Emperador Inc. Shares on SGX-ST: New 0.1% Stock Transaction Tax and Key Compliance Risks for Retail Investors
Major Changes in Stock Transaction Tax for Emperador Inc. Shares Traded on Singapore Exchange
Retail investors trading shares of Emperador Inc. (EMI) on the Singapore Exchange Securities Trading Limited (SGX-ST) should take urgent note: the Philippine Bureau of Internal Revenue (BIR) has imposed a Stock Transaction Tax (STT) at 0.1% of the gross selling price (down from 0.6%). This change is effective from 01 July 2025, following the passage of Republic Act No. 122141, the Capital Markets Efficiency Promotion Act (CMEPA).
Key Compliance and Operational Details for Retail Shareholders
- Who pays STT? The STT is a final tax and is payable by the seller of EMI shares. It will be collected and withheld by Singapore brokers at the settlement date.
- How is STT remitted? Singapore brokers may remit the STT to the BIR either through BDO Securities Corporation (BDO), the appointed receiving and remitting agent, or via other channels such as affiliated Philippine brokers.
- Which brokers are onboarded with BDO? A significant list of brokers—including CGS-CIMB, Citigroup, CLSA, DBS Vickers, iFAST, JP Morgan, KGI, Lim & Tan, Macquarie, Maybank, OCBC, Philip Securities, Tiger Brokers, UBS, and UOB Kay Hian—are currently onboarded with BDO. Note that DBS Vickers does not offer trading in EMI shares to retail clients.
- Risk of disruption: If a broker’s arrangement with BDO is terminated, or if BDO ceases to act as the receiving agent, brokers must provide alternative payment methods for STT. Failure to do so may result in shareholders being unable to trade EMI shares on the SGX-ST.
- Legal and contractual risks: Non-compliance with STT payment or remittance may result in a breach of law and/or contract.
Potential Price Sensitive Issues for Shareholders
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Liquidity and Trading Access Risks: If any broker fails to provide an alternative STT payment mechanism after BDO’s arrangement is terminated, shareholders may temporarily lose access to trade EMI shares. Such disruption could affect liquidity and trigger volatility in share price, especially if a large broker is involved.
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Regulatory Compliance: The risk of non-compliance might affect investor confidence in trading EMI shares on SGX-ST. Any regulatory breach or complication in STT remittance could have a negative impact on share value.
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Additional Fees and Charges: Brokers may impose additional charges for collecting and remitting STT, impacting the net returns for shareholders. Investors should consult their brokers for details on these charges.
Investor Actions Required
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Consult Your Broker: Retail investors must check with their brokers about the current arrangements for STT payment and remittance, including any additional fees.
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Stay Informed on Regulatory Changes: Monitor official EMI announcements and broker communications for any changes in STT collection processes.
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Legal and Tax Advice: Investors are strongly advised to consult professional advisers about the implications of STT and any other tax, legal, or regulatory considerations regarding EMI shares held on SGX-ST.
Summary
The new 0.1% STT regime for EMI shares traded on SGX-ST is a significant regulatory change that affects all sellers. Compliance with collection and remittance requirements is crucial to avoid legal risks and trading disruptions. Retail investors should be aware of liquidity risks if broker arrangements change, and must remain proactive in communicating with their brokers.
Disclaimer: This article is for informational purposes only and does not constitute investment, tax, or legal advice. Investors should conduct their own due diligence and consult with professional advisers before making any investment decisions or taking action based on the information provided here.
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