Good morning everyone, seems like some have question about direct/noms CDS during opening of trading account.

So, i try to shares my knowledge about trading account opening with you all. Do correct me if i wrong and miss out anything.

Let's start will type of retail trading account for individual.
basically they are two type of account which is Direct and Securitised.
So when you open your trading account you have to choose either Direct and Securitised.

Direct account will have his name in the CDS account and Securitised will have the Noms account pledged security for XXX.

So let see the different between this two account.
For direct account, actually your trading limit is against Remisier Security Deposit which mean even your trading limit is RM500k but your Remisier trading limitis only RM300k, you can only can buy up to RM300k.

The basic calculation for Remisier trading limit:
[(Remisier deposit) - losses (all clients)] x X (multiplier, e.g. 10 times (vary by different PO) = Y
Y will have to minus o/s purchase (all clients) = available limit of the day (share by all his clients).

Therefore, direct account trading limit will have to depends on your Remisier limit.


Securitised account using noms cds is because. your trading limit is against your collateral.
Therefore, your purchase will not included in the Remisier available limit. Your trading limit is solely based on what you have in your account, i.e. shares and trust (cash in your trading account).

Why using noms is because PO can force sell your shares if your didn't pay your losses where else Direct they cannot simply force sell your shares to cover losses.

some PO have the "direct" securitised which you can use your own name in your CDS but you have to sign letter indemnity where if you incur losses, they have the rights to force sell your shares to settled the losses. [Pros is you can apply IPO because you are using your own name in CDS instead of Noms]

You don't have any limit if you don't have any collateral in your securitised account even approved limit i.e. RM200k.

Therefore, choose the account yourself instead let your remisier choose for you. Some tricky remisier will help you open the securitised so will not "eat" his trading limit because either his clients losses is so hugh until he no longer have limit or his security deposit is limited to shares among his clients.

hope this will help