Tag Archives: Saxo

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.

Global bond ETF in London Stock Exchange

Update 7-Aug-2011: IGLO and IGIL are now available for trading in Saxo since mid-May 2011. The commission is charged in USD, converted from GBP at Saxo prevailing rate.

I posted HERE that I may consider bond ETF in London Stock Exchange following the reduction of Saxo commission from GBP 15 to GBP 8.  But alas, when I asked Saxo to add the following two global bond ETFs, Saxo replied that they were not able to add because these ETFs are traded in multiple currencies (GBP and USD).

When I probed further and informed Saxo that the two ETFs have different stock symbols for different currencies, Saxo replied they still could not add them because they share the same ISIN number on the same exchange.

Ok, let’s try POEMS. I emailed their tech support to add these two ETFs. And on the following day, it was added! So now you can buy the two ETFs in POEMS, just note that the ETFs are traded in GBP and their symbols are:

However, there is a catch: POEMS charges a higher commission (GBP 25) compared to Saxo. Given this, I am undecided whether to use POEMS or not.

Lower commission for stocks traded in London Stock Exchange

I received this email from Saxo last week:

… the minimum commissions charged on stocks traded on the following exchanges will be lower from 1 May 2010:

  • Euronext Amsterdam (AMS) from EUR 20 to EUR 12
  • Euronext Brussels (BRU) from EUR 20 to EUR 12
  • Euronext Lisbon (LISB) from EUR 20 to EUR 12
  • Euronext Paris (PAR) from EUR 20 to EUR 12
  • Frankfurt/Xetra Stock Exchange (FSE) from EUR 20 to EUR 12
  • London International Exchange (LSE_INT) from USD 40 to USD 20
  • London Stock Exchange (LSE_SETS) from GBP 15 to GBP 8
  • Milano Stock Exchange (MIL) from EUR 20 to EUR 12
  • OMX Helsinki (HSE) from EUR 20 to EUR 12
  • Sistema De Interconexion Bursatil Espanol (SIBE) from EUR 20 to EUR 12
  • Swiss Virt-X (VX) from CHF 30 to CHF 18
  • Swiss Exchange (SWX) from CHF 30 to CHF 18
  • Wiener Börse – Vienna Stock Exchange (VIE) from EUR 20 to EUR 12

Saxo Capital Markets will raise the minimum commissions charged on stocks traded on the OMX Copenhagen Stock Exchange (CSE) from DKK 19 to DKK 29.

The reduction of commission for London stock exchange is almost half. Great! Now I only need half of the previous investment amount to achieve the same ‘sales charge’.

With this low commission, I may also consider bond ETF in London stock exchange when I need to add to my global bond asset class. Currently I use unit trust fund for global bond asset class. Below are the global bond ETFs in London stock exchange that I may use:

Dividend withholding tax of LSE-listed ETF in Saxo

UPDATE (Oct 27, 2010): Since April 2010, Saxo has been crediting dividends from London Stock Exchange to my account in full, without the 20% withholding tax.


After I consolidated my ETF holdings to Saxo in June, the first dividend from my ETF in London Stock Exchange was declared in my Saxo account in July. But wait, how come they were taxed at 20%? They were not taxed at all when I held the ETF in POEMS. After I have sent an email to Saxo, the withheld tax was refunded to me before the pay date in August.

 

Round Two

The second dividend was declared in October. Again, it was taxed at 20%! After a few emails to chase for the refund, it was credited into my Saxo account after the pay date.

Transfer Again?

The ETF pays dividend four times a year. It is going to be a pain if I need to email for tax refund for every dividend payout. And if Saxo decides not to refund withholding tax (e.g. change in custodian structure), it may be time to do another account transfer, sigh…

Cash withdrawal and deposit with two brokers

Just to record my experience in cash withdrawal from optionsXpress (OX) and cash deposit to Saxo Capital Markets (Saxo).

Cash Withdrawal from OX

Prologue

Before I requested for withdrawal, I have noticed my name in OX was spelled in the reverse order, so my name on the cheque issued by OX would be different from my UOB bank account name. I am not sure if the bank will accept such cheque.

I wrote to OX to find out how I can change my account name. The reply was to write them request in a letter to change the account name; and to speed up things, I could scan and email the letter. So I wrote the letter, print, sign, scan and finally email to OX. Within a week, the account name was changed according to my request. I was ready to request for a withdrawal by cheque.

