Mr Speaker,
At the outset, let me state that the objective of this Bill, which seeks to provide Singaporeans with greater flexibility and ownership over the Singtel shares that they hold in their CPF accounts, is a good one.
The SingTel Discounted Shares (SDS) scheme is a legacy scheme introduced in 1993, and many Singaporeans who bought shares under the scheme would be seniors now. The proposed transfer would enable SDS holders who hold shares in their individual CDP accounts to consolidate all their holdings and make it easier for them to track and trade these shares. This is a positive move.
However, there are several aspects of the implementation that warrant closer scrutiny.
First, more than two in five SDS holders do not have individual accounts. I would like to ask why the Government has chosen to create designated CDP accounts for the sole purpose of holding Singtel SDS for these SDS holders, instead of simply seeking the consent of SDS holders to create standard individual CDP accounts and transfer SDS shares into these accounts for them?
A designated account appears to be a workaround rather than a fully empowering solution. If the policy intent is to give shareholders true ownership and control, then enabling them to hold these shares in regular individual CDP accounts would seem more consistent with that goal.
Second, I note that only a select list of brokers has been authorised to facilitate the sale of these shares. What is the rationale behind limiting participation to this group?
In today’s market, there is a wide range of brokerage platforms offering competitive commission rates lower than the commission rates currently cited for selling SingTel SDS. Currently, the commission rates are 0.24% if shares are sold through Phillip Securities, or a flat fee of $17.95 if sold through SingPost. Meanwhile, low-cost brokers in the market offer rates as low as 0.03% or even flat fees of around $1 to $2. Why were these lower-cost options not included in the list of approved brokers?
By allowing SDS holders to sell their shares only from a short list of brokers, competition may be reduced. This may, in turn, disadvantage shareholders, especially those who are already unfamiliar with accessing financial services.
Additionally, senior SDS holders with mobility issues or limited digital savviness are only able to authorise a third party to sell the Singtel SDS on their behalf at SingPost branches. The flat fee of $17.95 charged for these transactions may represent a larger proportion of sales proceeds for SDS holders who hold small quantities of shares.
Half of the SDS holders own less than 1,360 shares or a shareholding less than approximately $6,000. For these small holdings, the fees will materially erode the value realised. Will the Government consider waiving the fees for very elderly SDS holders that are selling only small amounts of shares through SingPost, so that they can unlock their holdings for use during their golden years at no cost?
Mr Speaker, notwithstanding my clarifications, I support the Bill.
