(Updated: 23 August 2019)
After using Rakuten Trade for some time, I have discovered some of its disadvantages. As it is using nominee account exclusively, Rakuten Trade is different from the main brokerage houses in Malaysia.
(I have talked about its benefits in another article.)
What is a nominee account?
It is a securities account opened by an authorised nominee in accordance with Bursa rules. In Rakuten Trade, the client’s CDS account is held under KIBB Nominees (Tempatan) Sdn Bhd, instead of under his or her own name. Nonetheless, the client’s name will still appear in the Bursa record in the following format: KENANGA NOMINEES (TEMPATAN/ASING) SDN BHD RAKUTEN TRADE SDN BHD FOR [CLIENT NAME].
Disadvantages of Rakuten Trade
1. No initial public offering (IPO)
As with all nominee accounts, we cannot apply for IPO using this platform.
My point of view (POV): As I do not invest in IPO, its absence does not bother me.
2. No annual report
The annual report will be sent to KIBB Nominees, instead of the account owner.
My POV: We can easily get the annual reports from Bursa Malaysia website. So, this is not a major problem.
3. Extra step to attend annual general meeting (AGM)/extraordinary general meeting (EGM)
To attend these meetings, we have to send our request through email to its customer service 10 working days before the meetings.
My POV: I do not attend these meetings. If I really want to attend a meeting, I will just send the email as soon as I know the date.
4. Slow dividend processing
The dividend will not go directly into our bank account, i.e. no e-dividend. The dividend will only be credited into Rakuten Trade account. This process will take at least five working days. Thus, we will be getting the money at a later date than the stated dividend payment date. The platform will send an email notification once the dividend is transferred into the account. The dividend vouchers will only be provided on request.
My POV: This is definitely an issue. But as long as the money goes into my account and I can withdraw the money easily, I am fine with it.
5. Earlier corporate action deadline
Due to the time required by Rakuten Trade for processing, it has an earlier deadline than the company registrar.
My POV: This is also a significant issue. If we miss the deadline, it means that we have forfeited an opportunity.
6. Adjusted price stock chart
Thanks to ChrisYeap for pointing this out. The stock price charts on Rakuten Trade may not be the same as the price charts on Bursa Malaysia as the platform uses adjusted prices, instead of the actual traded prices. Thus, if we want to know the actual traded prices, we may need to use the charts from other websites (like Bursa or i3investor.)
My POV: Since the information is available and easily accessible elsewhere, I feel it is not a very big issue.
Conclusion
The above are six disadvantages of Rakuten Trade that I discovered. Nonetheless, I personally will only treat the fourth and fifth as true disadvantages. Thus, it is up to you to decide if this is a suitable trading platform for your needs. If you find it to be unsuitable, there is a plethora of brokerages for you to choose. For me, I will still use this platform.
If you have more information about the disadvantages of Rakuten Trade, do share with us in the comment section below.
Referral link
Below is the referral link to Rakuten Trade. As I am involved in the Rakuten Trade Educator Program, by clicking on this link, I may gain referral rewards from your registration with the platform once certain condition is met. (2022: I am not longer involved in the Educator Program).
If you think I have done a good service in explaining the topic, please click on the link below if you are interested to register. Otherwise, you can always search Rakuten Trade Malaysia with Google and register yourself.
Rakuten Trade: Link here
*You may earn 500 RT points when you open an account or other account opening rewards being offered by Rakuten Trade. You may choose only one of them.
Comments
Can a foreigner (non-malaysian) invest in Bursa Malaysia solely via Rakuten Trade?
Author
Hi, Hisyam.
The answer is yes. You just have to specify you are a foreigner during the registration process and furnish the necessary documents. By the way, you will need a local bank account to trade via Rakuten Trade.
Is there a limit on withdrawal? This is because I’ve experienced using a so called international broker that allow me to only withdraw the amount that I’ve deposited into the account which prevented me from withdrawing my profits.
