Margin Financing
Financing Quantum
We provide 70% financing for ‘A’ grade shares and 50% financing for ‘B’ grade shares. Shares graded as ‘C’ will not be marginable. The list of marginable securities will be made available to you when your Investment Margin trading account is approved. All new Phillip Margin (M) accounts will have an initial credit limit of S$50,000.
Margin Requirement
Margin ratio = Collateral / Ledger
Margin ratio must always be equal to or greater than 140% in order to trade.
Collateral refers to the value of the securities held in the account after accounting for all outstanding buy and sell trades. To obtain the collateral value of the securities, the value of ‘A’ shares will be multiplied by a price factor of 1.00, and ‘B’ shares multiplied by a price factor of 0.70.
Collateral Value = Market Value of ‘A’ shares * 1.00 + Market Value of ‘B’ shares * 0.70
Ledger refers to the amount of loan utilized.
Example:
A customer deposits S$10,000 cash and S$10,000 worth of ‘A’ shares, and buys S$31,250 worth of ‘B’ shares. Assuming that the market prices remain stable.
Collateral:
‘A’ shares deposited: S$10,000 x 1.00 (price factor) = S$10,000
‘B’ shares purchased: S$31,250 x 0.70 (price factor) = S$21,875
Total collateral: S$10,000 + S$21,875 = S$31,875
Ledger:
Cash deposited: -S$10,000 (reduces the ledger amount)
‘B’ share purchased: S$31,250 (increases the ledger amount)
Total ledger: -S$10,000 + S$31,250 = S$21,250
Margin Ratio = Collateral / Ledger
= 31,875 / 21,250
= 150% (ratio is within limit)
Margin Calls
A margin call occurs when the margin ratio falls below 130%.
If 120% ≤ margin ratio < 130%, you have 3 market days including the day of notice to restore the margin ratio to at least 130%.
If the margin ratio falls below 120%, you have to restore the margin ratio to at least 130% on the same day of notice before 3.00 p.m.
Methods of meeting margin call:
– Depositing cash
– Depositing shares
– Liquidating shares
Custody of Shares
All shares traded through the Phillip Investment Margin Account (both local and foreign shares) will be held in our custody.
Share Settlement
All shares transacted through the Phillip Investment Margin Account will be settled in the account. Therefore, all share purchases and subsequent sales must be conducted through this account.
Multi-currency Facility
Account holders have the option to opt for Multi-currency facility.
For foreign currency denominated contracts (USD, HKD, MYR, JPY, AUD, GBP, EUR, CAD), settlement will take place in the traded currency or SGD. Respective currency accounts should have sufficient funds to avoid incurring interest on debit balances. Rates on debit balances are as follows:
| Currency | Interest on debit balance |
| SGD | 6.00% p.a. |
| HKD | 7.00% p.a. |
| USD | 6.00% p.a. |
| AUD | 8.75% p.a. |
| GBP | 4.50% p.a. |
| JPY* | 4.20% p.a. |
| EUR | 7.00% p.a. |
| CAD | 7.00% p.a. |
| MYR | No debit balance allowed |
Withdrawal
Sale proceeds and contra gains will be credited into the Investment Margin account. The amount that may be withdrawn is based on the Available Cash. Withdrawal in excess of credit balances will be considered as a loan.
Monthly Statement
Besides being able to view your monthly transactions online, physical statements will be mailed to you if you have any transactions in that month.
To save the environment and enjoy greater convenience, you may opt to receive monthly statements by emails (E-statements) instead. To opt for E-statements, kindly follow the steps below:
1. Log in to POEMS with your account number and password
2. Click on Stocks >Acct Mgmt> Update Particulars
3. Scroll down to
4. Enter the email address to which you wish to receive your E-statements.
5. Choose the password you wish to use to open your monthly statement, the password must be different from the one used to log in to POEMS.
6. Click on the Update button.
Upon completing the steps above, monthly statements will be sent to you by email instead of physical statements.
