CKA & CAR

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, Forex and Contract For Difference products), before offering the products.

Phillip Futures will conduct two assessments – Customer Knowledge Assessment (CKA) and Customer Account Review (CAR). Retail customers are required to satisfy the criteria of the assessments before they can proceed to invest/trade in SIPs.

 

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

  1. Futures
  2. Options
  3. Leveraged Forex/Bullion
  4. OTC metals
  5. Contract For Difference (CFD)

For learning modules on Listed SIPs (Futures, Options), you may click here

For learning modules on Unlisted SIPs (Leveraged Bullion/CFD/Forex/OTC Metals), you may click here. 
Note:

  • Module 1: CFD
  • Module 2: Bullion/Forex/OTC Metals

We will request information on your educational, work and investment experience through the Customer Knowledge Assessment and Customer Account Review.  Based on this information, we will assess if the level of risk inherent in trading leveraged products is appropriate for you.

  • Customer Knowledge Assessment (CKA)  = Eligible to trade Forex and OTC products, subject to final approval.

    Customer Account Review (CAR)  = Eligible to trade Futures & Options, subject to final approval. 

 

Assessment Criteria CKA CAR
Done 6 or more transactions in Futures and Options (Exchange Listed) products in the past 3 years  
Done 6 or more transactions in Leveraged Forex/Bullion/OTC Metals in the past 3 years  
Obtained a Pass in SGX Online Education on Specified Investment Products  
Obtained a Pass in ABS-SAS Learning Module on Foreign Exchange Margin Trading  

Have a diploma or higher qualification in relevant courses such as

  • Accountancy
  • Economics
  • Actuarial Science
  • Finance
  • Business
  • Financial Engineering
  • Capital Markets
  • Financial Planning
  • Commerce
  • Insurance
  • Computational Finance
Have a professional finance-related qualification (e.g CFA, AFP, CPA/ACCA)
Have a minimum of 3 consecutive years of working experience in the past 10 years in the development of, structuring of, management of, sale of, trading or, or research and analysis of investment products or the provision of training in investment products. (Work experience in accountancy, actuarial science, treasury or financial risk management may also be considered relevant experience)

 

Resources

Below is a non-exhaustive list of web resources and guides that provides information on the MAS new requirements and how the Customer Knowledge Assessment and Customer Account Review affects you.

  1. MAS – Safeguards When Purchasing Specified Investment Products
  2. MAS – Notice on the Sale of Investment Products [Notice No. SFA 04-N12]
  3. MAS – Notice on Recommendations on Investment Products [Notice No. FAA-N16]
  4. MoneySense – Understanding and Trading Specified Investment Products
  5. Key Questions To Ask The Person Recommending An Investment Product To You
  6. Key Questions You Should Ask Yourself Before Buying An Investment Product

Frequently Asked Questions

  1. What are Specified Investment Products (SIP)?
    Specified Investment Products are products that have structures, features and risks that may be more complex in nature. The current list of Specified Investment Products can be found here.
  2. Is it compulsory to complete the CKA & CAR Assessment? What if I don’t?
    Yes it is compulsory. MAS new measures require Phillip Futures to assess all existing clients of their investment knowledge and experience.

    The Customer Account Review (CAR) enables us to assess if you have the relevant knowledge or experience to trade in listed SIP products. 

    The Customer Knowledge Assessment (CKA) enables us to assess if you have the relevant knowledge or experience to trade in unlisted SIP products.

  3. How can I be considered to have the relevant knowledge and experience to trade Specified Investment Products?
    Please refer to our Assessment Criteria table above for a detailed explanation.
  4. How often will I need to go through the Customer Account Review or Customer Knowledge Assessment? How long is a “pass” valid for?
    The Customer Account Review will be conducted every 3 years, while the Customer Knowledge Assessment will be conducted every year.
  5. Does my previous trading experience with other brokerages count towards the Assessment?
    Yes, previous transactions done with other brokerages will count towards your relevant trading experience in the Assessment. For Phillip Futures new clients, you may self-declare on the account opening form during your application.
  6. I have already gone through the CKA or CAR with another brokerage, do I need to go through the Assessment with Phillip Futures again?
    Yes. The Assessment is done on an individual basis, and each brokerage will exercise due diligence and conduct their own CKA & CAR Assessment as part of Know Your Client (KYC) guidelines.
  7. Can I continue trading CFD/Forex/Futures if I fail the assessment?
    For listed SIPs (e.g. Futures), you will be qualified to trade if you pass the SGX Online Education Quiz.

    For unlisted SIPs (e.g. Leveraged CFD/Forex), you will be qualified to trade if you pass the ABS-SAS assessment on CFD/Foreign Exchange Margin Trading respectively.

  8. I have 6 transactions in Futures, can I also trade Forex (vice versa)?
    If you have trading experience in Futures but not in Forex (or vice versa), we will need to review other areas of your profile to ensure that you are suitable to trade in Forex/Futures. This is because the assessment conducted for listed and unlisted products is slightly different.
  9. I attended your seminar/1-to-1 coaching session, can I be considered to have investment knowledge? Can I be exempted from the SGX E-learning programme?
    For the trading of listed products, third party assessment is necessary. The SGX Online Education Programme is the standardised benchmark stipulated by MAS to assess investment knowledge. You are strongly encouraged to pass the quiz for knowledge assessment: http://www.sgx.com/onlineeducation/specifiedinvestmentproducts
    For unlisted products, ABS-SAS E-learning Portal is a standardised benchmark stipulated by MAS to assess investment knowledge. You are strongly encouraged to pass the quiz for knowledge assessment: http://sips.abs.org.sg/.
  10. How do I update my CKA/CAR status?
    You may update your status using the Client Portal or submit a completed Update of Particulars Form (not applicable to accounts opened online) to us. After a review, we will notify you of your assessment outcome.