There has always been speculations and suspicions about active fund managers and their high management fees and expenses charged. This may have resulted in the USA's SEC review on payments between funds and brokerages which you can read at this URL...
SEC review reveals web of payments between funds and brokerages
Final analysis could lead to an overhaul of the industry
[NEW YORK] The tens of millions of dollars in annual fees that mutual fund companies pay to brokerages and their financial advisers to encourage sale of certain funds to retail investors are growing in size and variety, but the phenomenon is largely invisible to investors.
The US Securities and Exchange Commission, which 18 months ago began a review of fees paid among mutual fund advisers, fund companies and the brokerage firms that sell the funds, has uncovered a complex geometry of payments that may lead to sales of certain funds at the expense of others and is not clearly disclosed under regulators' current requirements, according to a person familiar with the review.
A final analysis of the fee infrastructure and disclosure holes is expected to be completed by year-end, and could lead to an overhaul of how the industry pays for sales and how the brokerage industry discloses the bounty it collects.
Past attempts by the SEC and the Financial Industry Regulatory Authority to improve disclosure and end certain incentive payments have faltered.
Showing posts with label brokerages. Show all posts
Showing posts with label brokerages. Show all posts
Sunday, September 14, 2014
Wednesday, September 3, 2014
New SGX trading rules - The issue that has yet to be tackled
Recently, SGX has came out with a slew of changes for stock trading on Singapore Stock Exchange (SGX), and you can see this news, title "New SGX trading rules: What you need to know" at this URL...
In particular, I don't see how the new rules will help the young investors and small investors, as claimed in the article:
" Board lot size reduction
What is this?
This move cuts the minimum purchase "lot" of SGX-listed securities from 1,000 to 100 units.
That means you will be able to buy just 100 DBS shares, for example, instead of having to purchase a minimum of 1,000, which is the case currently. For example, to invest in pricier blue chips like DBS, which closed at $17.92 last Friday, you would need to put up $17,920 to buy 1,000 DBS shares. But under the new rule, you can buy 100 shares for $1,792.
How does it benefit investors?
This will make blue chips and index component stocks more affordable and help investors build portfolios with a smaller capital outlay.
Young investors with typically smaller cash reserves will have a wider range of equities to choose from, while longstanding investors can diversify further into blue chips.
For example, an investor could easily build an equity portfolio by buying 100 DBS shares, 200 Keppel Corp shares, 100 Jardine C&C shares and 300 Global Logistics Properties shares - all for an investable amount of $10,000. "
You see, 1 of the main issue that has not be raised, let alone tackled, to allow young investors and small investors to trade or even dollar-cost average every month is the high minimum commission charged by Singapore stock brokerages. This minimum commission ranges from $25 to $35 dollars just for online trading of stocks (with no stock broker / remisier's help). For example, if somebody is going to buy 100 DBS shares at $1,792 and pay a brokerage commission of $25, that would be 1.4% in commission!
In order to achieve their stated aim, they have to seriously look into this high minimum commission issue....................
In particular, I don't see how the new rules will help the young investors and small investors, as claimed in the article:
" Board lot size reduction
What is this?
This move cuts the minimum purchase "lot" of SGX-listed securities from 1,000 to 100 units.
That means you will be able to buy just 100 DBS shares, for example, instead of having to purchase a minimum of 1,000, which is the case currently. For example, to invest in pricier blue chips like DBS, which closed at $17.92 last Friday, you would need to put up $17,920 to buy 1,000 DBS shares. But under the new rule, you can buy 100 shares for $1,792.
How does it benefit investors?
This will make blue chips and index component stocks more affordable and help investors build portfolios with a smaller capital outlay.
Young investors with typically smaller cash reserves will have a wider range of equities to choose from, while longstanding investors can diversify further into blue chips.
For example, an investor could easily build an equity portfolio by buying 100 DBS shares, 200 Keppel Corp shares, 100 Jardine C&C shares and 300 Global Logistics Properties shares - all for an investable amount of $10,000. "
You see, 1 of the main issue that has not be raised, let alone tackled, to allow young investors and small investors to trade or even dollar-cost average every month is the high minimum commission charged by Singapore stock brokerages. This minimum commission ranges from $25 to $35 dollars just for online trading of stocks (with no stock broker / remisier's help). For example, if somebody is going to buy 100 DBS shares at $1,792 and pay a brokerage commission of $25, that would be 1.4% in commission!
In order to achieve their stated aim, they have to seriously look into this high minimum commission issue....................