Trading Without A CDP Account – Is It Possible?

There are many technical terms in investing. Some of them may be specific to Singapore, such as the ‘CDP account’.

Furthermore, you may even have heard conflicting answers on having it as a requirement to trade!

Here’s what you need to know:

What is a CDP account?

A Central Depository (CDP) account is an account operated by the Singapore Stock Exchange (SGX). The CDP account acts like a safe where you keep all of your SGX-traded investments, including stocks and Singapore Savings Bonds.

When you make an investment, funds from your CDP-linked bank account will be deducted, and the investment is deposited in your CDP account.

There are a few brokerages that you can link to your CDP account, including:

1. FSMOne
2. POEMS
3. DBS Vickers

This means that any stocks that you buy with a CDP broker will be included in your centralised CDP account.

Even if you buy the same stock (e.g. DBS) with 2 different brokers (e.g. FSMOne and POEMS), both stocks will still be inside your CDP account.

This is different from a custodian account, where you do not own the investments as they are held in your broker’s name.

For example, let’s say you are buying 100 shares of UOB via Tiger Brokers, which is a custodian account.

UOB’s share register would record Tiger Brokers as the investor, instead of you. However, Tiger Brokers’ books would record that these 100 shares are held on your behalf. If UOB declares dividends, UOB will distribute them to Tiger Brokers, and not directly to you.

If you receive any investment proceeds when you sell your stocks from a CDP broker, they will be deposited in your CDP-linked bank account too.

Can I trade without a CDP account?

As a general rule, you are able to trade without a CDP account if you are using a broker that operates on a custodial basis. This means that the broker will own the shares that you have on their platform, which is different from a CDP account, where you have full ownership of your shares.

When you are trading on the SGX, you can choose to either trade using a custodian account or a CDP account.

However, this only applies if you are intending to buy stocks on the SGX. If you are looking to trade international stocks, you can only do so on a custodial basis.

The CDP Account is operated by SGX, and you are only able to trade SGX stocks with this account.

If you want to trade international stocks, you are still able to use a CDP broker to buy these stocks. However, any stocks that you buy will be under the custody of the broker.

Can my CDP account hold US stocks?

Your CDP account is only suitable for stocks that are listed on the Singapore Stock Exchange (SGX), and not for stocks that are listed on the US exchanges such as the NYSE or NASDAQ. As such, you are unable to trade US stocks using a CDP account.

What brokers can I use if I do not want to trade with a CDP account?

Here is a list of non-CDP brokers which you can use to trade stocks on the SGX on a custodial basis:

1. moomoo
2. Tiger Brokers
3. Interactive Brokers
4. Saxo
5. Standard Chartered
6. FSMOne

Do I need a CDP account to trade with DBS Vickers?

You will need to open a CDP account and link it to DBS Vickers if you wish to trade SGX stocks on the platform. However, if you intend to buy international stocks and not SGX stocks on DBS Vickers, it is not necessary to open a CDP account.

It was mentioned on DBS Vickers’ website that you will need a CDP account if you wish to trade SGX stocks.

However, since the CDP account is only required for SGX stocks, you are still able to trade international stocks such as those from the US and London Stock Exchange (LSE).

The fees charged by DBS Vickers for buying international stocks are quite high, compared to some of the other brokers.

Other ways to buy SGX stocks without a CDP account

If you want to buy SGX stocks without a CDP account, it is still possible to do so. Although you need a CDP account if you want to use either a Cash or Cash Upfront account for DBS Vickers, it is not required for other brokers.

An example is the UTRADE Plus Account by UOB Kay Hian.

You are also able to buy SGX stocks without a CDP account by using a Regular Savings Plan instead, including:

1. OCBC BCIP
2. DBS / POSB Invest Saver
3. POEMS Share Builders Plan
4. FSMOne ETF RSP

These can be something to consider if you only have a small amount of money to invest every month. Nevertheless, it will still help you to dollar cost average into the stock or ETF of your choice.

Do I need a CDP account to trade with Interactive Brokers, Tiger Brokers, moomoo or Saxo?

Interactive Brokers, Tiger Brokers, moomoo and Saxo are all custodial brokerage platforms, and you are unable to link your CDP account to these platforms. All stocks (including those on the SGX) that you purchase with these brokers will be stored under their custody, and you can’t transfer them to your CDP account.

