Here are they key features of CFD:

• Underlying Investment Product
• Portfolio Diversification
• Short Position
• Leverage
• 30 Calendar Days Contract Period
• Sophisticated Trading Strategies

To find out more about the product features, please click here to read up on the Phillip CFD Infosheet.

It is important to note that there are risks involved in trading CFDs, which include the following, amongst others:

• Leverage Risk: As CFDs are leveraged products traded on margin, the risk of any gain or loss in leveraged CFD trading can be amplified. The amount of initial margin required to be deposited in the customers’ account prior to trading can be small relative to the value of the contract. A relatively small market movement will have a proportionately larger impact on the funds that customers have deposited or will have to deposit to maintain their position(s). However, if the market moves against the customer’s position(s) or if margin levels are increased, the customer may be called upon on short notice to pay additional funds in order to maintain their position(s).
• Counterparty Risk: CFD is an over-the-counter (OTC) leveraged product traded on an off-exchange basis. Off-exchange transactions are typically less regulated and are subjected to a separate regulatory regime. The firm with which customers conduct their transactions (which may be Phillip Securities, if Phillip Securities acts as your broker to effect a transaction with such firm, or another firm) may be acting as a...
  Read More

The gross profit or loss of any Equities CFD contracts is calculated by taking the difference between opening and closing prices multiplied by the quantity. The gross profit or loss of any World Indices CFD contracts is calculated by taking the difference between opening and closing prices multiplied by the quantity, and multiplied by the value of 1 index point. This does not take into consideration trading fees such as commission and finance charges.

The contract value of any CFD contract is calculated by taking the traded price by the traded quantity. For example, for a CFD contract where the traded price is $1.00 and the traded quantity is 1,000 shares, the contract value is $1,000.

No. CFD is an Over-The-Counter (OTC) instrument and Phillip Securities Pte Ltd (PSPl) is acting as principal.

You will be charged opening commission, closing commission and pro-rated mark-to-market finance charges when you trade CFDs.  To find out about our latest rates and promotions, please visit http://www.phillipcfd.com/markets-products/commissions-and-finance-charges/.

Yes. However, please note that financing charges are levied on 100% of the contract value regardless of the leverage utilized.

Example:

You deposited $10,000 and you trade CFD contract value of $8,000. Finance charges would be levied on the full $8,000.

On the expiry date, your outstanding CFD contract would automatically extend for another 30 calendar days, based on the closing price of the 30^th day.  All profit/loss and finance charges for the first 30 days will be realized upon contract renewal. There is no roll-over commission to be paid, so the only charges payable is the opening commission, closing commission and pro-rated finance charges.

Example: Client who short sold 10,000 shares (non-Index Component SGX share) initially at S$2.00; Last Done Price on the 30th day is S$2.28; Bought back finally at S$1.90. Assuming commission rate of 0.30%.

You need to close off your positions by the expiry date.

No. You do not have to. The system will automatically roll over your contract on the 30^th calendar day.

Commission charges are levied on each transaction based on the full traded value and are subjected to GST. Minimum commission applies.

Finance charges are computed on 100% of the marked-to-market contract value based on number of overnight calendar days that the contract is being held.

Commission Illustration

Bought (Long) 10,000 shares @ $8.00

Assuming commission of 0.20%

Long finance charges = 5.5% p.a

Commission = $80,000 * 0.20% = $171.20 (inclusive of GST)

Assuming you hold the contract for 10 days

Finance Charges = 80,000 * 5.5% * 10 days / 365 days = $120.55

There are no finance charges if you liquidate the position within the same day.

Yes. CFD contract holders can close out their contract any time within the 30 days. Likewise, if you do not close off your position, the system will roll over your contract automatically for another 30 calendar days.

Yes, except for US Shares CFDs.

It is the adjustment of the book value of the underlying security to reflect the current market value on daily basis so as to calculate profits or losses to ensure that margin requirements are met.

Yes. The maximum leverage is only offered as a built-in feature. If you have deposited $10,000 into your CFD account, you have the freedom to trade up to a maximum of S$50,000 for a 20% margin requirement stock. You can also choose to trade a smaller contract value that that.

Yes. From time to time, we reserve the right to amend the margin requirements of the underlying stocks or instruments in which we offered.

It is the number of underlying shares in the contract multiplied by the price of the underlying security. Example:

A Phillip CFD investor Buys (Long) 10,000 ‘A’ shares @ $2.00 per share

The contract value is 10,000 * $2.00 = S$20,000

Phillip CFD offers counters listed in the Singapore Stock Exchange (SGX), Hong Kong Stock Exchange (HKSE), Bursa Malaysia (KLSE), New York Stock Exchange (NYSE) and NASDAQ (NASD). Please refer to the Phillip CFD Product List for the full list of counters offered @ www.phillipcfd.com

No. CFD is an Over the Counter (OTC) instrument and payment or settlement in full will not result in physical delivery of the shares.

No. Trading CFDs does not give investors the ownership to the underlying stock. Therefore, CFD holders do not have the voting rights.

You may long or short all counters stated on our counter list except for counters which specify “Long Only”.

Queue restrictions for Shares CFDs are as follows:

Queue restrictions for Direct Market Access (DMA) CFD are +/-20 bids from the last done price.

The minimum contract size would be similar to the board lot size on the underlying shares. We do not accept odd lot orders, except in cases whereby the odd lots were the result of bonus issues, stock split or stock consolidation. However, odd lots orders must be transacted via CFD Dealing Team at +65 6336 3338.

