Account for trading KLSE shares in Malaysia and other countries
Here is it, it's better late than never; a post on CDS account.
To trade shares in Malaysia, you need a CDS account, and there are two types of CDS account we can all register as individuals - Nominees and Direct CDS. Both cost about the same to register, ranging from free to RM28 depending on the institution. There are online trading platforms, but for some reason, I prefer dealing with banks. I have trust issues with Mushrooms platform.
I trade with Maybank for about a year -the account offered were Nominees CDS - so your holding appear as XXX Corporation - YOUR NAME. I was told that there is no difference between holding it directly or via nominee but NO..they LIED.
Nominees CDS Account
You do nothing. Banks charge you a fee for doing anything even if it's just a click of a button - under nominee account - they charge you fee for debiting your dividends into your account, manage your rights issue. If you are aiming for dividend income- you will end up paying a lot of fees.
You can't walk in AGM of the companies without a letter from the Bank with a nominee account. They don't recognize you as their shareholders.
Direct CDS Account
The main benefit is you can walk in any AGM of the companies you own.
Two reasons you may want to attend AGM - you are free and want to have the first-hand feel of how the company is doing. Two, you are kiasu and want to collect door gifts/vouchers - applies to some business, local counters are not as generous as the State. An example of good door gifts are Nestle, PosMalaysia, even MKLand, and stingy ones are PJD, the Berjaya group related company. I currently do not own any, but I found my source on the news.
Second, for dividends and bonuses - you just have to sign up with Bursa for e-payment, and it is all free.
Third, you can transfer your account if you want to change brokerage company one day. For now online transaction fee is quite fixed at RM8-12 the lowest but as time goes by and internet-of-things are getting cheaper - a game changer might come. In the states, you even trade with zero fees with Betterment. Nominees account cannot be transferred.
A very radiant solution for me is the Hong Leong Bank Direct CDS account. I think it is the best with low if not the lowest fee - and they don't pay me to say that. Though, applying the account is a bit of a hassle. ^6 steps and about a month's time.
1. Request a hardcopy form
2. Attach your photocopy IC
3. A bank statement or open savings account with Hong Leong
4. Make a payment of RM10.60 over the counter
5. Courier the form to the right branch.
6. Wait about two weeks to open the account.
You can also purchase foreign shares with this account although the charges are not competitive.