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Question Title : I am interested to start trading in stocks. How do I open a trading account?

Q:	I am interested to start trading in stocks. How do I open a trading account?
A:	If you want to start trading in stocks listed on the Singapore Exchange, you will need two accounts: a securities account with The Central Depository (Pte) Ltd (CDP) and a trading account with a stockbroking member of SGX-ST. The securities account is for the settlement of trades. It maintains all the shares you’ll buy on SGX, and electronically records the movements of the shares in and out of your account as you buy and sell them. The trading account allows you to trade shares in the stock market. Both these accounts have to be linked before you can start trading. To open a securities account, you will need to be 21 years of age and must not be an undischarged bankrupt. You will have to complete the application forms for the opening of a CDP direct securities account through your broker or directly with the CDP. That means, if you sign up with a stockbroking company, you can open both accounts with your stockbroker at the same time. While you can have only one CDP securities account, you are free to open trading accounts with multiple stockbroking houses. Investing in the stock market can be rewarding but it also involves risk. You should have an understanding of the workings of the stock market and keep abreast of economic and corporate developments. Here are two key tips that you should take note of when investing: (i) Never invest based on rumours or “hot tips”. Always take time to understand the stock that you are thinking of investing in and the accompanying risks. For example, find out more about the company’s operating model, business environment and its management so as to gain a better understanding of the company’s strategic direction, the key challenges and opportunities that the company faces. You can obtain this information by reading the company’s prospectus, annual reports, financial statements and corporate announcements. Such information is available on the company website and on the SGX’s website (www.sgx.com). You can also find out more by reading various media and research reports. (ii) Always make it a point to consider how the investment you are considering fits in your overall financial plan. Ask yourself what is your investment objective and investment horizon. Understand how much risk you are prepared to take. Be aware of how much you can afford to invest and how much losses you can afford to incur. To find out more about stock investing, please click here. Posted by Singapore Exchange Ltd on 7/10/2008