You open an account with the custodian, then instruct a book-entry transfer of your shares into it: through CDP if they sit in your own CDP securities account, or through your bank or broker if it holds them for you. Each step depends on the parties involved, so allow time and start before you need the funds.
Key takeaways
- Start with where the shares sit. Your SGX shares are held either in a CDP securities account in your own name or in a sub-account kept by a bank, broker or other depository agent.
- Who instructs depends on the account. CDP acts on a direct account holder's instructions; for a sub-account it acts on the depository agent's, and the agent needs your authority first.
- Account opening is the custodian's process. Expect its own forms and know-your-customer (KYC) checks, which vary by institution.
- Allow time. Transfers are subject to CDP's approval and conditions, and the custodian and any bank or broker involved work to their own processes, so start before you need the funds.
- Ownership stays with you. You remain the beneficial owner: the charge is security, not a sale, and it is released on repayment.
Moving the shares is part of the charge and custody stage of a stock loan, set out in our guide on how to borrow against SGX shares: you open an account with the designated custodian, the shares sit in it, and the lender takes security over that account. This note covers the mechanics of the move. It is general information, not legal or tax advice.
Where are my shares held now?
Your SGX shares are usually held in one of two places: a direct CDP securities account in your own name, or a sub-account kept by a bank, broker or other depository agent, which holds the shares for you in its own name at CDP.
A simple check is your statements. CDP sends statements to the holder of each securities account, and for shares in a sub-account that holder is the depository agent, which reports to its own clients instead. If the shares appear on your bank's or broker's statement but not on CDP's, they are held through that institution.
Where the shares sit decides who instructs the transfer. CDP debits and credits a securities account on the instructions of its holder, subject to CDP's approval and conditions. It does not act on instructions from sub-account holders; it acts on the depository agent's, and CDP's rules bar the agent from moving your shares without your authority.
Which route you start from also shapes how the charge is structured. Our note on CDP custody and share charges compares the two routes and explains why the route is settled with your Singapore counsel and the lender before funding.
What are the steps?
Moving shares into a custodian account takes five steps: agree the custody route with the lender and your counsel, open the custodian account, instruct the transfer, let CDP review and process it, and confirm with the custodian that the shares have arrived.
| Step | Who acts | Documents | Typical time |
|---|---|---|---|
| 1. Agree the custody route | You, the lender and your Singapore counsel | Indicative terms; draft facility, share charge and custody agreements | Varies |
| 2. Open the custodian account | You and the custodian | The custodian's account-opening forms and KYC documents, which vary by institution | Varies |
| 3. Instruct the transfer | You, for a direct CDP account; your bank or broker, on your authority, for a sub-account | CDP's Request for Transfer of Securities form with supporting documents, or the instruction your bank or broker requires | Varies |
| 4. Review and book-entry transfer | CDP | Any further information CDP asks for | Varies |
| 5. Confirm the credit | The custodian, then you | The custodian's notification and statement | Varies |
Agreeing the route comes first because it fixes which custodian, and which account, the shares will move to. It also assumes the facility can go ahead, so check first who qualifies for a stock loan in Singapore. Shares under a moratorium or another restriction on transfer raise separate questions, which your counsel should settle before anything moves.
The custodian opens the account under its own procedures. Once the account is open, the custodian gives you the details of the receiving account. If the shares are in your direct account, you instruct CDP; if a bank or broker holds them, you instruct it, and it instructs CDP on your authority.
CDP then moves the shares by book entry, debiting one account and crediting the other. Its debits and credits are subject to its approval, which its rules say shall not be unreasonably withheld, and to conditions it imposes. If the custodian is a depository agent, it must notify you of the transaction within a reasonable time and report the holding to you.
The lender's security over the account is documented in the facility agreement, share charge and custody agreement, reviewed by your Singapore counsel.
How long does each step take?
Timing varies at every stage of moving shares into a custodian account. CDP's rules make transfers subject to its approval and conditions, and the custodian's account opening and checks follow its own process, so the total depends on the institutions involved, the documents and how quickly queries are answered.
Each step sits with a different party. The custodian controls account opening and its checks; where a bank or broker holds the shares, it controls when your instruction goes to CDP; and CDP controls its review and the book entry. Ask each party at the outset what it needs, and start the custodian's account opening before you need the funds.
Paperwork is the part you control. CDP's transfer form asks for supporting documents and for your signature as it appears in CDP's records, and CDP may ask for further information where required. Getting both right first time, and confirming the transfer category in advance, removes avoidable back-and-forth.
What do I need to provide?
You need two sets of documents: the custodian's account-opening and know-your-customer (KYC) documents, which vary by institution, and a transfer instruction identifying the shares, the quantity, the account they leave and the custodian account they go to, signed as CDP, or your bank or broker, requires.
Account opening follows the custodian's own process, and its list of documents varies by institution. Financial institutions in Singapore are required to identify and know their customers, including beneficial owners, so expect to provide identification and, if a company holds the shares, details of its beneficial owners. Ask the custodian for its list at the start.
For shares in your direct account, CDP's Request for Transfer of Securities form names the shares by security name, code and quantity, gives the CDP account numbers of both sides and states the type of transfer. Where the receiving account belongs to a depository agent, the agent confirms the beneficial owner's name. An individual's signature must be witnessed, for example by a CDP officer or a notary public; a company signs through its authorised signatories.
The type of transfer matters. CDP's form distinguishes, among others, a transfer with no change in beneficial owner from one made because shares are pledged as collateral, and its fee differs by type. Confirm the right category with the custodian and your counsel before you sign, and check CDP's current form for the fee.
If a bank or broker holds the shares, ask it what it needs: CDP acts on its instruction, not yours. Check too that the shares are free to move. CDP can hold securities in separate balances: those outside the free balance, such as shares bought but not yet paid for, are subject to its conditions and may not be freely transferable.
This note does not cover tax or stamp duty. For the tax side, see our note on capital gains tax when you borrow against SGX shares rather than sell, and confirm your own position with a tax adviser.
