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The Singapore Exchange Regulation (SGX RegCo) has launched a public consultation to encourage wider use of broker custody accounts for SGX-listed securities, aligning Singapore with practices in markets such as Australia, the UK, Hong Kong and the US. The consultation, open from Jan 30 to Mar 27, proposes rule changes to allow omnibus broker custody accounts, require brokers and depository agents to support shareholders in exercising their rights, and strengthen regulatory oversight of depository agents. Retail investors will still be able to keep direct Central Depository (CDP) accounts even if the changes are implemented.
Currently, investors can hold SGX securities either directly with CDP or through broker custody accounts. About two-thirds of retail accounts are still direct CDP accounts, a structure originally designed for safekeeping physical share certificates. In contrast, broker custody accounts—often omnibus accounts pooling multiple clients’ holdings—are already widely used for foreign-listed shares.
SGX RegCo said adopting a common broker custody model for both SGX-listed and overseas securities would allow investors to view and manage all holdings through a single platform. This could enable brokers to offer more value-added services such as fractional trading, portfolio management, robo-advisory solutions and other innovative products.
Beyond retail benefits, the shift could enhance Singapore’s market competitiveness. Internationally active asset managers, who are accustomed to omnibus structures elsewhere, currently need separate systems to handle Singapore’s individually segregated accounts. A broker custody model would make it easier for them to participate more actively in the local market.
Market participants broadly view the proposals as timely, given rising retail participation. However, investor groups stress the need for strong safeguards, including robust asset segregation, cybersecurity and PDPA compliance, to ensure omnibus arrangements are as secure as CDP holdings and that shareholder rights remain fully protected.
Comments:
I think most consumers dig into where the brokerages are from and fear geo-political risks or bankruptcy might affect their holdings.
CDP is deemed "safer" since it's locally managed.
When you are in retirement phase, it kind of makes sense to store in CDP too. Go get free gifts in AGMs since got time? π
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