MAS - INVESTMENT KNOWLEDGE FOR RETAIL INVESTOR (1 JAN 2012)

[ngtfook]

Hi,

Take notice that MAS new ruling on retail investor on SIP product will take effect from 1Jan2012. For those who did not pass the new ruling will not be able to trade CFD and other investment product. Do check with your broker accordingly.

RayNg




MAS REQUIRES INTERMEDIARIES TO ASSESS INVESTMENT KNOWLEDGE AND EXPERIENCE OF RETAIL CUSTOMERS

http://www.mas.gov.sg/news_room/press_r ... omers.html
28 July 2011…
The Monetary Authority of Singapore (MAS) has introduced new requirements for intermediaries to formally assess a retail customer's investment knowledge and experience before selling certain investment products to the customer.

2 These new requirements will apply to the sale of Specified Investment Products (SIPs), which are all investment products other than those listed in the Annex1. These include listed SIPs such as futures and exchange traded funds, and unlisted SIPs such as investment linked insurance policies.

3 Under the new measures, intermediaries must conduct a Customer Knowledge Assessment to assess whether a customer has the relevant knowledge or experience to understand the risks and features of an unlisted SIP. In the case of listed SIPs, intermediaries have to conduct a Customer Account Review to ascertain whether the customer has the relevant knowledge or experience to understand the risks and features of complex structures or derivatives, before approving the customer’s account to trade such products. The intermediary will inform the customer if he is assessed not to possess the relevant knowledge or experience. If the customer still intends to proceed with the transaction, the intermediary must offer advice to the customer. MAS will not allow “execution only” service in such cases. Safeguards, such as a lower trading limit than what the intermediary would otherwise have imposed, will also be put in place before the customer is allowed to proceed with the transaction. Intermediaries must comply with the new requirements in their dealings with all customers, new and existing.

4 MAS has introduced these stronger measures and enhanced requirements to further safeguard customers’ interests. We aim to ensure that intermediaries recommend suitable investment products to customers, particularly those who may not have the relevant investment knowledge or experience.

5 The new requirements follow from MAS’ consultation paper on the Regulatory Regime for Listed and Unlisted Investment Products that was published on 28 January 2010, and MAS’ subsequent response to feedback received that was issued on 21 October 2010.

6 The requirements will come into effect on 1 January 2012 and will be introduced by means of a new Notice on the Sale of Investment Products [Notice No. SFA 04-N12] and a new Notice on Recommendations on Investment Products [Notice No. FAA-N16]. A transition period of five months will be provided for intermediaries to put in place the necessary processes to meet the requirements. In the meantime, intermediaries intending to sell SIPs should start adopting the proposed measures as good practice in conducting business with customers. MAS has also issued a guide to help consumers understand the requirements and what they can expect from their financial institutions when purchasing SIPs.

7 In line with the new requirements, all representatives who deal in or provide advice on SIPs must pass additional examinations on product knowledge and analysis. MAS is working with the Institute of Banking & Finance and the Singapore College of Insurance to introduce the additional examinations by end 2011.

[zipink]

I took the test here:

http://www.sgx.com/onlineeducation/spec ... ntproducts

You need to pass at least 18 out of 20 questions.

Just because I do not have a relevant paper qualifications and working experience in the financial industry. The MAS deemed me as inexperienced and not qualified.

Not exactly easy, but if you have decent memory, you should be able to pass. I got 18/20. So, I am qualified now to invest/trade/buy those SIPs (Specified Investment Products).

Well, to be frank... I still do not really understand what are Callable Bull / Bear Contracts (CBBCs). Well, not an issue for me... if I don't understand what the derivatives are, just stay clear.