Initial margin requirement is as low as 10% of the market value based on the entry price. For the different margin requirements for Equities CFD, please refer to the CFD Product list.

Phillip CFD will adjust for corporate actions such as 1) dividend, 2) bonus shares, 3) stock splits and 4) reverse splits.

Dividend adjustment will be made one market day before the ex-dividend date of its quoted shares for Asian markets, and at the end of the market day on ex-dividend date for US markets. Customers who bought the CFD contract will be credited the net dividend. Customers who short sold the CFD contract, will be debited the gross dividend.

Stock splits and reverse splits will be adjusted on the ex-dividend date. Bonus will be adjusted on payable date. CFD positions will be adjusted to reflect the theoretical new price and quantity.

For corporate actions not mentioned above, Phillip Securities Pte Ltd reserves the rights to liquidate outstanding positions before the ex-dividend date.

Your CFD contract value would the same. However, the quantity and theoretical price of the initial contract will be adjusted.

Example:

11 January 2011: ABC company declared CUM Bonus of 1 For 2

14 January 2011: Client A ‘shorted’ 10,000 ABC shares @ $2.00 per share

25 February 2011: EX DATE

If you do not close off the above ‘short’ position by 24 February before market close, your CFD position would be adjusted in the following manner:

a)       New quantity: 15,000 of ABC shares

b)       New price = Initial Contract Value/new quantity = $1.333 per share

Your CFD account will be debited of the cash amount equivalent to the gross dividend.

Example

ABC company declares a dividend of $0.05 per share.

If you shorted 10,000 ABC shares during CUM dividend period and do not close off before the ex date, on ex date your account would be debited: 10,000 shares * $0.05 = $500.

The orders for NYSE and NASDAQ markets are made up of two order types, LIMIT and MARKET.

Orders can be entered for the day during the following timings:

• Submission Period

Yes, you will be entitled to dividends.  A holder of long Phillip CFD on US Shares CFD will receive a credit adjustment in the account, where the adjustment is equivalent to the net dividend payment due on the underlying shares. Conversely, a holder of short Phillip CFD will incur a debit adjustment where it is equivalent to the gross dividend.

1. Customers are required to fill up the W-8BEN Form before they are allowed to trade Phillip US Shares CFDs.

Single Account holders are not allowed to trade US Shares CFD.

Log in to www.poems.com.sg>CFD>FORMS>DMA Opt-In and select the only option. Access to Direct Market Access would be granted immediately.

You can submit over night orders on DMA, but not on Shares CFD.

Funds will be debited real-time for all new CFD positions, and credited real-time when the positions are liquidated or when the contract is rolled-over. Commission, accrued finance charges and unrealized profits or losses will be credited and debited at the end of the day. Interest will be debited or credited at month end.

When you trade a security or underlying instrument denominated in USD, HKD, SGD, MYR, all charges, profits and losses would be settled in that respective currency which the security is being denominated. If you have deficit in any of these ledgers, you would be required to pay penalty interest on the margin deficit. Please refer to charges for the penalty interest. Therefore, you are strongly encouraged to check your account on a periodic basis to check for any deficit amount.

Customers who would like to trade in US Shares CFDs need to complete and submit W-8BEN Form, which is a requirement by U.S. Inland Revenue Service for account holder to declare that the beneficiary owner of the amount received from US sources is not a US person. Submission of this Form is compulsory. Please note that US Persons/Canada Citizens/US Taxpayers are not eligible to trade in US markets through Phillip Securities Pte Ltd.

Customers are required to subscribe to the service in order to view US World Indices CFD live prices and monthly US live price feeds are chargeable. Customers will be able to trade US World Indices CFD if they do not wish to subscribe for US live prices.

Single Account holders are not allowed to trade US Indices CFD.

A dividend adjustment will apply for World Indices CFD, after the ex-dividend date of its underlying component stock. For example, dividend adjustment will be credited to the customer’s account for customers with long positions in World Indices CFD. For customers with short positions in World Indices CFD, the dividend adjustment will be debited from the customer’s account.

Customers who would like to trade in US Indices CFDs need to complete and submit W-8BEN Form, which is a requirement by U.S. Inland Revenue Service for account holder to declare that the beneficiary owner of the amount received from US sources is not a US person. Submission of this Form is compulsory. Please note that US Persons/Canada Citizens/US Taxpayers are not eligible to trade in US markets through Phillip Securities Pte Ltd.

A cash-derived World Indices CFD tracks the underlying index exactly. A cash-correlating World Indices CFD correlates with the underlying index, but the price may not track exactly.

The gross profit or loss of any World Indices CFD contracts is calculated by taking the difference between opening and closing prices multiplied by the quantity, and multiplied by the value of 1 index point. This does not take into consideration trading fees such as commission and finance charges.

Queue restrictions for World Indices CFDs are +/-20% of current Bid/Ask price.

Initial margin requirement is as low as 5% of the market value based on the entry price. For the different margin requirements for World Indices CFD, please refer to the CFD Product list.

The prices quoted in the World Indices CFD have a target spread. However, spreads are subject to variation, especially in volatile market conditions and may widen during out-of-trading hours.

Here are the key features of World Indices CFD:

• Trade the entire stock market with index-tracking CFD
• Increased leverage, more trading power
• Participate in rising and falling markets

To find out more about the product features, please click here to read up on the Phillip CFD Infosheet.