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Standard Chartered to close equities business – what now?
By Derek  •  January 13, 2015
I have set up a poll here and will run till end of the month. This will give everyone sufficient time to decide if they want to continue with SCB trading account. Lets see what kind of results we will get.
Update from SCB CSO - 12 Jan 2015 A SCB representative called me today and assured me that my trading account will not be affected. However when asked about the future, he is unable to give the same assurance. I will not close down my SCB account trading because I still have some shares and I do not see a need to sell them but I will no longer be using their brokerage for local stocks. Their commission may be cheaper but I like the assurance that my shares are safe in CDP and will not be held ransom by any single brokerage. In addition, when it comes to rights issue, DRP etc, SCB has a shorter timeline. How about the rest? Will you continue to use SCB trading account?
Update from SCB Facebook - 8 Jan 2015 http://forums.hardwarezone.com.sg/stocks-shares-indices-92/standard-chartered-only-online-trading-town-no-minimum-commission-3265890-197.html
HONG KONG: Standard Chartered Bank will close its equities business worldwide, reported Reuters on Wednesday (Jan 8), citing an internal memo. Read the full article here. I am not surprise by the news but I am a little annoyed that Standard Chartered could have inform me earlier. I told my colleague and he was very surprised too, because just last week a staff from SCB was still asking his wife to sign up for a trading account. The big question in everybody's mind is what will happen to our shares? I am pretty sure we will get back our shares but how? Will they transfer to CDP? What about shares in other markets - will they force sell it at the privileging price, give us a dateline to sell or find another broker to transfer to? Cost is going to be another important issue. Coincidentally, the news come just when SGX board lot size reduction will come into effect in a week or so time. It will be interesting to see what is SCB next step. Are there any SCB trading account holders who want to share their concerns?
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By Derek
Derek is an investor who follows Peter Lynch style of investing. He prefers to use simple and straight forward information for stock analysis. He started TheFinance.sg with the intention to bring together all bloggers and professionals who are interested or already in the area of Finance and Investing, and to create a community where everyone is free to write and to share their articles, experience and opinions.
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28 Comments

28 responses to “Standard Chartered to close equities business – what now?”

  1. BC says:

    “HONG KONG: Standard Chartered Bank will exit the institutional cash equities, equity research and Equities Capital Market (ECM) “with immediate effect”, a Singapore-based spokesperson told Channel NewsAsia on Wednesday (Jan 8).”

    How this impact retail investor like you and me? Thought will exit “institutional cash equities”?

    • Derek Lim says:

      Hi BC,

      My first thought is institutional and retail investors are different so it will not affect me but after further thought, institutional cash equities should be their main income generator. If they cannot even sustain that, what more can be said for retail investors?

      I have dropped them a email but please share if you have updates too ya.

  2. Phileas says:

    definitely not happy to see this with the uncertainties ahead. and by doing this, the bank’s credit drops.

    • Derek Lim says:

      Hi Phileas,

      I don’t think the bank credit rating will drop but I will definitely think twice when opening a trading account that has a very low brokerage fee.

  3. Kevin L. says:

    Annoyed that it was a sudden decision, catching even the staff themselves by surprise. Immediate concerns are same as yours for sure.

    “We came in this morning and were told the equity business was being shut down,” a woman who identified herself as an ex-employee at the bank’s offices in Singapore’s business district told Reuters.

    • Derek Lim says:

      Hi Kevin,

      As an established bank, I would think that their PR skills could be better. Nobody like to be caught by surprise especially when dealing with money.

  4. LP says:

    Hey Derek,

    Why not drop them an email or call them to clarify? I’m sure a lot of readers who signed up for the scb brokerage will be very interested. But I’ve a feeling the staff might not know too.. Perhaps just wait for more light to be shed.

    • Derek Lim says:

      Hi LP,

      I don’t have a good experience in trying to call the online trading team for assistance. I has a problem in buying US stocks one night but I could not find a direct number to call them, and had to go through the online banking support team. The online banking support team has limited access and have to transfer me to the brokerage team but since it is already after office hours, I have to wait till the next working day. I did not kick up a fuss since the amount is small.

      I have email SCB and their automated reply system state that they will get in touch with me within two working days. We will probably also have a clearer picture from the media in the next few days.

