Opening a trading account in Singapore is now easier than ever before. With the rise of online trading platforms, when it comes to investing money, the question is not if you can open a trading account, but how old do you have to be to do so? In this article, we will be answering just that!
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Singapore’s legal age to open a trading account
In Singapore, the legal age to open a trading account is 18 years old. This age limit applies to all residents, without any exceptions. However, minors who are keen on gaining access to markets can get exposure through another name — custodian accounts.
Custodian accounts allow adults to open an investment account for minors. Under a custodian account, the minor will not be involved in the decision-making, and the account’s assets remain in custody until the child reaches a certain age.
However, custodian accounts do come with a few caveats. Firstly, you must be the child’s legal guardian to open such an account. Secondly, you must ensure that the child has no access to the account until they reach the age of 18. Finally, it’s essential to keep up to date with the account’s regulatory requirements to avoid any legal issues.
Why 18?
18 is the age of majority in Singapore. Because of that, you become responsible for yourself and are given additional privileges, such as the legal capacity to sign contracts and borrow money. Prior to that, you are considered a minor under Singapore’s Children and Young Persons Act. As a result, you can’t vote, serve in the army, consent to medical treatment, get married, or legally trade securities on your own.
Why is 18 the legal age of majority in Singapore?
Singapore adopts 18 as the age of majority because it aligns with the country’s education system. At 18, students sitting for the GCE A-Level will graduate and typically proceed with university studies. Moreover, 18 years is also the age when national service (NS) obligations start for males, which marks an essential developmental milestone in Singapore life.
Furthermore, raising the legal age of majority to 18 is a global trend. Many countries worldwide have opted for this age limit due to its alignment with the International Convention of the Rights of the Child, which sets 18 as the standard age of adulthood.
What are the penalties for underage trading in Singapore?
Singapore’s capital markets regulatory authority, the Monetary Authority of Singapore, takes trading activities seriously. Various regulatory guidelines and laws exist to protect market participants. Suppose an underage trader is discovered in the market. In that case, it can lead to legal issues with the trading firm, the law enforcement agencies, and also the custodian account adult. Therefore, it is advisable to wait until you are 18 to start trading in Singapore markets.
FAQs
Can I open a trading account if I am not a Singapore resident?
Yes, you can. However, to meet regulatory requirements, you may have to provide additional documentation, such as proof of address, identity, and tax residency.
Can I start trading without a broker?
No, you can’t. Brokerage accounts are required to trade securities on any exchange. A broker is responsible for executing trades on your behalf and handling all the necessary regulatory requirements, including market compliance.
Are there any exceptions to the age limit for opening an investment account?
Yes, exceptions to the age limit for opening an account exist only for custodian accounts, where adults open and manage accounts on behalf of minors.
Can a person under 18 still be exposed to investing?
Yes, they can. Parents or legal guardians can help teach financial decision-making skills by investing in real estate, mutual funds, or other alternative investments on the minor’s behalf.
Conclusion
To sum up, the minimum age to open a trading account in Singapore is 18 years old. It’s important to note that minors can still gain market exposure through custodian accounts, which allow adults to manage accounts on their behalf. Therefore, if you’re under 18, it’s best to seek help from a legal guardian or parent interested in investing. Remember, there is no rush; the stock market will still be there when you reach the age of majority.