DBS Vickers has recently started a new product that might trigger the next price war in shares brokerage fees.
Currently, the commission rates for trading of stocks goes something like this (for trades below $50k):
0.5%, min $40 for broker assisted trades
0.275%, min $25 for online trades
For online trades, part of the commission will still go to a broker who is in charge of your account. The broker earns a cut because he has to bear the risk of any default of the account.
DBS Vickers new account that is not serviced by any broker. The commission rate (for trades below $50k) is only 0.18% with a minimum of $18.
This is possible because all trades in this account has to be cash settled. Funds has to be transfered into the trading account before you can buy. This is done via a direct transfer from your DBS internet banking. Access to the DBS Vickers account is also done via DBS internet banking.
This means no contra trades are possible. No issue as I never advocate contra trading anyway.
For more details of this service, visit:
Other brokerages will be forced to act otherwise they will start losing their market share.
If the size of your transactions are above $100k, then it won’t make any difference as the commission rates for large size trades (for online) is currently already at 0.18%.