Singapore Exchange Regulation (SGX RegCo) today launched a public consultation exercise on modernising the Singapore equities post-trade custody model. The consultation paper seeks feedback on the proposed rule amendments to facilitate the broader use of broker custody accounts, in particular, on an omnibus basis.
SGX says that about two-thirds of retail accounts in CDP are individually-segregated direct accounts, while the remaining one-third are in broker custody accounts.
SGX RegCo notes that investors in Singapore can hold their Singapore equities directly with CDP in individual accounts and in broker custody accounts. This arrangement is in contrast to other markets where one holds securities from different markets under one account, usually on an omnibus basis.
It also points out that should investors adopt omnibus accounts for both local and overseas securities, it would be more convenient for portfolio management. Investors may also be able to enjoy more value-added services from their brokers, such as fractional trading, portfolio management, robo-investing, as well as other innovative products and services.
Vice President of the Securities Investors Association (Singapore) Ang Hao Yao says that the change to broker custody accounts will be "welcomed" by those who enjoy new product services and new trading strategies where their broker has visibility on their holdings and will be able to provide advice. He also adds the possiblity of investors enjoying lower costs. "With more clients placing their stocks under broker custody, brokers are likely to face reduced credit risks and, in turn, offer more competitive trading commissions which will benefit investors."
By facilitating higher adoption rates of omnibus accounts, SGX RegCo adds that this may also attract more foreign intermediaries to participate in the local market as they would not need to maintain one model for Singapore and another omnibus model which they are familiar with for other markets.
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“We believe it is timely for a wider adoption of the broker custody model as it brings meaningful benefits for both investors and brokers,” says SGX head of equities Ng Yao Loong.
CEO of SGX RegCo Tan Boon Gin says that the proposal seeks to provide “strong assurance” on the integrity of the operational and custody processes of the services provided by intermediaries. “As we modernise our market infrastructure, we want to ensure that the standards of our custody framework remain robust,” Tan adds.
According to SGX for the past five years, broker custody accounts have grown at a compound annual growth rate (CAGR) of more than 10% compared to low single digit CAGR for CDP accounts.
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The initiative to update the post-trade custody model was first announced in November 2025. Brokers have said that the move will provide more convenience to retail investors and allow the former to provide value-added services.
Interested parties may access the paper on the SGX website and submit their views by Mar 27.
