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A Tiger Brokers Singapore spokesperson has told Mothership that "only 700" customers were "negatively impacted" by a fee change implemented earlier this year, which allegedly caused a Singaporean man to suffer a loss of S$15,000 on the trading platform.
He claimed that he had not been sufficiently informed of a fee change that the platform implemented on Jan. 13, and was charged about US$16,000 (S$22,187) in settlement fees after selling about US$5,000 (S$6,976) of a U.S.-listed penny stock in April 2022.
Customers were reportedly notified of the new fee structure on Dec. 27, 2021, where they were informed of a revision in fees that would be implemented on Jan. 13, 2022. This included a change in the calculation of settlement fees, which would be charged at US$0.003 per share with no cap on the total amount.
26 customers ended up with negative balances after trade
A spokesperson from Tiger Brokers said that out of its estimated 500,000 customers, "only 700 customers were negatively impacted by (the Jan. 13) fee change" as they were charged settlement fees that exceeded the value of the proceeds of their trades.
They added that this was due to the "nature of their trades".
Of these 700 customers, 26 allegedly ended up with a negative balance in their accounts after the sale of their shares.
"Tiger Brokers received feedback from various sources and was reviewing the fee change," the spokesperson continued.
It decided that "for the benefit" of its users, it will "retrospectively implement a cap on the particular fee item causing the issue". Tiger Brokers also said that they have refunded the fees to all 700 affected customers (instead of just the 26 with negative balances) as "a gesture of goodwill".
Cap on settlement fees introduced
The online trading platform informed their customers of a revision in settlement fees on May 18, explaining that settlement fees for trades of U.S. stocks and exchange-traded funds (ETFs) will be capped at 7 per cent of the trade value.
The most recent change took effect on May 19.
Tiger Broker Singapore's email to clients on May 18, 2022.
Was not cautioned by MAS
The rep claimed that the company "promptly informed" the Monetary Association of Singapore (MAS) on their recent review and decision and added, "At no time was Tiger Brokers cautioned by MAS or by any regulatory bodies on this commercial matter."
Rival trading platform follows suit
On May 25, Futu SG, which operates rival trading platform moomoo, announced in an email to clients it will also be imposing a cap on settlement fees on U.S. stocks and ETFs traded on its platform.
Like Tiger Brokers, moomoo levies a US$0.003 settlement fee per share for U.S. stocks and ETFs. However, they have a lower cap on the settlement fees: 1 per cent of the transaction amount per order.
Futu SG said that the change took effect on May 23, and that some clients may be affected by the 11-day system upgrade period, which is taking place from May 23 to June 2.
They added that the any excess charges in settlement fees during this period will be refunded to clients' accounts within two to three business days.
Futu SG's email to clients on May 25, 2022.
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Top photos via Tiger Brokers Singapore's Facebook.