SRS investment options

[PNGMK]

My wife (a USC) has had similar issues. You'll have to fake it somehow.

[malcontent]

UOB KH had the same verbiage about not accepting US persons when I opened my account there. I just filled out the forms anyway, maybe I got lucky.

UOB also sent me a letter saying I shouldn’t be buying S27 on the SGX because their agreement is to withhold 30% on all dividend payments because all investors are expected to be non-US. I ignored that advice and kept investing in S27, and I get the 30% withholding refunded on my U.S. tax return… which is ideal. The only problem I’ve had is that they do not properly declare the dividends as qualified, which would be lower tax… but I don’t own enough to worry about.

Do keep in mind that opening with UOB was not a cake walk, expect to dedicate a couple of hours a week for a few months. For example, to trade online you’ve got to set up a CDP account, to trade S27 you’ve got to qualify to trade SIPs. Then you’ve also got to ask the broker to establish a reasonable credit limit for you to trade with. That’s on top of all the other paperwork.

A Citibank relationship manager boasted to my friend that they were the only broker in Singapore that accepts US persons, but I don’t know the details or whether they’d accept SRS funding.

The other one you might check is Interactive Brokers… they officially incorporated in Singapore several years ago, and were expected to eventually handle SRS as well, but I haven’t heard whether that has happened yet.

[smoulder]

For example, to trade online you’ve got to set up a CDP account, to trade S27 you’ve got to qualify to trade SIPs.

Not true. You can open what I believe is called a custodian account (instead of a CDP account) with POEMS, Syfe and Endowus to name a few. Link that to your SRS account and you can trade S27. This is a faster setup process than the CDP.

The part about qualifying to trade SIPs - I believe you are referring to the CAR test and I believe it's mandated by the MAS.

[malcontent]

For example, to trade online you’ve got to set up a CDP account, to trade S27 you’ve got to qualify to trade SIPs.

Not true. You can open what I believe is called a custodian account (instead of a CDP account) with POEMS, Syfe and Endowus to name a few. Link that to your SRS account and you can trade S27. This is a faster setup process than the CDP.

The part about qualifying to trade SIPs - I believe you are referring to the CAR test and I believe it's mandated by the MAS.

The three SRS operators actually use their own custodians for holding securities purchased with SRS funds - in the case of UOB it’s UOB Nominees. The reason UOB KH requires you to open a CDP account is “just in case” you lack the funds needed in your SRS account to cover your purchase, the trade will still be executed and you’ll pay cash to cover it — it won’t end up in your SRS, it’ll end up in your CDP. If you have the funds in SRS to cover it, your CDP will remain dormant, like mine.

What you are referring to is non-SRS trading accounts for non-US persons. POEMS, Syfe and Endowus use their own custodian as a cheaper (but potentially riskier) alternative versus the CDP. If I were a non-US person, I would not be comfortable keeping significant investments assets with such a custodian - especially considering how little I trade (the savings wouldn’t be significant). For my SRS account, I only trade (buy) about once per quarter.

Yes, the CAR test is required before you can trade S27 because it is classified as a SIP. It’s a fairly easy test to pass, for me, I used my finance degree, but there are several other ways.