

      For DBS Vickers online, I receive USD dividend into my USD cash account in DBS Vickers online.

      Since DBS Vickers online and scb deposit dividend into USD account, why not buy USD denominated ETF, then you can use dividend to buy new ETF.

  15. I do not know whether it’s just me or if everyone else encountering problems with your blog. It appears as if some of the text in your content are running off the screen. Can somebody else please provide feedback and let me know if this is happening to them too? This could be a problem with my web browser because I’ve had this happen previously.
    Kudos

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