For these 4 brokers, you do not need a CDP account to trade any stocks. This is because they are all custodial platforms, where the stocks that you buy or sell will be under the platform’s name, instead of your name.

The fees that these brokers charge are usually lower compared to CDP brokers, so you may want to use them to trade international stocks.

Conclusion

If you wish to trade on the Singapore Exchange (SGX), you can choose between investing in either a CDP or custodian broker.

However, if you want to trade in other markets apart from the SGX, you do need to use a CDP account!

👉🏻 Referral Deals

If you are interested in signing up for any of the products mentioned above, you can check them out below!

Tiger Brokers Referral (Free AAPL Share and 60 Commission-Free Trades)

If you sign up for a Tiger Brokers account using my referral link, you will be eligible for some rewards. You can view and claim your rewards by going to ‘Me → Promotions & Rewards‘.

Here are 3 bonuses that you can receive:

#1 Registration Reward

When you register for a Tiger Brokers Account, you will receive 500 Tiger Coins.

These Tiger Coins can be used to redeem a variety of rewards, such as:

1. Stock vouchers
2. Commission-free trades
3. Reuters videos

#2 Account Opening Reward

After successfully opening your account, you will receive 60 commission-free trades that you need to use within 180 days.

These commission free trades can be used for:

1. US stocks
2. HK stocks
3. Singapore stocks
4. Australia stocks

On top of that, you will receive 5 commission-free trades for futures within 30 days.

You will still need to pay the commission first. The commission should be refunded to you on the next working day.

#3 Funding Reward

If you fund at least $2,000 SGD into your Tiger Brokers account for your very first deposit, you will receive a free Apple (AAPL) share.

The shares will be added into your account within 10 working days.

On top of that, you will receive a stock voucher (SGD5) for SGX stocks only.

You can view the terms and conditions of this promotion on Tiger Brokers’ website.

moomoo Referral ($200 Stock Cash Coupon Bundle, AAPL Shares and Commission Free Trades for 180 Days)

If you are interested in signing up for a moomoo (powered by FUTU SG) account, you can use my referral link.

Here are some of the rewards you can receive (From 2 Oct 2021):

1. Commission-free trading for 180 days (SGX, HKEX and US markets)
2. $200 or $2,000 Stock Cash Coupon Bundle (First Deposit Reward)
3. Apple share and iPhone 13 (First Transfer-In Rewards)

To receive these bonuses, here are the steps you’ll need to do:

#1 Sign up for a Moomoo account

You’ll need to use my referral link to sign up for a moomoo (powered by FUTU SG) account.

Once you have successfully opened a FUTU SG Securities Account, you will receive:

1. 180 days unlimited commission-free trading for the US, HK & SG stock market (to be activated within 90 days)
2. Lvl 2 US stock Market Data
3. Lvl 1 SG stock Market Data
4. Lvl 1 China A-Shares Market Data

First Deposit Reward

You will be able to receive a Stock Cash Coupon Bundle, depending on the amount that you deposit for your very first deposit:

S$ 2,700 – S$ 199,999	$200 Stock Cash Coupon Bundle
≥ S$ 200,000	$2,000 Stock Cash Coupon Bundle

First Transfer-In Reward (US & HK stocks only)

If you transfer your US or HK stocks from another brokerage account to moomoo, you will be able to receive some rewards:

SGD 50,000 – SGD 99,999	1 Free Apple (AAPL) share
SGD 100,000 – SGD 199,999	2 Free Apple (AAPL) shares
≥ SGD 200,000**	1 iPhone 13 (256GB; first 50 sets) OR 3 Free Apple (AAPL) shares

To learn more, you can view more about this promotion on the FUTU SG website.

POEMS Referral (Free US trades for 1 month)

If you are interested in signing up for a POEMS account, you can use my referral link. You will be able to receive free US trades for one month after you deposit SGD $3,000 into POEMS!

Here’s what you need to do:

1. Sign up for a POEMS Cash Plus Account
2. Deposit ≥ SGD $3,000 into your Cash Plus Account within 1 week of opening your account
3. Enjoy 1 month worth of free US trades

FSMOne Referral

If you would like to create an FSMOne account, you can enter my account number ‘P0381515‘ into the referral code field.

I will receive 1,000 reward points for referring you. Although you do not receive any benefits, I would appreciate your support!

Are you passionate about personal finance and want to earn some flexible income?