StanChart to set minimum fee for online share trading

Currently, the flat fee feature allows investors to pay as little as $1 or $2 for relatively small trades, resulting in StanChart being once touted as the most attractive broker in town.
Currently, the flat fee feature allows investors to pay as little as $1 or $2 for relatively small trades, resulting in StanChart being once touted as the most attractive broker in town.ST FILE PHOTO

From Aug 1, investors will pay about $10 at least for each trade

After five years on the retail stockbroking scene, Standard Chartered is about to drop one of the key features it used to attract investors.

From Aug 1, StanChart's online trading platform will no longer charge a flat percentage rate on trades, with no minimum charge.

That feature allowed investors to pay as little as $1 or $2 for relatively small trades - which meant StanChart was once touted as the most attractive broker in town.

The change from Aug 1 means investors using its online equities trading platform will pay a minimum of about $10 - or the equivalent in other currencies - for each trade, a recent memo to clients said.

This applies to all clients except priority banking customers - those with assets under management of at least $200,000.

Mr Sumeet Bhambri, StanChart's regional head of wealth management for Asean and South Asia, told The Straits Times: "The minimum brokerage amount applicable will be based on the currency of the shares traded in, regardless of the exchange the shares are listed on."

NEW RULES FROM AUG 1

The minimum brokerage amount applicable will be based on the currency of the shares traded in, regardless of the exchange the shares are listed on.

MR SUMEET BHAMBRI, StanChart's regional head of wealth management for Asean and South Asia, on how the brokerage fee will be charged in future

If the share is traded on the Singapore Exchange (SGX) in Hong Kong dollars instead of Singdollars, the minimum fee is HK$100 (S$17.40).

Currently, StanChart is charging investors fees only according to the number of stocks they buy and sell - 0.2 per cent of the trade on SGX, or 0.25 per cent for other markets. The rates are even cheaper for priority banking clients. For instance, for a trade of $1,000 on SGX, a personal banking customer would pay $2.

When StanChart entered the retail stockbroking business in 2011, it made waves for abandoning minimum commissions.

Industry insiders told The Straits Times in 2011 it was unlikely others would follow such "costly" tactics used to break into a new business proposition.

At most brokerages here, retail investors generally pay $25 in brokerage fee per transaction to buy and sell Singapore shares online, regardless of their value.

Asked about the minimum commission introduction, Mr Bhambri said: "Applying minimum brokerage amount is in line with market practice, and we offer one of the most competitive rates in the market for online equities trading. We also continue to offer no custody fees and outstanding services to our clients."

Marketing associate Tay Bo Yi, 25, a user of StanChart's online equities trading platform since he was an undergraduate, was surprised about the change as the zero minimum brokerage fee was "its main attraction".

But he agreed that the new fee is still lower than what other firms charge, adding that he will tweak his trading habits on the platform.

"I'll think twice before I trade small amounts next time as it will cost more to trade... I can't do dollar-cost averaging that much any more. But I'll still continue to use StanChart's platform."

A version of this article appeared in the print edition of The Straits Times on June 11, 2016, with the headline 'StanChart to set minimum fee for online share trading'. Print Edition | Subscribe