KGI Fraser Securities has started a platform that allows investors here to buy and sell contracts for difference (CFDs).
CFDs are contracts that allow traders to bet on the direction of highly liquid shares, currencies and commodities using leverage, meaning they do not need to put up a large amount of capital upfront.
The new KGI Contrax platform that opened yesterday takes no commission but traders pay a wider spread between bid and ask prices that is reflected upfront and which covers the transaction cost.
KGI Contrax is powered by Ayondo, a Germany-based social trading platform which lets investors copy the trades of leading day-traders. These traders, in turn, get a cut of the fees from investors who follow their deals. Restrictions in Singapore prevent the marketing of social trading services, although investors can open accounts with firms that offer the service overseas.
KGI Fraser and Ayondo believe that it is only a matter of time before regulations on the use of new technologies in financial services are formulated. "Being a newcomer in a very established product (CFDs) in Singapore, we're taking a slightly different approach," said KGI Asia chief operating officer Matthew Wong during the platform's launch yesterday.
"Imagine if, within regulation, we could (offer investors to) follow some of the remisiers they choose... then suddenly from dormant they might become active customers again."
Ayondo has a global customer base of more than 110,000, most of them in Europe. Last month, 3.3 million transactions were executed on Ayondo, which counts the German blue chip DAX 30 as its most popularly traded index.
"Although we have 1,700 top traders on the platform, in 2014 the top 10 most popular traders probably had 60 to 70 per cent of the money following them," said Ayondo chief executive Robert Lempka.
Ayondo opened its first office outside of Europe in Singapore last year, and the tie-up with KGI Fraser is its first major partnership here.