SHARE FINANCING ACCOUNT

Pledge your shares to increase your trading power

Why you will love this

Share financing lets you trade up to 3.5 times your original value with cash pledged as collateral and up to 2.5 times with shares pledged as collateral.

Who can apply

Anyone age 21 and above, with a cash trading account

For local application

Apply at a branch with these supporting documents 

  1. For Singaporeans and Permanent Residents:

    • NRIC/SAF/SPF ID and Passport

    For Malaysians:

    • IC and Singapore Residence Pass (e.g. Employment pass) if applicable

    For Foreigners:

    • Valid Passport and Singapore Residence Pass (e.g. Employment pass) if applicable

    Note: Bring the originals of these Identification Documents (ID)

  2. Provide us with the original or electronic copy of any of the following documents reflecting your name and address:

    • Bank statement from a Monetary Authority of Singapore (MAS) licensed bank
    • Latest CPF statement
    • Latest Notice of tax assessment from IRAS

    Note: Document(s) must be dated no older than 3 months from date of application. If your mailing address is different from your residential address, please provide one document for each address.
    If you are applying for a corporate account, please call us at 1800 338 8688

For overseas application

Mail in the completed application forms with copies of:  

  1. Required for all:

    Optional Forms

  2. Provide a copy of your identification:

    For Singaporeans and Permanent Residents:

    • NRIC/SAF/SPF ID and Passport

    For Malaysians:

    • IC and Singapore Residence Pass (e.g. Employment pass) if applicable

    For Foreigners:

    • Valid Passport and Singapore Residence Pass (e.g. Employment pass) if applicable

    Bring your original ID, the photocopy and our account application form to any of the below authorised parties to witness your signature on the form and certify true copy of your ID:

    • Notary Public
    • Advocates & Solicitors
    • Singapore Embassy

    The witnessing officer should provide his/her name and contact details.

  3. Provide us with the original or electronic copy of any of the following documents reflecting your name and address:

    • Bank statement from a Monetary Authority of Singapore (MAS) licensed bank
    • Latest CPF statement
    • Latest Notice of tax assessment from IRAS

    Note: Document(s) must be dated no older than 3 months from date of application. If your mailing address is different from your residential address, please provide one document for each address.

  4. Mail it to us

    OCBC Securities Private Limited
    18 Church Street #01-00,
    OCBC Centre South,
    Singapore 049479

Grab the opportunity to trade more with your idle share.

Features

Enjoy lower interest rates

Our Quality-Priced Loan scheme lowers your interest rates when you increase the proportion of high-quality shares in your portfolio.

Share Financing Simulator

The Share Financing Simulator helps calculate your margin percentage quickly and easily.

Save on foreign exchange conversion costs

We can finance your trades in 4 different currencies: SGD, HKD, USD and AUD. This lets you take up a loan, execute and settle your trades in multiple currencies and reduce unnecessary foreign exchange conversion costs.

View more details on our Multi-Currency Share Financing feature.

Trade beyond SGX and diversify your asset classes

We accept over 2,500 listed securities across 5 major markets: Singapore, Hong Kong, USA, Australia and Malaysia. The marginable securities span across many different asset classes, such as Company Shares, Real Estate Investment Trusts (REITS), Bonds, Exchange-Traded funds (ETFs) and American Depository Receipts (ADRs).

Quality-Priced Loan Scheme (QPL)

With our first-to-market Quality-Priced Loan (QPL) scheme, you can have better control over your interest rates. Enjoy lower interest rates on your SGD, USD and HKD loans by holding a larger proportion of higher grade collaterals in your portfolio as shown in the table below.

Stock Quality  Description SGD/USD/HKD Lending Rate^
Grade 1 Major global index components securities 3.50%
Grade 2  Large cap securities with market capitalisation of more than S$1 billion 4.50%
Grade 3 Mid/Small cap securities 6.50%
Grade 4  All other marginable securities 7.50%

Terms and Conditions governing Share Financing Quality-Priced Loan apply. OCBC Securities may at any time at its sole discretion, without notice or assigning any reason therefore, vary, amend or change the interest rates set out above. 
How It Works

Our Share Financing account comes with a secured credit facility. Deposit your marginable securities with us and free up your asset value to increase your share buying power.

Share as Collateral

Cash as Collateral

Leveraging trading up to 2.5 times 3.5 times
Collateral amount S$10,000

S$10,000

Purchasing amount

S$25,000 (2.5 times)

S$35,000 (3.5 times)

Margin percentage

140%
Total share value/ loan amount
(S$10,000 + S$25,000) / S$25,000

140%
Total share value/ loan amount
S$35,000 / (S$35,000 - S$10,000)

Share as Collateral

Leveraging trading up to
2.5 times


Collateral amount

S$10,000


Purchasing amount

S$25,000 (2.5 times)


Margin percentage

140%
Total share value/ loan amount
(S$10,000 + S$25,000) / S$25,000

Cash as Collateral

Leveraging trading up to
3.5 times


Collateral amount

S$10,000


Purchasing amount

S$35,000 (3.5 times)


Margin percentage

140%
Total share value/ loan amount
S$35,000 / (S$35,000 - S$10,000)

How margin call works?

Margin call is an industry wide practice for any form of leveraged trading. Your margin percentage is calculated as follows:

If the value of your collateral falls or if the FX rate moves against SGD, your margin percentage will fall. When the margin falls below 140%, a margin call will take place and you will need to restore it 140% by either liquidating shares or providing additional collateral.

