10 Quick Facts about Standard Chartered

Hello all!

Since I started my investment journey, I have always been planning to open a Standard Chartered Online Equities Trading account for my investment needs once I am qualified for a CDP account (in less than a year’s time now) as I recall that Stanchart OETrading Account provides the lowest commission fees the last I researched. However after the recent news of it shutting down its global equities business, which is a major change, it obliged me into re-researching about its business again…

In summary:

  1. StanChart will be closing its institutional cash equities, equity research businesses and cease offering capital markets services, such as initial public offerings, in attempt to save costs amounting to at least US$400 Million this year (US$100M coming from closure of equities business)
  2. StanChart has handled several local IPOs including OUE Commercial Trust, Frasers Hospitality Trust and Keppel DC Reit
  3. The closure would be likely to limit growth of StanChart as a private bank
  4. Discussions are ongoing if there should be an adjustment of chief executive to address pending issues, such as expansion of restructuring plans and writing of rights issue to raise capital
  5. StanChart shares have been dropping more than 40% over past two years and a quarter in the past year
  6. Biggest shareholder(18%) currently is Temasek Holdings
  7. Since Temasek’s investment, StanChart’s shares have been beating the MSCI World Banks index
  8. Sponsorship of Liverpool Football Club was extended two years ago till the end of the 2015-16 season
  9. In 2012, StanChart was accused of hiding US$250 Billion in transactions involving Iran (“rogue institution”) by New York Department of Financial Services (DFS) which ended exceptionally quick within a week by a settlement of US$340 Million fine, hence raising further re-investigations by several other US agencies
  10. In 2014, StanChart was fined $300 million by NYDFS again for violation of money-laundering compliance to high-risk transactions involving Standard Chartered clients in HK and UAE

 

So comes the question: Should I continue my investment on Standard Chartered Online Equities Trading account?

Regards,
The Independent Abecedarian

6 thoughts on “10 Quick Facts about Standard Chartered

  1. Hi TIAB,

    A SCB representative called me today and assured me that my trading account will not be affected. However when asked about the future, he is unable to give the same assurance.

    I will not close down my SCB account trading because I still have some shares and I do not see a need to sell them but I will no longer be using their brokerage for local stocks.

    Their commission may be cheaper but I like the assurance that my shares are safe in CDP and will not be held ransom by any single brokerage. In addition, when it comes to rights issue, DRP etc, SCB has a shorter timeline.

    1. Hello Derek!

      Thanks for dropping by and tweaking my links here and there. Appreciate it!
      I understand what you mean. So I assume you will rather save a bulkier amount of cash before transacting them together to another brokerage to minimize trading cost % than continue transacting with SCB, right! If the time comes and you have to sell, I am sure you will ditch the positions with SCB first before the other brokerage too?

      Personal. However will having two trading accounts add up more confusion and time over the next few years? Like example if you have SPH shares in both SCB and DBS trading accounts, during a rights issue opt, two letters would be received on two different dates.
      Hmm, or I guess maybe it’s my little OCD acting up, I think that I wouldn’t be able to cope with the confusion for long! Haha

      The IA

  2. Hi IA,

    From your replies to derek, seems like you got some misconceptions.

    If you trade through normal brokers (i.e not held through a custodian acct like SCB), your shares that you bought are deposited in your own CDP account. This is held under your name. If you have two brokerage houses where you buy the same shares, it will also be transferred to the same CDP account under your name. So no, you won’t have two letters sent to you because you have 2 accounts. You have only 1 letter sent to your mailing address because you have shares by that company in your CDP account. Such letters regarding rights shares are not sent to you by the brokers, unless you have a custodian account.

    I have about 4-5 accounts under 3 brokerage houses, though I trade mainly in just 1. There’s a reason for me to open so many accounts. In the past, I’ve a smaller account so the brokers don’t let me buy/sell beyond a certain amount. Opening different account helps. Secondly, when the market crashes and everyone is rushing to sell, brokerage platform will get jammed. When it comes, I’ll go to most stable platform to buy/sell.

    1. Hello LP!

      Thanks for clarifying this in much details! Appreciate it.
      Ahh, so I guess OCBC BCIP is just a custodian account like SCB. Was confused for a moment because I did remember asking similar question to the OCBC guy who called me and explain what’s the plan about.
      He said something like if I open another account from another bank and buy the same stock through that bank and through BCIP, I’ll get two different letters for every dividend payment, rights issue etc.

      I see.. That’s a smart move to diversify your risk on your side, LP! I won’t have thought of that haha.
      Grateful sharing your personal views and knowledge, LP. 🙂

      Regards,
      The IA

  3. Hi The IA,

    LP already answered your confusion ya?

    I only have stock A with SCB and no other brokerage firm. Hence, when it is time to sell stock A, I can only sell it via SCB. If I sell Stock A using another brokerage firm, they will check my CDP and if they cannot find stock A, they will deem me as shorting the stock.

    1. Hey Derek,

      Thanks for your concern and keeping me entertained of things I never knew! Learn something every time 🙂
      Now I understand much better on how this custodian and CDP works!
      And the accident shorting looks to me like a real serious mistake for any traders…

      Regards,
      The IA

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