The price of a share is not the only cost of a trade. Bursa Malaysia lists the charges a client pays when shares are bought or sold, and knowing them makes it easier to compare brokers' rate cards.

The three main charges on a share trade

According to Bursa Malaysia, transaction costs include brokers' commission, stamp duty and clearing fees. They are paid in addition to the cost of the shares themselves.

The clearing fee and stamp duty are payable by both the buyer and the seller, so you pay them whether you are buying or selling.

Brokers' commission

Commission is the broker's own charge, so it differs from firm to firm. Under Bursa Malaysia's commission rules (Schedule 6), commission on online routed trades is fully negotiable, with no set minimum or maximum. The same applies to trades paid for by cash upfront and to direct business transactions.

For other trades in board lots, commission is negotiable but subject to a minimum fixed commission and a maximum of 0.7% of the contract value.

Because commission is negotiable, each broker publishes its own rates. When reading a rate card, look for the percentage charged, any minimum charge per trade, and whether online and dealer-assisted trades are priced differently.

Clearing fee and stamp duty

The clearing fee for an on-market trade is 0.03% of the transaction value, up to a maximum of RM1,000 per contract. There is no minimum fee.

Stamp duty on shares is RM1 for every RM1,000 of transaction value, or part of RM1,000, up to a maximum of RM1,000. For marketable securities the rate is the same, but the maximum is RM200.

As an example, on a RM10,000 purchase of shares the clearing fee is RM3 and the stamp duty is RM10. The broker's commission comes on top of these.

How to check that your broker is licensed

Low fees mean little if the firm is not allowed to deal with you. Before opening an account, check the firm on official sources.

Search the firm, and any representative who contacts you, on the SC Investment Checker at sc.com.my/investment-checker. It shows whether a person or company is licensed or registered with the Securities Commission Malaysia (SC).

Bursa Malaysia also publishes a list of brokers for equities on bursamalaysia.com.

Check the SC Investor Alert List, which names unauthorised entities. The SC says the list is not exhaustive, so a firm missing from it is not automatically authorised.

SmartChecker shows register records and reviews for the companies it lists, with links to the official sources.

Common questions

Is brokerage commission fixed in Malaysia? No. For online routed trades, Bursa Malaysia's rules make it fully negotiable, so each broker sets its own rates.

Do both the buyer and the seller pay stamp duty? Yes. Bursa Malaysia states that stamp duty and the clearing fee are payable by both the buyer and the seller.

Is there a cap on the clearing fee? Yes. For on-market trades it is 0.03% of the transaction value, up to RM1,000 per contract.