  5. shawn says:

    no wonder the customer service person gave me a strange look when I went to reset my SCB share trading account password.

    While waiting, although not long, for about 7~9 mins, with 1 queue number away, I saw 2 SCB staffs talking at the Financial service counter. When my number was called, the 2 staffs shifted to the next cubicle and continue their conversation.

    what a time to lay off staff and close down the equity arm.

    just my observation.

    • Derek Lim says:

      Hi Shawn,

      Fortunately, you can still reset your account, image the CSO tell you that they can’t reset your account because their equity arm has closed. You will have given them a “stranger” look.

  6. RetailTrader says:

    Yeah I know how it feels like. I don’t use SCB’s brokerage services, but I live everyday in some fear of my broker going under or something.

    • Derek Lim says:

      Hi RetaiTrader,

      I believe you must be referring to stocks not kept in CDP? How do you mitigate your fear? Find a trust worthy broker with a track record or are there some form of government guarantee or insurance?

      • RetailTrader says:

        Hi Derek

        Yup, I trade CFDs which are derivatives. It’s pretty much a leap of faith using one of those brokers. At the very start I think we should only use brokerages that are regulated by MAS – I think MAS does require brokers to set aside some money for contingencies but I’m not sure if our entire capital placed with the broker will be protected (does anyone know more about this?). One extra measure I take is I have automated news searches on the broker that I use to sniff out anything fishy going on with them. We all know what happened to MF Global!

  7. GoogirlInvestor says:

    I just opened my SCB trading account last month and was about to start trading when the news broke. For now, I think I’ll just wait and see as my purpose was to use it to buy overseas stocks so I may have to go with other brokers instead.

    • Derek Lim says:

      Hi GoogirlInvestor,

      Same here. I’m looking for an alternative for overseas stocks. I read that OptionsXpress have very competitive rates or do you have any recommendations?

  8. GoogirlInvestor says:

    Hi Derek,

    I was looking to trade LSE stocks so my options are either Philip Securities or Saxo Capital. I’m leaning towards Saxo as it’s an online platform rather than Philip Securities which is broker assisted. I’m using cash account and not trading in CFDs. US stocks trading hours are hard to follow since we are following so many other markets. I heard from ACCICB that OptionsExpress is only for US stocks though? He was telling me that TD Ameritrade stopped offering their services to SG clients and he was saying it could be some cross border tax issues. I find this website quite useful though: https://the-international-investor.com/international-stockbroker-list/singapore-stock-broker-list

    • Derek Lim says:

      Hi GoogirlInvestor,

      I think you are right. I can’t find much info on other markets and thanks for the link. It will be helpful if I decide to change brokers.

    • Serendib says:

      I’ve tried both OX and Saxo. OX is very user friendly and they have a local office, but limited to US securities. Tried Saxo, which is decent and also has a local office, but their commissions and fx rates were not very competitive. So I’ve recenty migrated to Interactive Brokers – very powerful platform, low commissions and you can fund in SGD via FAST (so no bank charges) and great FX rates. Downside is its a pain to setup, not very user friendly for beginners and there’s a fee unless you trade every month or have more than $100k (?). Customer service is good though.

  9. Derek Lim says:

    Hi Serendib,

    Thanks for the confirmation. It would seem that for people like me who buy overseas stocks infrequently, it will be quite a challenge to find a broker that has competitive rates.

  10. Sash says:

    Hi, is it really closed in Singapore too? There’s still info on equity trading on SCB’s website. Has anyone trading with SCB been affected in any way? Do share updates if you’ve any; thanks!

  11. Eric Lim says:

    So 8 months later…nothing happened in the end right? Business as usual for the online equity trading?

  12. Mildred says:

    Came across this thread while searching on SC’s equities acct.. I am planning to open it tomorrow actually, mainly attracted by the low fees. i’m a little worried that SIngapore will face the same fate sooner or later. Don’t want to be inconvenienced by the transfer of shares should Singapore SC really closes its equities..

    • Derek Lim says:

      Hi Mildred,

      I think when that happens, Standard Chartered will probably do the transfer for free or at a steep discount. MAS will never allow them to close down and vanish with our shares, unless of course SC file for bankruptcy.

      If you are those who purchase shares in thousands of dollars, you will be better off using a non-custodian broker as the transaction fee will be very small.

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