Luna Securities [link] is now offering a broker’s commission of just 0.12% as part of its “commission revolution” meant to encourage more frequent trading from retail traders. Luna Securities also offers a maintaining balance of just P500. According to their President, Luna Securities is “trying to take away as many barriers... You can open an account in just five minutes, you can put in a minimum of P500, and we are rationalizing commission.” Broker’s commissions were locked at P0.25% up until the SEC removed the mandatory minimum and allowed brokers to set their own commission levels. The P0.12% offered by Luna Securities is the lowest commission in the Philippines.
MB BOTTOM-LINE: Running a brokerage is a tough game, but I’m all for companies that make it easier and cheaper for retail traders to execute trades. If we are going to insist on having a ridiculous number of brokerage houses relative to our total number of active accounts, it’s better for all of us to see some of those brokerage houses experimenting with profitability sliders in ways that might encourage greater participation. Lower fees were part of the great retail expansion in US stock trading back in the 2000s with E*Trade, with further expansion found in the commission-free trading (and fractional shares) offered by Robinhood and other discount brokers. Will it make any of the existing players adjust their fees? That depends on the market response to this move. I don’t have any first-hand knowledge of the platform or the people behind the business, so I’m curious to see how this story will evolve through this bull run.
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