No rush to bring zero-fee share trading to Malaysia

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KUALA LUMPUR (July 25): In the past year, some of the biggest online brokerages in the US, the likes of Charles Schwab Corp, E-Trade, Interactive Brokers and TD Ameritrade Institutional, have embraced the zero-fee online share trading model.

Last month, Hong Kong-based Huatai International joined the race, shaking the brokerage industry in the special administrative region when it announced it would scrap commissions for all stock trades.

As the zero-commission trading model looks to take the world by storm, what are the chances of Malaysian brokers following suit?

The brokerages The Edge spoke to are of the view that some basic requirements need to be put in place first before the model can be introduced. Already, they have seen their commission income fall in recent years, as commission rates have shrunk with the growth of online trading and decline in trading volumes.

Nevertheless, they concede that it is only a matter of time before Malaysia jumps on the bandwagon.

On its part, the Securities Commission Malaysia says it takes cognisance that the current market structure needs to enable diversity and innovation in intermediary models that can offer niche value proposition, which may be based, among others, on the extent of use of technology, investor segmentation or multi-asset capability.

To know more about what transpired, pick up the latest issue of The Edge.

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