(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
Thank you Leckas!
Author
Hi, Harry.
No problem. I am happy that you find this article helpful.
Hi Leckas,
May I know that what should we do if we need a hard copy of dividend voucher since Rakuten Trade would never mail to us? Or have you ever request from them?
Thank you!
Author
Hi Ceecee.
I have never requested for hard copy. However, there is a guide on its FAQs.
The steps are as below:
You may view or download your “Dividend Tax Voucher” from our web trading platform.
Go to “MY ACCOUNT”
Click on “MY STATEMENT”
Select “Dividend tax voucher” at Document Type and click the “Show” button.
Finally, select “view” or “download” statement.
Hope this helps.
Hi Leckas,
Thanks for help, great informations that you provided.
Good day!
Author
Sure, no problem. Good day too.
Hello Leckas.
I actually do not quite understand your fifth point. Could you please provide me with a more detailed explanation and relevant examples?
Thank you.
Author
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.
I would like to ask, I am a beginner in this kind of world after, I click the email verification and it said email verified successfully than what should I do, how I can login to my account?
Author
Hi, Lolo.
I do not really remember how it goes after that. If I am not wrong, you will need to wait for an activation email from Rakuten Trade once your account is approved. If you do not receive email from them after one day, try to check the spam or junk box. Their email landed in my spam box last time. You can log in to your account only after you receive this email.
Hope this helps.
Hi, Leckas
Thank you so much for your post n information. This really help me alot as a beginner in trading account. I will definitely use your referral link to register. Really appreciate for your sharing. Hope to see more of your sharing.
Author
Hi, Jeevan.
Glad that this article is helping you. Hope to see you around.
Hi
I am was not being able to do my 1st time login eventhough i habe used the temp password given in the locked pdf file
It stated ERROR 60095
PLEASE HELP ME
Author
Hi, Eida.
Did you use the correct username? The username is not our email address but the one that we key in during the application process.
Otherwise, you have to contact the customer service: customerservice@rakutentrade.my
Or call them at 1800 88 6011 (toll free).
The customer service is available on Monday to Friday 8am to 6pm.
Hi, may I know how do I subscribe right issue in Rakuten Trade?
Author
Hi, Kenick.
You have to go to the CORPORATE ACTION SUBSCRIPTION tab in MY ACCOUNT. You can proceed from there. Do keep in mind that the deadline of Rakuten Trade is earlier than the official date.
For more information, you can go to this link.
Hi, I would like to seek enquiry regarding why the Rakuten Trade chart is different with the chart of Bursa Malaysia? For example (AirAsia 5099 stock code):As I refer from Bursa Malaysia it shown RM 4.++ on Feb-March 2018, however, in Rakuten trade, it shown RM 2.6++ on Feb-March 2018.
Hope to get your explanation soon
Author
Hi, Chris.
I have not realized this before you mentioned this discrepancy. But I have no idea why the chart on Rakuten Trade is wrong. I will try to ask the Rakuten Trade support team first. I will update here once I get the reply. Thanks for pointing this out.
Author
Hi, Chris.
I have gotten the reply from Rakuten Trade.
The difference in the prices is due to the fact that Rakuten Trade has adjusted the stock price by taking into account all the dividend payout. The price that we see on the platform is the adjusted price averaged together with the dividend payout. But I do not know the exact calculation that they use.
They suggest us to use i3investor (Link) if we want to check the exact traded prices.
I will add this as a disadvantage in the article. Thanks for letting us know about this.
Is this safe for long term investment? As what you stated above, the client’s CDS account is held under KIBB Nominees (Tempatan) Sdn Bhd, instead of under his or her own name.
What if one day this Rakuten Trade close down, is all my share will be gone?
Sorry I am new to this.
Author
Hi, ahwei.
It is a good question. And no need to be sorry. It is good to pose questions when you are new to a field. This will save you a lot of mistakes and trouble in the future.
Personally, since Rakuten Trade got a license from Securities Commission, I do not worry about its credibility. Furthermore, Rakuten Trade is a joint venture with Kenanga, so I feel quite assured about its viability.
But it is just my personal view, so I have contacted Rakuten Trade and got their reply.
First, our cash is kept in a separate trust account which is totally different from the company’s account. In the case of dissolution of the company, the money will be credited into our registered bank account.
Second, the purchased shares are parked under CDS account maintained by Bursa Malaysia. Thus, if the company closes down, the shares can be transferred to other brokerage. Actually, our CDS account is held under a company’s name KENANGA NOMINEES (TEMPATAN/ASING) SDN BHD RAKUTEN TRADE SDN BHD FOR [CLIENT NAME]. So, Bursa is still able to identify the owner of the shares.
Basically, Rakuten Trade is safe for trading. Hope you are satisfied with this answer.
Hi, can I withdraw all my money from contra collateral account after 3 days without trade any share? Right now there are some amount still under Trading Outstanding and can’t withdraw that money.
Author
Hi, PSguy.
I think you can do that, provided that you do not have any losses or potential losses. Nonetheless, I am not using the contra account. Thus, if you encounter any problem later, I suggest you to contact customer service.