Quarter of Singtel special discounted shares sold ahead of CPF Board transfer

[SINGAPORE] The planned transfer of Singtel Special Discounted Shares (SDS) from the Central Provident Fund (CPF) Board directly to holders’ Central Depository (CDP) accounts remains on track for Nov 21, with a quarter of all SDS already sold.

As at Aug 31, around 180 million shares have been sold in total, Singtel and CPF Board said on Thursday (Sep 17).

Around 163,000 SDS holders, representing about 27 per cent of all SDS holders, sold their stakes. More than 60 per cent of those who chose to sell did not possess an individual CDP account prior to the transaction.

Since the initial announcement of the planned transfer in April, Singtel and CPF Board noted that more than 117,000 walk-in enquiries and transactions have been processed across 36 SingPost branches islandwide.

“The daily waiting time on average at SingPost branches has improved from 3.5 minutes in the first month when the exercise was announced, to about two minutes,” they said.

The dedicated SDS hotline has also handled more than 15,000 calls, with around 120 calls daily on average. They also noted that the Agency for Integrated Care conducted house visits to more than 11,000 older SDS holders to assist those who may be less digitally savvy.

Investors who wish to retain their Singtel SDS do not need to take any action, as their shares will automatically move into individual CDP accounts on Nov 21, Singtel and CPF Board said.

For holders without an existing CDP account, a designated CDP account will automatically be created in their name to hold and manage the shares.

CPF withdrawal restrictions remain waived for Singtel SDS sales proceeds, even for sales after the transfer, and SDS holders will be able to withdraw sale proceeds in cash.

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Legacy scheme

The SDS scheme is a legacy scheme that dates back to Singtel’s 1993 initial public offering. Launched as a national asset enhancement initiative, it aimed to give Singaporeans a direct stake in the country’s economic success.

Unlike other Singtel ordinary shares, SDS are currently held in trust by the CPF Board on behalf of investors.

The government had embedded a loyalty programme into the scheme to discourage investors from immediately flipping discounted shares for profit. Investors who kept their stock would receive free loyalty shares over time.

These were distributed in 10 per cent increments across four qualifying dates, giving long-term holders an additional 40 per cent of their original shareholdings for free.

The transfer, announced after the first reading of the CPF (Amendment) Bill in Parliament on Apr 7, intends to give 615,000 retail investors unfettered control over their holdings – including immediate access to cash proceeds if they choose to sell.