Your Guide to the SGX Central Depositary (CDP) Account

A Beginner's Blueprint to Unlocking the Gateway to Singapore's Stock Market 

Opening an account with the Singapore Exchange's Central Depository (CDP) is a foundational step for anyone interested in navigating the Singapore stock market. Think of your CDP account as your passport into a comprehensive system designed for the secure holding and handling of securities.

This blog post is crafted to serve as an in-depth guide, illuminating the path to understanding and leveraging CDP accounts for your investment endeavors.

What Is An SGX CDP Account?

An SGX CDP account acts as a safe keeper for the shares and securities you own in the Singapore stock market. It's akin to a vault where your investments are securely stored.

This account is pivotal for investors, facilitating the custody and management of securities. It ensures that your holdings are well-documented and securely managed.

Opening an SGX CDP account is akin to receiving a key to a vast array of investor privileges. These include the right to attend Annual General Meetings (AGMs), vote on critical matters, and receive comprehensive annual reports on your investments.

Beyond stocks, CDP account holders can diversify their portfolios by purchasing government securities like Treasury bills (T-bills) and Singapore Savings Bonds (SSBs), broadening their investment horizon.

Opening an SGX CDP Account

Opening an SGX CDP account is a straightforward process designed with both ease and security in mind. The emphasis on identification documents ensures that your investments are always secure under your name. Following these simple steps will lead to the creation of your account, after which you can embark on your trading journey with confidence. Here's how you can set up your SGX CDP account:

Step 1: Register Online

The SGX website will provide you with two sign-up options for your CDP account: one for Singaporeans and PR via Myinfo, and an Others method for non-residents that will direct you to an online form. For non-Singaporeans and non-PRs, you will require additional supporting documents.

Step 2: Fill Out Your Application Form

On either sign-up option, you will arrive at the first requirement, 'Personal Details'. If you are using the Myinfo function will have basic information like your full name, NRIC, email address, mobile number, and residential address automatically populated. If you want to use different personal details—maybe you have a separate email address prepared—you won’t be able to edit it on-site, so make sure to update your Myinfo before beginning the sign-up process. Fill out the remaining required fields and ensure that all your details are correct. 

If you’ve opted for the online form, you will have to manually fill out all fields; the process will be the same sans pre-filling of fields. 

Step 3: Prepare Your Bank and Tax Residence Details

Prior to embarking on your CDP account application, ensure you have the necessary documents ready. These are vital for a smooth application process. Applicants should be at least 18 years of age and free from bankruptcy constraints.

For Singaporean Citizens (SCs) or Singapore Permanent Residents (PRs) applying through Myinfo with Singpass, the required documents include:

• A Singapore Bank Account
• A photographed or scanned copy of your signature
• Your Tax Identification Number (TIN), commonly your NRIC number

For applicants with a tax residency status outside Singapore, you will need to provide the following:

• Country of Tax Residency
• Tax Identification Number (TIN) 
• Completed Form-W9 (for US tax residents); or Completed Form W-8BEN (non-US tax residents)

Step 4: Submit and Await Verification

Before you submit your application, thoroughly check that all details and documents are correct. When you’re ready, review the declaration boxes below and press ‘submit’. Now, it’ll be processed, and you’ll receive a confirmation with more information if everything goes well.

Congratulations. You’ve opened your SGX CDP account!

Types Of SGX CDP Accounts

Individual Account

Individual accounts cater to the solo investor, offering a personalised space for managing one's investments. These accounts are tailored to individual needs, providing a secure and dedicated space for the custody and management of shares and bonds.

The flexibility and personal control offered by individual accounts make them particularly suitable for solo investors. Whether you're a seasoned investor or new to the stock market, the individual account caters to your need for direct investment management, offering detailed statements and online access to monitor your portfolio's performance.

Joint Account

Joint accounts are designed for shared investment activities, allowing two or more individuals to co-manage their investments. This setup is ideal for partners, family members, or friends who wish to combine their resources for investment purposes, offering a unified platform for managing their securities.

These accounts come with features that facilitate collaborative investment strategies, such as shared ownership of securities and joint decision-making capabilities. Joint accounts are especially suitable for those looking to pool their investments with trusted individuals, fostering a collaborative approach to investment that can leverage collective insights and strategies.

Corporate Account

Corporate accounts are structured to meet the investment needs of legal entities such as companies, trusts, or partnerships. These accounts provide a platform for corporate bodies to participate in the stock market, allowing them to invest corporate funds in securities.

With features tailored to the complexities of corporate investing, these accounts offer entities the ability to manage their investment portfolios on a larger scale. Corporate accounts are suitable for businesses and organisations looking to diversify their assets, enhance their portfolio investments, or leverage the stock market for corporate gains. The management of these accounts typically involves a higher level of scrutiny and compliance, reflecting the intricate nature of corporate investments.

Linking Your CDP Account to a Brokerage

To start trading and investing in the Singapore stock market, linking your Central Depository (CDP) account to a brokerage account is essential. The CDP account is where your shares are stored, ensuring they are in your name and providing you direct ownership rights, such as attending annual general meetings and receiving dividends directly. On the other hand, a brokerage account is necessary for executing trades—buying and selling stocks. Without a brokerage account, you wouldn't be able to place trades in the stock market. Here's how:

Choose a Brokerage Firm: Select a firm that aligns with your investment strategy and preferences.

Fill Out the Necessary Paperwork: Complete all required forms to link your CDP account to your chosen brokerage.

Confirmation: Await confirmation that your accounts are linked.

Linking your CDP account to a brokerage streamlines your trading activities, ensuring seamless transactions and settlement of trades.

Accessing CDP Account Information

Investors can effortlessly access and monitor their CDP account details online, including transaction history and current holdings. This convenience ensures that you are always informed about your investment status.

Buying Foreign Stocks and Entities Through StashAaway

Exploring international markets opens a new realm of opportunities for investors. Bank brokers can help one purchase foreign stocks and entities, provided these brokers grant access to the markets outside of Singapore. However, foreign shares are not maintained within the SGX CDP account. Instead, they are held in a nominee account managed by the brokerage, which ensures compliance with international trading norms and regulations.

StashAway's General Investing provides an innovative solution for investors looking to tap into global markets. With its proprietary Economic Regime-based Asset Allocation (ERAA) strategy, StashAway manages portfolios based on macroeconomic data to optimise asset allocation according to changing economic conditions. This approach aims to maximise returns while keeping risk levels constant, offering intelligent, global diversification across a wide range of asset classes using cost-effective ETFs.

One of the standout features of StashAway's General Investing is its adaptability and user-friendly nature. Investors can set up a portfolio within minutes, with the assurance of automatic updates and rebalancing by experts. There's no minimum balance or monthly requirements, making it accessible to all investors. Moreover, StashAway emphasises transparency in its fee structure, ranging from 0.2% to 0.8% per annum, without any hidden charges.

Opening A CDP Account Unlocks A World Of Options

Opening an SGX CDP account is a pivotal step in your investment journey, providing you with the tools and access needed to navigate the Singapore stock market effectively. It's an essential move for anyone looking to diversify their investment portfolio, offering a gateway to a plethora of investments and trading opportunities.

We encourage you to consider this essential step towards broadening your investment horizons. For those eager to expand their knowledge of the stock market or related areas, StashAway's Academy offers a wealth of resources to guide you on your journey.