I HAVE been trading actively on the Singapore Exchange (SGX) and the United States equity markets through a brokering firm's Internet platform for more than two years.
I would like to warn all investors using that platform to trade US stocks to be aware of a critical system flaw that could cost them dearly, especially during periods of market volatility, like now.
On the evening of Nov 21, several of my 'buy' orders for US shares were rejected by the trading system during US trading hours. The platform was unable to 'route the orders to the destination'.
Upon seeing this error message, I called my broker to get the number of the firm's 24-hour helpline, so as to execute those orders manually.
I was shocked when he replied that the brokerage does not provide any technical help in the event of system failure.
I called the firm's US office for assistance but my request was turned down as they did not have access to my account.
Moreover, they support only the firm's institutional clients.
What if I had been trying to 'sell' my stocks that night because of an imminent market crash? Would the brokerage bear my financial losses due to its system failure?
In this case, I lost the opportunity to make some quick profits because of the system failure.
I am now ready to transfer all my US stock holdings to another brokerage with a 24-hour helpline.
I am not sure whether the Monetary Authority of Singapore (MAS) regulates local brokerages that offer overseas stock-market trading services.
I would like to hear its opinion on this matter.
I hope that MAS already requires all brokerages to provide assistance to their customers during the trading hours of all overseas stock markets.
This is to safeguard the interests of investors who use Singapore as a base to trade overseas stocks.
