Futu is first full-service digital brokerage in S'pore

Futu Singapore, which runs the moomoo online share trading platform, has become the country's first full-service digital brokerage.

The move, which was made official at a ceremony at the Singapore Exchange (SGX) yesterday, will enable Futu to offer execution, settlement, clearing and custodial services to stock and derivatives investors here.

"We'll be able to connect directly with the SGX to clear trades without going through another broker or middleman. This lowers costs for clients," said Futu Singapore managing director Gavin Chia.

Moomoo users will also have the option of holding their securities on the platform free of charge. Traditionally, custodial services are offered by the Central Depository for a fee, Mr Chia said.

All this will give Futu Singapore an edge over its competitors, which include Tiger Brokers, Interactive Brokers and iFast, as well as traditional brokers like Phillip Securities and CGS-CIMB.

But it needs more market liquidity and retail activity to grow.

The SGX, which is known for being the exchange of choice for real estate investment trusts and other high-dividend companies favoured by long-term investors, saw its daily average traded value decline by 8 per cent year on year to $1.2 billion in the first half of 2022, its data showed.

Mr Chia said Futu sees itself playing a role in helping to deepen the secondary market for retail investors in Singapore by tapping its 620,000-strong user base and strength in technology.

In April, it beat other more established brokers to become the main placement agent for the listing of iWow, the home-grown tech firm behind Singapore's TraceTogether tokens.

iWow's management used the moomoo app to engage with a much wider pool of retail investors compared with a traditional initial public offering (IPO) roadshow, in which a company markets new shares to the public.

Mr Chia said: "Companies looking to list need a younger pool of investors to be aware of their product or service. They need to know there is a healthy secondary market before they consider listing. This is where we come in."

The bulk of moomoo's users are aged between 18 and 45.

iWow's IPO, which raised $6.5 million in proceeds, was 4.3 times oversubscribed. Around 1,000 applicants, or 80 per cent of the total, were Futu users. This represents the highest number of subscribers for a Catalist board listing, with the number typically not exceeding 500, according to Futu.

"We played a crucial role in opening up the IPO to a much wider investor base and helping to make the process much more convenient and less exclusive for retail investors," Mr Chia said.

He added that Futu will continue working with companies that have good growth potential and help them list in Singapore. Futu, which launched the moomoo app in Singapore in March last year, is also applying for a licence to provide cryptocurrency-related services here.

Futu is a subsidiary of Nasdaq-listed Chinese brokerage and wealth management services company Futu Holdings, which is backed by Internet giant Tencent.