DFNN.com launches credit system for stock trading

The Internet-based Diversified Financial Network Inc. (DFNN.com) has launched an innovative credit system for trading at the Philippine Stock Exchange, the company said in a disclosure statement.

The scheme involves the issuance of credit cards through its bank partner Union Bank, in an effort to "increase awareness and interests in online trading with DFNN’s broker-clients."

Under the scheme, DFNN will refer a card applicant to Union Bank for approval, upon which the new cardholder will be required to open an online account with DFNN through any of its broker-clients.

Once completed, DFNN will be able to purchase directly in the name of the card member – with his consent – an initial 100 shares of DFNN, one of the newly listed stocks at the PSE.

As a promotion similar to a rewards system in other credit cards, DFNN will also reward its cardholders with additional shares at a ratio of one share for every P1,000 spent, up to a maximum of 100 shares.

The company said this promotion will run from March 1 to June 30 this year and was approved by the Department of Trade and Industry.

Once the card member receives his shares, he can trade it online or offline at his convenience. He can also use his trading account to buy and sell other listed shares aside from DFNN.

Moreover, all transaction costs like the documentary stamp tax, and fees for the use of PCD, SCCP and Eqtrade facilities will be shouldered by DFNN.

DFNN will earn from a portion of the annual fee as well as a share of the spending by the cardholder, the company stated.

DFNN earned the distinction of being the first fully operating web-based company to list its shares at the PSE last Oct. 30, 2000. Its IPO price was pegged at P10 per share.

Established in June 1999 with an initial capitalization of P30 million, DFNN initially provided on-line stock trading services to PSE-member clients such as Mark Securities, All Asia Securities, Vickers Ballas, and Anscor Hagedorn Securities, on top of its own trading house Diversified Securities.

The firm soon expanded into an integrated application service provider (ASP) offering a host of financial and information services, as well as forging tie-ups with strategic partners, including philstar.com, the online arm of The Philippine STAR.

DFNN provides software technology to financial institutions, allowing them to offer transactional services to their clients over the Internet. Moreover, through its website, the company provides users free access to timely news, general stock market and macroeconomic indicators, including technical charts, graphs and research reports.