(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
Hi I was wondering about the portfolio page – it shows the avg buying price and unrealized P/L. However I noticed that, the calculations do not take into account the brokerage fees + Stamp Duty. Thus, it would not have reflect actual cost incurred and unrealised gains/losses. Is there any where within the platform that provides such info or do I have to keep track myself? I only use Rakuten, curious to know how other platforms project this? Thanks!
Author
Hi, gwc.
I am afraid you will have to keep track of the cost on your own. That is what I have been doing. I just use the data on the platform as a reference.
I have another account with RHB TradeSmart and it displays profit/loss in the same manner as Rakuten Trade. I am not too sure about the other platforms though.
Thanks for clarifying!
Author
You are welcome.
For the dividend payments, you means it will transferred to our Rakuten account instead of our Bank account? I will appreciate if you can reply
Author
Hi, CX.
Sorry for the late reply. Your message was marked as a spam and I overlooked it.
Ya. The cash will not go into our bank account due to the trading account on Rakuten Trade being a nominee account.
Hi there,
When I wanted to buy a stock, of 400 lots. It says Order amount exceeded trade limit.
However, I know that I have enough money in it.
Can you explain what went wrong?
Author
Hi, Janice.
Just to be sure, do you mean to buy 40000 shares? Or is it 400 shares? Otherwise, do you still have any outstanding transaction? Or is there any other details that you could furnish without revealing any personal details? I personally have not encountered this issue yet. So, I do not have a ready answer for you. Sorry about this.
Hi Leckas,
I face the same problem. When i trying to purchase 50,000 units at their iSPEED.my apps it will show the Error message “Order amount exceeded trade limit”. I did not have any outstanding amount and my trading limit is sufficient to purchase.
Can you advise on this? thank you.
Author
Hi, Ray.
I think sometimes the apps may be overwhelmed due to high transaction, thus causing the error that you are facing. Are you still having the same problem now?
And just to confirm. You keyed in 50 in the Quantity (x100) row in the apps to purchase 50,000 shares right?
How long usually does it take to transfer your shares money to your balance acc. I’ve been encounter this problem right now. I have money to trade but i can’t withdraw it.
Author
Hi, Sam.
I think you have the same problem with Jason. For every transaction, it takes 3 working days to process. For the money to be withdrawn, no purchase should be done during this period. Thus, I think you need to wait for at least 3 days after your last transaction before you can withdraw the money.
Hope this answers your question.
[As confirmed with Rakuten Trade, this comment is not posted by them. Please do not mislead others.]
I’ve been using Rakuten Trade since the end of 2017 and I just realized today that it’s not under Bursa’s list of registered brokers (trading participants) here: https://www.bursamalaysia.com/trade/trading_resources/brokers_for_derivatives/list_of_trading_participants
It is said that to be 100% risk-free it’s best that your trading platform is included on the above list. In the case of an unlikely event, such as the bankruptcy of your brokerage company, at least your investment are protected (similar to how PIDM protect a bank’s customer).
I understand that Kenanga Futures Sdn Bhd is in the list but it’s an entirely different company if we look at the corporate structure of Kenanga Investment Bank Bhd: https://kenanga.com.my/who-we-are/corporate-structure/
How safe are we in a highly unlikely event (remember Lehman Brothers in 2008)?
Any thoughts on that? Thank you in advance for your valuable input!
Author
Hi, Kar Weng.
Thanks for the thorough research. As for its safety, perhaps you can refer to point 1 of this article (Link). If Rakuten Trade goes into insolvency, it will instruct the clients to transfer out the shares to another brokerage. Transfer fee will have to be paid to Rakuten Trade which will later be paid to Bursa CDS Sdn Bhd.
I share your concern regarding the safety of our investment. But I believe with the safeguard implemented, it should be sufficient to protect us. If you need further confirmation, I suggest you to contact Rakuten Trade customer service. It might carry more weight if the information comes from the official source.
Hope this answers your question. Thanks once again for this thoroughly-researched question!
Thanks for your input and keep up the good work!
Author
Welcome. Thanks for the encouragement!
Hi Leckas, just to update you, sorry I was actually on the wrong list for futures trading. Refer to the correct one (brokers for equities) here: https://www.bursamalaysia.com/trade/trading_resources/brokers_for_equities/list_of_participating_organisations
KENANGA INVESTMENT BANK BHD is in the list stated above. Based on their corporate structure it is the parent company of Rakuten Trade Shd Bhd (though only 50% since it’s a JV with Rakuten Japan), so I’m sure that gives us more assurance! Due to the nature of this JV I’m not sure if RT will ever be officially included on the list above, but it seems like we’re in safe hands.
You may refer here for the corporate structure: https://kenanga.com.my/who-we-are/corporate-structure/
Hope that clear things up to anyone who could be reading!
Author
Hi, Kar Weng.
Thanks for the clarification.
Let’s say I queued sell at 0.015. If the whole day no one buys at 0.015, then the sell order (assuming it’s a GTD order instead of a DAY order) will become a New-AMO (after market order) again. So I wonder, in the next day do we get priority in the queue (i.e. to continue our queue from yesterday rather than to to queue all over again) as compared to others who made the order later than us, if the buyers are limited?
Author
Hi, Woo.
Merina had the same question as you quite some time ago in another article. I will just quote the answer back then.
“Although the order is refreshed on the platform daily, the queue in Bursa is not reset everyday. So the priority is still maintained in Bursa.”
Hope this clarifies.
I was looking online on the markets that Rakuten covers but could not find the information. Can you advise if I can trade the US market with Rakuten?
Author
Hi, Jason.
We can only use Rakuten Trade to trade on Bursa Malaysia. It does not allow trading of foreign stocks. So we cannot use it to trade on the US market.
May I know how to perform a stop-loss order?
Author
Hi, Henry.
I am not too sure about this. I will get back to you after I have the answer from Rakuten Trade.
Author
Sorry to tell you that this function is not available on Rakuten Trade.