What is changing?
Earlier in January this year, Singapore Exchange Regulation (SGX RegCo) opened consultation on proposed rule amendments to facilitate the broader use of broker custody accounts. Among other things, the rule amendments set baseline standards to allow retail investors using broker custody accounts to consistently exercise their shareholder rights.
This move supports greater choice for investors, especially those who might benefit from or prefer the broker custody model, and aligns Singapore's custody framework with that of other major markets. However, how do you know if this proposed model is well suited for you? How is a broker custody account different from CDP Securities account, and what does this mean for you and your investments?
SIAS breaks down the 2 types of accounts for you.
Current System: CDP Account
CDP Securities Account
A CDP (Central Depository) Securities Account is held directly with SGX's Central Depository. When you buy shares, they are registered in your name. This means:
• You appear as the legal shareholder on the company's records.
• You can attend AGMs and vote directly, without needing to go through an intermediary.
• Dividends are credited to your linked bank account via CDP
• You can trade through any CDP-linked broker platform
The CDP platform lets you view your holdings, but all trades must still be executed via a broker.
What is a Broker Custody Account?
Broker Custody Account
A Broker Custody Account is held by your brokerage firm on your behalf. The shares are registered under the broker's name, but you remain the beneficial owner. This means:
• Your broker manages your holdings, trades, dividends, and corporate actions all in one place.
• You can still attend AGMs and vote — your broker facilitates this process.
• Dividends and other distributions are credited to you based on your broker's payment arrangements.
Corporate action communications are also handled by your broker.
Brokers that hold SGX-listed shares and service Singapore investors are regulated by MAS under the Securities and Futures Act 2001. The law requires them to maintain records for all account holders and keep your holdings separate from their own.
Brokers that are SGX’s trading members or depository agents are also subject to the SGX-ST Rules or the CDP Depository Rules, respectively. Proposed amendments to these Rules require these broker members to facilitate investors’ exercise of shareholder rights.
For example, broker members must notify you of elective corporate actions unless you have opted out of such notifications.
To find out whether your broker is an SGX trading member or depository agent, you may refer to the list on SGX’s website.
The Reform
The move towards a wider adoption of the broker custody model does not mean that your CDP account will be abolished. CDP direct accounts will remain available as a custody option for retail investors, to ensure a gradual transition for brokers and investors. The reform simply provides investors with the option to have all their securities, both SGX-listed and foreign-listed, consolidated on the same platform for ease of viewing and management.
Side by Side Comparison
Here is a quick overview of the key differences between the two account types:
| CDP Securities Account | Broker Custody Account | |
|---|---|---|
| Who holds the shares? | You hold shares in your own name, directly with CDP. | Your broker holds shares on your behalf. |
| Ownership visibility | Your name appears on the company's share register. | Your broker's name appears; you are the beneficial owner. |
| Trading | Trade via any CDP-linked broker platform. | Trade through your specific broker's platform. |
| AGM attendance & voting | You can attend and vote directly, without intermediary. | You can still attend and vote – your broker facilitates the process. |
| Dividends & cash distributions | Paid directly to you by the company via CDP. | Credited to you by your broker, based on their payment arrangements. |
| Corporate actions (e.g. rights issues) | Managed through CDP. You will receive direct notifications. | Managed entirely through your broker. Contact them for details. |
| Company communications | Sent directly to you from the issuer or CDP. | Handled by your broker. You can also check sgx.com for announcements. |
| Portfolio visibility | View holdings on the CDP platform. Trading is done via brokers. | View holdings, manage trades, and handle corporate actions all within your broker's platform. |
| Product Offerings | Only SGX-listed securities. | Often offers both SGX-listed securities as well as overseas markets. |
FAQs
Yes. Shares can be transferred either way. To move shares from your CDP account to a custody account, you will need to make a request through your broker, who will then submit the transfer to CDP. Your CDP account remains open unless you choose to close it. Note that your broker may charge a fee for the transfer.
Yes. You can still attend AGMs and vote even if your shares are held with a broker. Your broker will facilitate the process. Be sure to contact them ahead of time to understand their specific procedures and deadlines.
Dividends and other cash distributions will be credited to you by your broker, based on their payment arrangements. Non-cash entitlements will also be credited directly to your custody account. Contact your broker for details on timing and process.
If your shares are in a custody account, your broker will manage all corporate action events, including rights issues and preferential offerings. Please contact your broker for more information.
If your shares are held in a custody account, your broker will handle company communications. You can also check for company announcements directly at investors.sgx.com.
Yes. You can split your holdings across multiple brokers, specifying which shares (and how many) go to each broker. Your brokers will coordinate the transfer with CDP. Contact each broker for their individual instructions.
Yes, you can continue trading during the transfer period. However, before selling, make sure you have the necessary shares in your account to avoid settlement issues. When in doubt, check with your broker on your account status during the transfer.
Most SGX-listed shares and bonds can be held in broker custody accounts. However, Singapore Savings Bonds cannot be held with brokers. Check with your broker to confirm which securities they support.
Shares that are currently out on loan under the SGX SBL programme will not be transferred. This is because legal ownership is temporarily held by the borrower during the loan period. If you wish to transfer loaned shares, you will need to opt out of the SBL programme first. You can write to CDP at asksgx@sgx.com to do so.
Educational Reads
Are Custody Accounts Safe? A Singapore Investor’s Guide to CDP vs Broker Custody
8 mins | By SG Budget Babe
Custody reform at SGX: Investors should be given all relevant information before deciding
5 mins | By Mr David Gerald, Founder, President & CEO, SIAS
Upcoming Events
Stay Tuned...
