SGX Online Education Quiz

I received an email from one of the online brokers informing me that I need to complete the Customer Account Review form.  This is in accordance with Monetary Authority of Singapore’s initiatives to provide trading safeguards to Singaporean retail investors, brokers must assess if investors have the relevant knowledge and experience before they can invest in Specified Investment Products.

I heard about this new ruling sometime back but didn't realize that I would have to participate and pass the SGX online quiz in order to maintain my trading account. As this new ruling will take effect from 1 January 2012, I must complete and pass this quiz before end of this month!

I had to read and understand these 7 modules in order to pass the quiz.   You need at least an hour to go through the 7 modules.  The quiz consist of 20 multiple choice questions.  Sounds simple?  Well, simple if you understand what you've read from the online modules.

Module 1:  Introduction
Module 2: Warrants & Options
Module 3: Exchange Traded Funds (ETFs)
Module 4: Exchange Traded Notes (ETNs)
Module 5: Futures
Module 6: Certificates
Module 7: Callable Bull/Bear Contracts (CBBC)

Of the above 7 modules, I'm only familiar with Options and ETFs though I don't know about their features.  SGX and MAS require that retail investors must be aware that Specified Investment Products have structures, features and risks that may be more complex and require more knowledge to understand.

The current list of Specified Investment Products includes:

• Exchange Traded Funds (ETFs)
• Exchange Traded Notes (ETNs)
• Futures (Extended Settlement contracts)
• Structured Warrants
• Futures and Options

More of such products may be introduced to the market in future.

In order to pass this quiz, you need to score a minimum of 18 out of 20 questions.  My first attempt I scored 17 and on my second attempt, I got 16!  I know I should have read the modules and understand them.  At each module, I kept clicking on all the links and the icons but without reading and really understanding them.  I was merely trying to rush through the modules and do the quiz so I took the shortcut way ie just running through the questions and "lucky dip" the answers.

I had to re-sit the quiz yet again and this time, I went through the 7 modules again.  I had to read and comprehend the modules.  This time I made it.  I scored 19 out of the 20 questions!  Yeah!!

Customer Account Review (CAR)

With effect from 1 January 2012, Singaporean retail investors interested in investing in certain investment products must provide some specific information about their qualifications, experience and/or their
knowledge of the products they intend to invest in to enable their broker to properly assess that they have the relevant knowledge or experience to understand the risks and features of the products they intend to continue trading in accordance with the criteria set down by the Monetary Authority of Singapore.

1) Do you hold a degree or diploma in economics, accounting, commerce, actuarial science, finance, financial engineering, financial planning, business studies/business management/business administration or similar?

2) Do you hold any professional finance-related qualifications (CFA, ACCA, or similar)?

3) Have you been employed or are you currently employed by a financial institution (3 consecutive years in the past 10 years), in the development of, sale of, trading of, analysis of investment products, or have work
experience in accountancy, actuarial science, treasury or financial risk management?

Like everything else in Singapore, there are penalties for lying when completing the Customer Account Review.

If you have not answered “Yes” to any of the three questions above, proceed to questions 4.

The questions below is a separate assessment to the trading experience questions already answered in the application process:

4) In the last 3 years please indicate your level of trading activity:

Shares (traded on stock exchanges other than in Singapore):
( ) Less than a total of 6 trades in the last 3 years
( ) More than a total of 6 trades in the last 3 years

Options (traded on the exchanges in the United States or any other international Stock Exchange):
( ) Less than a total of 6 trades in the last 3 years
( ) More than a total of 6 trades in the last 3 years

Futures:
( ) Less than a total of 6 trades in the last 3 years
( ) More than a total of 6 trades in the last 3 years

If you have answered ‘ Less than a total of 6 trades in the last 3 years’ for Futures, Shares or Options, then your broker will not be able to proceed with the opening of your trading account.

However, if you have answered ‘Less than a total of 6 trades in the last 3 years’ to any of the above products, but would still like to proceed with undertaking transactions in that product, you would need to:

register for, undergo and successfully complete the Online Education Programme 

offered by the Singapore Exchange, found at 

https://onlineeducation.sgx.com/specifiedinvestmentproducts/ 

and provide confirmation of the modules attended and successfully 

completed to your broker in order for them to proceed with opening your account.

MAS New Requirements for Retail Investors

With effect from 1 January 2012, the Monetary Authority of Singapore requires intermediaries to assess investment knowledge and experience of retail customers.  This means that an individual who do not possess the following will no longer be allowed to invest without their brokers' assistance ie independent trading!

As part of the Monetary Authority of Singapore’s initiatives to provide trading safeguards to retail investors, brokers must assess if investors have the relevant knowledge and experience before they can invest using Specified Investment Products.


Specified Investment Products have structures, features and risks that may be more complex and require more knowledge to understand.  The current list of Specified Investment Products includes:

• Exchange Traded Funds (ETFs)
• Exchange Traded Notes (ETNs)
• Futures (Extended Settlement contracts)
• Structured Warrants
• Futures and Options

More of such products may be introduced to the market in future.


Click here to learn more about SGX-listed Specified Investment Products.
Click here to log in to or register for SGX’s Online Education Programme.

Melbourne Cup 2011

I made a 250% profit this afternoon!  That's through a "Melbourne Cup 2011 Sweep" game I participated in the office this morning - just for fun!  The horse which I bet on came in 3rd place!  How is that for passive income? 

The way this game is played is similar to lucky dip.  Decide on the amount to bet on as there are 2 types of bets - $2 and $5.  I bought one of each.  Then I dipped my hand into each of the envelopes containing all the horses names - these are the real horses names - and if the horse wins, so will I.

2011 Passive Income

My first 2011 passive income comes from the Singapore Government as announced by the Finance Minister, Tharman Shanmugaratnam on 18 Februay 2011.  These are in the form of:

1. Growth Dividends:  All adult Singaporean ie 21 years and above will get between $100 and $800 to be paid out in May. 
2. Employers will pay 0.5 percentage point more, making it 15% from September.  This goes into Special Account.
3. Medisave top-ups of between $200 and $700.
4. Edusave top up of $130 for students in primary and secondary schools
5. Tax breaks: All tax payers get a one-off personal income tax rebate of 20% this year, capped at $2,000.  From next year, personal income tax rates have been reduced for the first $120,000 of chargeable income.
6. U-save rebates of up to $360 this year.  Households living in one to four room HDB flats will also get an extra month of S&CC rebates.
7. Refund of $110 from TV & Radio Licence fees.