What is CKA and CAR
Monetary Authority of Singapore (MAS) has introduced new requirements to provide safeguards to retail investors who wish to trade Specified Investment Products (SIPs), with effect from 1st Jan 2012.
In accordance, financial institutions like Phillip Futures will be assessing our customers on their relevant knowledge or experience of such SIPs (Futures and Forex products), before offering the products.
Phillip Futures will conduct two assessments - Customer Knowledge Assessment (CKA) and Customer Account Review (CAR) through our
CKA & CAR Assessment Form.
Retail customers are required to satisfy the criteria of the assessments before they can proceed to invest/trade in SIPs.
The results of these assessments will only affect your ability to trade SIPs starting from 1st Jan 2012.
What are SIPs
Specified Investment Products are likely to contain derivatives, and may have features, and
risks that can be more difficult for retail consumers to understand. Examples include structured
notes, exchange traded funds, exchange traded notes, investment linked insurance policies,
warrants and options, futures, and certificates.
All of Phillip Futures' product offerings fall under the SIP category. This includes but is not limited to
- Futures
- Options
- Leveraged Forex/Bullion
- OTC metals
Download the full list of products classified as SIP here.
What are the new requirements
The following two new measures will apply to you if you wish to trade SIPs:
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(i) Assessing if you have relevant knowledge and experience
From 1 January 2012 onwards, intermediaries must assess if you have the relevant knowledge and experience before offering a Specified Investment Product to you or opening an account for you to trade Specified Investment Products.
To do this, the intermediary will request information on your educational qualifications, investment experience and work experience.
Based on the information you have provided, the intermediary will assess whether you may proceed to trade Specified Investment Products.
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This new process is known as
- the “Customer Account Review” if you wish to open an account to trade Specified Investment Products listed on an exchange; and
- the “Customer Knowledge Assessment” if you wish to purchase a Specified Investment Product that is not listed on an exchange.
How do I complete the Customer Account Review & Customer Knowledge Assessment?
If the intermediary assesses that you do not have the relevant knowledge or experience to trade Specified Investment Products, see the following.
Listed SIPs (Futures, Options): You may wish to undergo learning modules to learn more about SIPs
Unlisted SIPs (Leveraged Forex, Bullion, OTC Metals): You will be offered advice (Refer to point (ii) below)
For existing customers: As of 1 January 2012, if you have an existing account and wish to continue trading Specified Investment Products through the account, the intermediary will be required to conduct a Customer Knowlege Assessment(CKA) & Customer Account Review(CAR) before allowing you to proceed. Your intermediary may therefore contact you before 1 January 2012 to seek information for the Customer Knowlege Assessment(CKA) & Customer Account Review(CAR).
(ii) Offering you advice
Intermediaries must offer to provide you with advice on whether the Specified Investment Product is suitable for you, taking into account your knowledge and experience in the product.
If you decide not to take up the offer of advice or to invest in a Specified Investment Product that the intermediary did not recommend to you, you will have to be responsible for your own investment decision.