This post was first published on 24 January 2021 and has been updated to include the latest information.
You don't have to be intimidated or confused by financial jargon and complex investment concepts when you start investing. Learning them is a rite of passage even the most seasoned investors once had to go through.
You can systematically build your knowledge base by reading more books and online articles, talking to friends and family who have already started investing, and even dip your toes into the markets yourself.
In order to start investing in companies and other listed securities on the Singapore Exchange (SGX), one of the first things you have to do is mainly an operational task – open your Central Depository Account, or CDP Account.
What Is the CDP Account For?
Operated by the SGX, your CDP account provides integrated clearing, settlement and depository facilities for individuals in the Singapore securities market, for equities (i.e. stocks), fixed income instruments (i.e. bonds) along with other listed securities. Do observe that there are three types of CDP accounts:
- Individual account
- Joint account (if two individuals desire to jointly own the account) and
- Corporate Account (for corporations).
In this article, we will focus only on the Individual account, which is the most typical type of account for retail investors like us.
Stocks, REITs, ETFs, bonds along with other securities that you buy on SGX are automatically deposited and stored in your personal CDP account, rather than with the stock broker you used to complete the transaction. This allows you to view and manage all the investments that you have made, even via multiple stock brokers, via a single CDP account.
Do note that each investor can only hold one direct account with CDP. One more thing you should note is that most of the brokers in Singapore also offer nominee/ custodian accounts, where they dominate the function of storing your investments after completing the transaction. You will find pros and cons of doing this – namely paying slightly lower brokerage fees in exchange for less convenience and certain maintenance fees.
Here's an easy illustration of how the buying and selling of stocks on the SGX is done.
Why You Need A CDP Account?
If you've linked your CDP account towards the brokerage account that you are using, stocks that you buy or sell through this CDP-linked brokerage account will automatically be deposited into or withdrawn out of your CDP account.
In the case of Singapore incorporated companies, the Singapore Companies Act only recognises investors holding a company’s shares within direct accounts with CDP as shareholders of this company. What this means is that being an investor, you will be accorded all of the rights associated as a shareholder of the company if you hold its shares using your CDP account.
In contrast, if you buy shares of the company through a nominee/ custodian account, where stocks that you simply buy are held by the brokerage firm that you use, then you are not automatically considered an immediate shareholder of the company.
From 1 February 2021, we can log in to CDP Internet via our SingPass (no sign-up required) to view our portfolio and update our contact information. At the same time, we can also connect to the SGX Investor Portal, which works as a one-stop access for stock investors.
As a brand new initiative, SGX has launched its SGX Investor Portal to supply a simple one-stop investing portal with features for example:
- Single login to view securities holdings of all your brokerage accounts
- View and download as much as 24 months of e-statements
- View and download as much as 60 days of CDP Notifications
- Set up a Watchlist of counters you are looking into (known as Favourites)
- Subscribe to email notifications
- Apply/change Direct Crediting Service bank account
- Update Particulars
You will also have easy access to key investment resources from SGX for example:
- SGX Academy
- SGX Investor Road Map
- Securities Borrowing and Lending (SBL) Pool
- CDP Buying-in Reports
- Specified Investment Products (SIP) Qualifications
- Currency Conversion (CCY) service
How To Open A CDP Account?
Opening a CDP account is a fairly simple process. Before you apply for one, make sure that you meet the following eligibility criteria.
- You should be 18 years old and above;
- You must not be an un-discharged bankrupt; and
- You must have a banking account with one of the following banks in Singapore – Citibank, DBS/POSB, HSBC, Maybank, OCBC, Standard Chartered Bank and UOB.
If you meet all of the above criteria, you can proceed to apply for your CDP account.
Whether you are a Singapore resident with a SingPass login or have a passport using their company nationalities, you can now apply and open a CDP account online, without needing to submit hard copies of supporting documents. This will make it even faster and more convenient since you can complete the process from the comfort of your house.
Singaporeans with a SingPass login can use Myinfo to sign-up for any new CDP account, which allows you to automatically pull-up and auto-fill key information that are required for your application such as your name, date of birth, email and residential address – all of which are already stored within SingPass. Those with no SingPass login can simply use CDP’s online form to register.
This not only means that your registration is going to be completed quickly, but that you are not required to authentic the information since it’s already authenticated by SingPass.
Step 1: Download and finish the CDP application form on the SGX website.
The form are available on the SGX website. Here's the hyperlink for easy access.
Step 2: Print a photocopy of your Singapore NRIC, Malaysia Identification Card, or Passport.
Investors, both local and foreign, can open a CDP account.
Step 3: Attach one from the three following original documents or e-statements, dated within last Three month, to your application form.
This can be either your bank statement from any of the Monetary Authority of Singapore (MAS) licensed banks
Your Central Provident Fund (CPF) statement (on the CPF website)
Your Latest Notice of Assessment for Tax (available on the IRAS website)
Step 4: Submit the signed form and supporting documents through one of the following channels
The broker that you are opening a brokerage account with
Send it by mail to CDP – The Central Depository (Pte) Limited, 11 North Buona Vista Drive, #06-07, The Metropolis Tower 2, Singapore 138589
Drop off the form physically at The Central Depository (Pte) Limited, 9 North Buona Vista Drive, #01-19/20
Alternatively, you can also plan an appointment directly with CDP. While booking the appointment, indicate that you are looking to open a CDP account.
LifeHack: Apply Through The Firm You Are Opening A Brokerage Account With
For people who feel it is a hassle to spread out an account on your own, one alternative will be to simply open your CDP account through the brokerage firm that you are already opening an account with.
If this is the first time you're signing up for a brokerage account, your broker will probably aid in providing you the CDP application form to fill in and submit them, on your behalf, to CDP. This saves the hassle of having to deliver the application form on your own.
Once you have submitted the CDP application form and all supporting documents, your CDP application is completed. CDP will notify you by post with your necessary login information in about 10 business days from the day of your application submission.
Unsure of how you will get started on your own investing journey? You can find more helpful content on the For Tomorrow website today.