Withdrawal

I login to make the request but forgot the 4-digit PIN required on the withdrawal page. I went to the helpedesk chat room to reset my PIN and finally made the withdrawal. Here is the time line:

  • Sep 3: Submitted withdrawal request.
  • A week after Sep 3: Received the USD cheque.
  • Sep 11: Deposited the cheque into the deposit box at UOB bank. Wrote my name, account number and contact number at the back of the cheuqe.
  • Sep 15: Received a receipt by post for the deposit of the USD cheque. 
  • Oct 10: The money is deposited into my SGD savings account. 
  • Few days after Oct 10: I received a credit advice (below) that gave the details of the commission and conversion rate. 
Credit Advice
Cheque amount  USD 74.12
Less: Correspondent bank agent commission USD 15.00
Less: Correspondent bank charges  USD   0.00
Converted @ 1.4760000 SGD 87.26
Less: Handling commission SGD 10.00
Less: Telex charge SGD   0.00
Less: Postage SGD   5.00
Amount credited SGD 72.26

I am OK with the time taken to withdraw and cash in the cheque, but the commissions are just too high.

Cash Deposit to Saxo Capital Markets

  • Day 1: Issued a SGD personal cheque that bears my name on the front surface. Wrote my Saxo account number and login ID on the back of the cheque. Sent the cheque to Saxo by post; attn to my broker.
  • Day 2: My broker SMS me that the cheque was received and would be deposited in two days.
  • Day 4: The money was deposited into my cash account and ready for trading.
Done!

Consolidated my ETF holdings

Last month, as planned in my previous post, I transferred part of my ETF holdings to Saxo. My ETFs are now held in the accounts below.

  • DBS Vickers Securities
    • Vanguard Total Stock Market ETF (US)
    • ABF Pan Asia Bond Index ETF (HK)
  • Saxo Capital Markets Singapore
    • iShares DJ STOXX 50 ETF (UK)
    • Vanguard Total Stock Market ETF (US)
    • Vanguard Emerging Market ETF (US)

I will use Saxo for my subsequent ETF purchase. ETF in DBS Vickers Securities will remain as it is to save transfer fee.

How long did it take to complete the transfer? After I have authorized both parties (one for transfer-out, one for transfer-in), it took about ten working days. Remember to ask both parties for forms and instruction to authorize both parties to do the transfer. The transfer from optionsXpress to Saxo was delayed because I did not know I also need to inform the party who will do the transfer-out of shares.

Consolidating my ETF holdings

My ETFs are held in several broker accounts, as shown below. This is because I have changed broker several times when searching for low cost broker for ETF in US, UK and HK exchanges.

  • DBS Vickers Securities (formerly DBS Vickers Online)
    • Vanguard Total Stock Market ETF (US)
    • ABF Pan Asia Bond Index ETF (HK)
  • POEMS
    • iShares DJ STOXX 50 ETF (UK)
  • optionsXpress
    • Vanguard Total Stock Market ETF (US)
    • Vanguard Emerging Market ETF (US)

Each broker has its disadvantage. DBS Vickers Securities is the only broker I know in Singapore that does not charge custodian fee for US stocks, but its commission is higher than others. optionsXpress, which started its business in Singapore later, charges less commission than DBSVickersOnline, but funding the account is a bit troublesome when I use bank draft from Custom House for its lower foreign exchange spread. Finally, POEMS charges custodian fee and dividend handling fee, though its UK trading commission is lower than others. So, it would be good if there is a broker that is easy to fund and with low commission to hold all my ETFs.

Recently, a friend mentioned consolidating his ETF to Saxo Capital Markets Singapore because of its low commission for UK market, zero custodian fee and zero dividend handling fee. I have explored this option before but put off the idea due to the minimum SGD15,000 requirement to open an account. Later I found out from Saxo customer service that I could transfer in stocks to meet the minimum SGD15,000 requirement. So I decide to consolidate my ETFs to Saxo. The advantages are:

  1. Lower commission than POEMS for UK stocks.
  2. Zero custodian fee and dividend handling fee as compared with POEMS.
  3. Ease of funding: you can fund the account by SGD cheque. Trade done in foreign currency are converted using the current spot rate plus/minus 0.5%. This is close to Custom House rate and lower than banks.

As transferring of stocks from one broker to another incurs fee, I plan to transfer my ETFs only from optionsXpress to get rid of the funding headache, and from POEMS to get rid of the high commission, custodian fee and dividend handling fee. I will leave the ETFs in DBS Vickers Securities because they do not incur on-going custodian fee.

The transfer of my ETFs to Saxo is in progress. I will post update when they are done, so stay tuned.