Saxo Bank Launches Fractional Shares Trading in Singapore

Saxo Bank announced today (Tuesday) the launch of fractional trading for its clients in Singapore. The service is available for instruments across asset classes on the brokerage platform.

Lowering the Entry Barrier to Investing

Fractional shares allow traders to purchase part of a whole share with whatever capital they have. This significantly lowers the entry barrier to investing. For example, if Apple shares are trading at $200 each and a trader has only $100 available, they can buy $100 worth of Apple shares and will own half a share.

“This allows clients to invest in high-priced stocks with a smaller amount of capital,” Saxo explained.

“Also, by investing precise amounts, investors are better able to fully utilise all available funds,” the bank added. “Overall, this offers clients more flexibility, allowing them to construct portfolios that fit different budgets.”

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Although the concept of fractional share trading is not new, the service has gained popularity in recent years. Many brokers now offer fractional share trading to retail investors, thus lowering the entry barrier to the markets.

The growing popularity of fractional share trading has also drawn the attention of global regulators. Last year, the United States’ Financial Industry Regulatory Authority (FINRA) introduced new guidelines requiring the reporting of both whole share and fractional share quantities.

The Cyprus Securities and Exchange Commission (CySEC) also clarified when fractional share investments qualify as direct share ownership under MiFID II.

Saxo’s Change of Ownership

Meanwhile, Saxo Bank's ownership is changing. Earlier this year, Swiss private bank J. Safra Sarasin agreed to acquire a 70 per cent stake in Saxo Bank in a deal valued at around €1.1 billion ($1.19 billion). The transaction values the Danish online trading and investment services provider at approximately €1.6 billion.

The new owner will purchase Finnish firm Mandatum's 19.8 per cent stake in Saxo, along with the 49.9 per cent stake held by Chinese group Geely. Saxo Bank’s founder and CEO, Kim Fournais, will retain his 28 per cent stake and will continue to serve as the company’s CEO.