If Margin Ratio falls What happens
Between 130%-140% Margin call to restore the margin percentage to 140% within 2 market days
Below 130% Margin call to restore the margin percentage within the date of notice

Example:
John deposits S$10,000 worth of
securities. This gives him a leverage of
2.5 times. He gets to purchase an
additional S$25,000 worth of shares,
bringing his total collateral value to 
S$35,000

However during the loan period, the
value of his collateral falls by S$1250,
causing his margin percentage to drop
to 135%

Here are actions he can take to restore
his margin percentage to 140%
Option 1: Top up S$893 in cash
Option 2: Deposit additional S$1250
worth of shares
 
Option 3: Liquidate S$3125 worth of
shares (at possible loss)

Before you apply

Eligibility requirements

Minimum age

Age 21 and above, with a cash trading account


Deposit requirements

Minimum cash deposit of $5,000 (in SGD or SGD equivalent) or deposit $5,000 (in SGD or SGD equivalent) worth of marginable securities


Commission rates and charges



Disclaimer

Risk warning for Share Financing
Borrowing to finance the trading of securities (leveraging/gearing) carries a high degree of risk. If the value of the collaterals declines substantially, falling below the maintenance margin requirement, you may be called upon to deposit substantial additional funds on short notice in order to maintain your position. If you fail to comply with a request for additional funds or reduce your loan within the specified time, your position may be liquidated at a loss and you will be liable for any resulting deficit in your account.

FAQs
Where will the shares be custodised?

Your Share Financing account will be linked to a designated sub-account maintained by us with Central Depository (CDP). When you deposit or purchase securities listed on SGX, they will be custodised in this sub-account. For securities listed in other foreign stock exchanges, they will be custodised with an established global custody service provider.

Is contra trading allowed?
Contra trading is not allowed on a Share Financing account. Outstanding buy and sell contracts must be settled by their respective settlement dates.
What happens to funds that are not used?
Interest (if any) will be computed on a daily rest basis and credited at the end of the month. The credit interest rate is reviewed periodically and subject to changes.
How to make use of the Quality-Priced Loan (QPL) scheme?

Below is an example of a leveraged dividend investment strategy using the Quality Priced Loan feature (For illustration purposes only).

Customer A, who provides a cash deposit of S$50,000, purchases up to S$175,000 worth of securities as shown in the table below.

MARKET COUNTER NAME GRADE DIVIDEND YIELD ANNUALIZED (%) DIVIDEND ANNUALIZED (S$) Purchase Amount1 (S$)
SG SINGAPORE PRESS HOLDINGS LTD 1 6.2992 2,204.72 35,000
MY BOUSTEAD HOLDINGS BHD 2 5.3508 1,872.78 35,000
US CAN IMPERIAL BK OF COMMERCE 3 5.2084 1,822.94 35,000
HK PCCW TLD 1 8.9078 3,117.73 35,000
AU ABACUS PROPERTY GROUP 1 8.5052 2.976.82 35,000
TOTAL       11,994 175,000


1The purchase amount is the same as the marginable value.

Based on the above illustration, the blended interest rate on the financing amount of S$125,000 made available to Customer A is 4.3%.  (The blended interest rate is computed based on the proportionate value of Customer A’s holdings of each grade of security which has been charged to OCBC Securities Pte Ltd (“OSPL”) in relation to the financing).  The net interest payable would thus amount to S$5,375 (4.3% of the S$125,000 loaned to Customer A under the Share Financing facility).  

The table below summarizes the expected return Customer A would earn with and without the Share Financing facility.  With the Share Financing facility, Customer A can expect to earn higher returns due to the lower initial outlay required for the investment.


  Cash Dividends Receieved (S$) Interest Payable (S$) Net Cash Return (S$) Initial Investment (S$) Net Return (%)
With Share Financing 11,994.99 5,375 6,619.00 50,000 13.24
Without Share Financing 11.994.99 0 11,994.99 175,000 8.85


Important Notes

Investors should note that there are necessarily limitations and difficulties in using examples, tables or illustrations to provide a full explanation or depiction. Anyone wishing to participate in the Quality Priced Loan feature should contact OSPL for further details and advice. All information, statements, figures, content, explanations, examples, and details (collectively, the “Information”) contained above is intended for illustrative and/or information purposes only, and should not be relied upon for any purpose whatsoever. It is not advisable to buy or sell shares or take any action based on any Information reflected above. If you nevertheless wish to act based on the Information, it is entirely at your sole risk and responsibility. The Information is not to be construed as investment advice or recommendations by OSPL, and OSPL is not making an offer to buy or sell, or a solicitation of an offer to buy or sell the securities of any issuer. The Information also does not take into account the particular investment objectives, financial situations, or needs of individual investors.

No representation or warranty whatsoever (including without limitation any representation or warranty as to accuracy, usefulness, adequacy, timeliness or completeness) in respect of the Information provided herein is given by OSPL and it should not be relied upon as such. OSPL does not undertake an obligation to provide additional information, update the Information or to correct any inaccuracy that may become apparent at a later time. OSPL shall not be responsible or liable for any loss, damage, claims, demands, actions, proceedings or expenses whatsoever incurred or suffered by any person whether directly or indirectly howsoever in connection with or as a result of such person relying or acting on any Information provided or omitted herein. In no event shall the Information or any change, omission or error in the Information form any basis for any claim, demand or cause of action against OSPL and OSPL expressly disclaims liability for the same.

View more details on our Multi Currency Share Financing feature

More questions and answers
HOW TO APPLY

Open a Share Financing account today

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