Malaysia's largest stockbroking firm, K&N Kenanga Holdings, hopes to set up a branch in Singapore by mid-next year.
If it comes off, the move could give fresh impetus to the trading of Singapore-listed shares among Malaysian retail investors.
K&N Kenanga, also Malaysia's only non-bank backed investment bank, is majority-owned by vehicles linked to Sarawak Chief Minister Taib Mahmud's family.
The firm currently enjoys the biggest share of the retail investor market in Malaysia.
"We already have the clients and natural demand from Malaysian clients. I don't have to start from scratch when we set up in Singapore," K&N Kenanga group managing director Chay Wai Leong, a Singaporean, told The Straits Times in an interview.
The firm is in talks with the Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS) on the move.
Currently, only a small number of K&N Kananga's some 300,000 clients in Malaysia trade in Singapore stocks. "In a single year, such transactions amount to about RM2 billion (S$785 million). It's not big but right now, we are passive," he said.
These trades are transacted through K&N Kenanga via brokers in Singapore.
The room for growth is significant and in line with the SGX's aspirations to pitch the bourse's appeal to investors abroad, more specifically in the ASEAN region.
That was the impetus for the ASEAN Trading Link between SGX and Bursa Malaysia and the Thailand Stock Exchange, launched late last year to crank up cross-border stock trades.
Whether trading volume among these three exchanges has picked up as a result is not clear, but industry players say the response has been tepid, at best.
K&N Kenanga's presence here could give that goal a major boost.
"We can bring to Singapore a new segment of investors - the Malaysian retail investors, a segment we have the largest market share of," said Mr Chay.
That's not to say there are no Malaysian stockbroking firms here operating in a big way. Malaysia's largest bank Maybank acquired one of Singapore's oldest broking firms Kim Eng two years ago.
Long before that, CIMB snapped up GK Goh's broking operations here in 2005.
Another player is DMG & Partners Securities, controlled by Malaysia's OSK Investment Bank. Last year, OSK Investment Bank was acquired by the nation's fourth largest lender RHB Bank.
These firms have continued to build on their strong Singaporean retail presence as well as having a strong institutional investor base.
On the other hand, one of K&N Kenanga's key rationales for setting up here could be to include Singapore stocks on the radar of its wide Malaysian retail clientele.
The firm's RM875 million acquisition last year of ECM Libra Financial Group, led by Mr Chay had helped vault the company to the top three ranks in the stockbroking scene in Malaysia.
This year, the firm snagged second place among the stockbroking firms in Malaysia in terms of trading volume and value with a 13 per cent and nearly 10 per cent share respectively, according to Bursa Malaysia's website. In terms of trading value, it was second to CIMB.
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