Share Financing Account (V)

Financing Quantum
We provide 80% financing for ‘S’ grade securities, 71% financing for ‘A’ grade securities and 50% financing for ‘B’ grade securities. Securities graded as ‘C’ will not be marginable. The list of marginable securities will be made available to you when your Share Financing account is approved.

Margin Requirement

Margin ratio = Ledger / Collateral
Margin ratio must always be less than 100%.

Collateral refers to the value of securities held in the account after accounting for all outstanding sell trades. To obtain the collateral value of the securities, the value of ‘S’ securities will be multiplied by a price factor of 0.80, the value of ‘A’ securities will be multiplied by a price factor of 0.71, and ‘B’ securities multiplied by a price factor of 0.50.
Collateral Value = Market Value of ‘S’ securities * 0.80 + Market Value of ‘A’ securities * 0.71 + Market Value of ‘B’ securities * 0.50
Ledger refers to the amount of loan utilized.

Example:
A customer deposits S$10,000 cash and S$10,000 worth of ‘A’ securities, and buys S$20,000 worth of ‘B’ securities. Assuming that the market prices remain stable.

Collateral:
‘A’ share deposited: S$10,000 x 0.71 = S$7,100
‘B’ share purchased: S$20,000 x 0.5 = S$10,000
Total collateral: S$7,100 + S$10,000 = S$17,100

Ledger:
Cash deposit: -S$10,000 (reduces the ledger amount)
‘B’ share purchased: S$20,000 (increases the ledger amount)
Total ledger: -S$10,000 + S$20,000 = S$10,000

Margin ratio = Ledger / Collateral
= S$10,000 / S$17,000
= 59 % (ratio is within limit)

Margin Calls
A margin call occurs when margin ratio ≥ 100%. If 100% ≤ margin ratio <110%, you have 5 market days including the day of notice to reduce the margin ratio to below 100% If the margin ratio rises to or above 110%, you have to restore the margin ratio to below 100% on the same day of notice before 3 p.m.

Methods of meeting margin call:

– Depositing cash
– Depositing securities
– Liquidating securities

Custody of Securities
All shares deposited or transacted through the Phillip Share Financing Account will be held in our custody, except for purchases funded using CPF/SRS monies.

Settlement
All securities transacted through the Phillip Share Financing Account will be settled in the account. Therefore, all share purchases and subsequent sales must be conducted through this account.
As long as there are sufficient funds (in SGD equivalent) in the share financing account, you enjoy automatic trade settlement.
Clients with multi-currency ledgers may settle their foreign currency denominated trades in the traded currency or in SGD.
For non multi-currency account holders, trades will be settled in SGD.

Fund Deposition
Payment for outstanding purchases must be received on or by due date +1 unless there are sufficient collateral to finance the purchase.

Excess Funds
Idle funds residing in share financing account will be automatically deposited into an interest bearing account. However, interest will only be paid on the dollar in excess of stipulated amount. Interest income will only be credited if the monthly accumulated interest income is greater than $1.

Multi-currency Facility
Account holders have an option to opt for Multi-currency facility.
Account holders should ensure that they have sufficient funds in the foreign currencies ledger to avoid incurring interest on debit balances. Please refer to our Infosheet on the applicable debit interest rates.

Withdrawal
Sale proceeds and contra gains will be credited into the share financing account. The amount that may be withdrawn is based on the Available Cash. Withdrawals in excess of credit balances will be considered as a loan.

Monthly Statements
There are 2 types of statements sent to you:

  1. Statement reflecting monthly transaction movements and balance in the trading account
  2. Statement of transaction for equity trading (if there are any trades done)

If there is no transaction done in the trading account, a quarterly statement will be issued instead.

You may also view your current and previous month’s transaction history and account details up to 12 months year-to-date through POEMS.

Enroll in eStatements today to enjoy greater convenience of viewing your statements on the go and save the environment! Click here to find out more.

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IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com