Margin Trading Account

Frequently Asked Questions

What is the minimum requirement to open a Margin Trading Account (MTA)?
The minimum collateral required is S$10,000 in the form of cash or securities. The credit line granted will be a multiple of the collateral deposited. A credit limit of 3 times will be granted for cash collateral and a credit limit of 2 times will be granted for securities collateral. For example, if you deposit cash of S$10,000, you will enjoy a credit line of S$30,000.

How do I apply for a MTA?
Simply fill up the Margin Trading Account Application Form, Memorandum of Deposit/Charge (both SGX and/or Bursa Malaysia), Risk Disclosure Acknowledgement Letter and also sign a copy of the Letter of Acceptance which must be mailed back to us. If you need assistance to complete the documents, you may visit DBS Vickers Office at 8 Cross Street #02-01 PWC Building, Singapore 048424. Please note that a DBS Vickers Nominees Account with Hwang DBS will have to be opened to trade Bursa Malaysia shares.

How long does it take to transfer my Malaysian shares to the MTA?
For shares held in DBS Vickers Nominees Account, it will take 3 working days. Shares custodised with other Malaysian Brokers or custodians will take at least 10 working days (depending on the Malaysian Brokers).

Are there any charges for transferring my Malaysian shares to the MTA?
Yes, there will be a charge of RM10 or $5 per counter.

How long does it take to open a Nominees Account? And are there any charges involved?
It will take 3 working days to open a Nominees Account and there will be a MCD charge of RM10 or $5 to open an account.

What is a margin percentage?
Margin percentage = Equity / Debit Balance

Equity refers to securities collateral value + traded securities value + outstanding buy value - outstanding sell value

Debit Balance refers to the financed amount - cash collateral value + outstanding buy value - outstanding sell value + interest charged

Example:

Cash collateral = $150,000
Securities collateral = $100,000
Margin line available =
(3 x $150,000) + (2 x $100,000) = $650,000
Margin % = ($100,000 + $650,000) ($650,000 - $150,000) = 150%

The market value of the share collateral (Singapore Dollar equivalent) is also based on the marginable securities list valuation.

What is the maintenance margin?
It is the minimum margin you have to maintain before you can buy any securities under the securities margin account. The maintenance margin percentage is set at 150%.

What is a margin call?
A margin call occurs when your margin percentage falls below 140%. You will have 2 days to top-up the account by depositing cash or securities or by liquidating some of your securities. If you fail to top-up by the second day, we will liquidate some counters to raise the margin percentage. When the margin percentage falls below 130%, SGX requires the company to liquidate your margin securities immediately to bring the margin percentage to at least 140%. The company reserves the right to do so without prior notice.

Can I trade in counters quoted in foreign currencies, like Datacraft?
Yes, as long as they are marginable. All trades will be valued in Singapore Dollars.

What are the counters I can trade in using my securities margin account?
The counters you can trade in are prescribed in our marginable securities list, a copy of which can be made available to you.

Can I margin in warrants, rights, or bonds?
You can trade in warrants as long as they are marginable securities. Your purchase of a single warrant should not result in this warrant being more than 40% of your total equity. If your single warrant holding exceeds 40%, you have to reduce this warrant holding by liquidating the warrant or depositing additional collateral. The margin facility cannot be used to trade in rights or bonds.

Is interest paid in my securities margin account?
Yes, interest is paid on your credit balance.

Can I withdraw cash from my securities margin account?
Yes, you may withdraw cash arising from sales proceeds or trading profits provided the withdrawal does not result in the margin percentage falling below 150%.

What is the procedure to withdraw cash/securities?
You are required to submit a cash/share withdrawal form (copies of which are made available to you).

How long does it take to transfer my financing?
It depends on your margin ratio, types of securities and if any securities are still outstanding (not due yet). If everything is in order, it would take about 2 days after confirmation with the other broking firm/bank.

What is the procedure to transfer my financing?
You are required to sign a redemption loan form (copies of which can be made available to you) or submit a letter requesting to refinance your margin position. This letter has to be forwarded to the other broking firm/bank, and a copy to the company. The company will then liaise with the other broking firm/bank direct.

Will my margin percentage be affected by foreign exchange fluctuations if I have pledged Malaysian shares collateral?
Yes, all your margin percentage will be affected by foreign exchange fluctuations as all shares in the MTA will be valued by Singapore Dollars.

Can I top up my cash collateral using RM cheques?
Yes, you may as we are able to accept RM cheques drawn in Kuala Lumpur and Johore only. Note that the amount will be auto-converted to Singapore Dollars using the prevailing exchange rate.