Author
Hi, Justin.
As far as I know, there is no withdrawal limit on this platform. You can transfer all money in your cash account to your bank account if you want to.
Great post. Enjoyed it, especially the slow dividend processing part. I’m using Heong Leong e-Broking right now, but thinking of switching to Rakuten. I seemed to have read somewhere that it is difficult to transfer a large amount, say 100,000 to Rakuten, since there is a daily transfer limit of about 30,000. If you want to transfer 100,000 or more, it will take a few days to do so. Isn’t that an issue?
Author
Hi, Lai.
Thanks for your comment.
The transfer limit of online banking is indeed RM 30000. Any amount more than that must be deposited through other methods such as personal cheque or over the counter. Other than the inconvenience of going to the bank, it will also involve extra steps to prove the transfer. Furthermore, unlike online deposits which are processed in real time, it will take some time for the fund to appear in your cash advance account. The fastest way may be IBG over the counter transfer which can be processed within one hour. Thus, this transfer limit will definitely be an issue if you are transacting large amount.
However, I do not have such a large capital, so it is a non-issue for me. The alternative is to deposit the money in a few sessions instead of a big lump sum. But this might take a few days to complete the transfer.
The above information is taken from Rakuten Trade FAQs, under the topic of Deposit and Settlement. You can visit the page by clicking here.
Thanks for your prompt reply. Certainly helpful.
Author
You are welcome. It is good to know that you find it helpful.
Hi Leckas,
Thanks for the information. I’m now signing up for Rakuten and using your referral code. 🙂 Am just about to try out trading stocks.
Author
Hi, meipst.
Thanks for using my referral code. Hope you will do well in your investing journey.
Appreciate your two write-ups on pros and cons, Leckas
Keep up the good work.
Will be using your referral code to signup too.
Author
Hi, Muyassarah.
Thanks for your support. Hopefully you will find my other articles helpful too.
Hi can u explain no 5 point i dont seem to get it,im looking fwd for day trader concept,if rakuten suites me definitely il use ur link to sign up
Author
Hi, Nizam.
Actually Jack asked the same question below. So I will just copy my reply here.
“Hi, Jack.
Examples of corporate actions include dividend reinvestment plan and rights issue. These actions normally have a deadline. So let’s say we want to subscribe to the dividend reinvestment plan. Rakuten Trade requires us to reply way earlier than the official deadline. Otherwise, we would not be able to reinvest the dividend.
Hope my answer is clear.”
Hope that this is clear for you. If you are going to day trade, maybe it is better that you use its Contra account as there is a Day Trade Rebate Programme (Link). But I personally am not using Contra account, so you have to find out more on that by yourself.
Great post, especially for a newbie like me.
Currently i am using RHB investment, after reading your post im thinking to use rakuten for my future investment.
Thank you.
Author
Hi, Yongfei.
Thanks for the compliment. You can try Rakuten Trade (RT) and compare it with RHB to see which one is better. If you do not like RT, you can still continue to use RHB.
Hi Leckas.
May I know what is dividend voucher?
Thank you.
Author
Hi, Tang.
The dividend voucher is a slip that the investor receives when the company pays dividend. It contains the details of the dividend. Normally, we would receive this voucher through mail. But if we trade using Rakuten Trade, we will not receive this voucher.
This voucher is useful for income tax purpose before the single-tier dividend system. However, I think it is not so useful now and I personally do not keep all these vouchers nowadays.
Hi Leckas, thank you for the article. I am a new RT cash upfront user, and noticed that my trading limit and withdrawal availability are no longer the same after i have sold some units. (Trading limit > Withdrawal availability). I could not withdraw the amount aa stated on the trading limit. Is there a specific time where these two become the same again?
Author
Hi, Harry.
The platform takes 2 – 3 business days for the settlement of transaction. After the settlement, the trading limit and withdrawal availability should be the same again.