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Where would CPF money go if it is nominated to a bankrupt? When Madam Lim Lye Kiang sought to claim the $102,000 from CPF which her late sister had left her, she would never have expected that the CPF Board transferred the money to the OA (Official Assignee) to...

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Why you should not buy IPOs As Sheng Siong is launching its IPO next month, I expected a few calls as whenever an IPO is launching. And if you are my client, you know my answer. I decide to write this article so everybody can benefit...

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Questions to ask your Financial Adviser Every Sunday morning when I flip open the newspapers, I always see articles or advertisements regarding "Financial Advisers". Nowadays, just like the once prestigious word "Banker", which is misused in...

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Revision to Nomination of Insurance Nominees Regulation With the onset of the Mental Capacity Act ("MCA") coming into effect on 1st March 2010, the Insurance (Nomination of Beneficiaries) Regulations 2009 ("the Regulations") will be amended to effect 2 changes: The...

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The ABCs of the Financial Advisers Act The title, Financial Adviser, is always mis-used in the industry and misunderstood by the consumers. On 10 October 2002, the Financial Advisers Act came into effect and all financial institutions are...

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How Does MAS New Requirement of Customer Knowledge Assessment (CKA) and Customer Account Review (CAR) Affects You

Posted by Ivan Guan | Posted on 28-12-2011

Category : Financial Industry Update

Tags: ,

With effect from 1st January 2012, the Monetary Authority of Singapore (MAS) will require all financial institutions to ascertain whether their clients possess the necessary knowledge or experience on the features and risks of the products that they intend to trade through the prescribed Customer Knowledge Assessment (CKA) or Customer Account Review (CAR).

The requirement will apply to all Specified Investment Products.

Specified invest products includes the following products: Stock listed on an exchange outside of Singapore, Futures contracts, Exchange Traded Options, ETFs, CFDs, FX Spot and FX options.

How will they affect you?

The following two new measures will apply to you if you wish to purchase a Specified Investment Product or open an account for trading Specified Investment Products:

(i) Assessing if you have relevant knowledge and experience

From 1 January 2012 onwards, intermediaries (your brokers and advisers) 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 listed on an exchange.

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 purchase an unlisted Specified Investment Product or open an account to trade listed Specified Investment Products.

This new process is known as

  • the “Customer Account Review (CKR)” if you wish to open an account to trade Specified Investment Products listed on an exchange; and
  • the “Customer Knowledge Assessment (CKA)” if you wish to purchase a Specified Investment Product that is not listed on an exchange.

If the intermediary assesses that you do not have the relevant knowledge or experience to purchase the unlisted Specified Investment Product or to open an account to trade listed Specified Investment Products, they may suggest that you undergo learning modules to learn more about Specified Investment Products.

(ii) Offering you financial advice

Intermediaries must offer to provide you with financial advice on whether the Specified Investment Product is suitable for you, taking into account your knowledge and experience in the product. (Only intermediaries that are authorized by MAS to provide financial advice may do so)

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.

What Information is required for the assessment?

The information required from you to evaluate relevant knowledge or experience would be as follows:

  • Educational Qualifications (diploma or higher qualification in relevant course and/or Professional Finance related qualifications)
  • Work Experience (worked at least 3 consecutive years in the past 10 years in a relevant field)
  • Investment Experience (have made at least 6 transactions within the last 3 years in these categories of products)

For more information and background on the new requirements for Specified Investment Products, you can refer to MAS guide which can be found here.

Policy Owners’ Protection Scheme

Posted by Ivan Guan | Posted on 29-08-2011

Category : Financial Industry Update

Tags: , ,

Singapore Deposit Insurance Corporation (SDIC) will operationalise a new legislative provision for the setting up of a Policy Owners’ Protection Scheme (PPF) on 1 September 2011. The PPF protects policy owners in the event a life or general insurer which is a PPF Scheme member fails. The PPF Scheme provides 100% protection for the guaranteed benefits of your life insurance policies, subject to caps where applicable.

For example, for individual life and voluntary group life policies, there are aggregate caps applicable, namely S$500,000 for the guaranteed sum assured and $100,000 for the guaranteed surrender value per life assured per insurer.

The PPF Scheme also provides 100% coverage for the types of general insurance policies covered under the Scheme. No caps are applicable for protection of your general insurance policies.

SDIC will be making a major announcement of their new Corporate Identity, to take into account their enlarged role of managing both the Deposit Insurance Scheme (for banks) as well as the PPF (for life and general insurers).

SGX reducing bid size details

Posted by Ivan Guan | Posted on 18-07-2011

Category : Financial Industry Update

Tags:

This is old news, but I think it is good to highlight some details here. Singapore Exchange (SGX) has reduced the minimum bid size for securities on 4 July 2011, leading to lower trading costs for investors.

To cater to the narrowing of the bid sizes, SGX will widen the Forced Order Range for all securities to +/- 20 bids from +/- 10 bids across all price ranges. Forced Order Range is a pre-execution mechanism which helps investors to avoid error trades when entering prices of orders. Any orders outside the Forced Order Range must be confirmed by the use of the Forced Key function before those orders can be submitted.

The revised Minimum Bid Size and wider Forced Order Range will apply to all securities traded on SGX except exchange traded funds, loan stocks and bonds.

Please refer to Appendix 1 for details of the changes and Appendix 2 for an illustration of cost savings for investors.

…Read the entire entry

Trading of Singapore govt bonds at SGX

Posted by Ivan Guan | Posted on 09-06-2011

Category : Financial Industry Update

Tags:

From July 8, you can buy and sell Singapore Government bonds on the Singapore Exchange (SGX).

The bonds are Singapore Government Securities (SGS), debt instruments issued by the Government. They take the form of Treasury bills (T-bills) or bonds.

Since 2009, retail investors have been able to take part in the SGS auctions via ATMs in minimum amounts of $1,000, but to trade them subsequently, they had to do so at selected banks.

SGX said on Wednesday that investors will now be able to get SGS bond prices on SGX’s website or through brokers, and trade SGS bonds through their brokers in a manner similar to trading stocks.

SGX added that a total of 19 notes maturing in two years or more, totalling $74 billion, will be available for trading.

Source: Straits Times

More information about Singapore Government Bonds can be found at http://www.sgx.com/fixedincome/sgs

Singapore could be next offshore renminbi trading hub

Posted by Ivan Guan | Posted on 28-05-2011

Category : Financial Industry Update

Tags: ,

Chinese authorities recently announced that a third Renminbi clearing bank would be established in Singapore after BoC (HK) and BoC (Macau). This would provide an important foundational element for an eventual offshore RMB trading platform as it would allow local banks to deposit RMB reserves locally and facilitate cross-border RMB trade settlements- both of which currently require the use of a Hong Kong platform.

The developments also indicate that Singapore will be the first jurisdiction outside of Hong Kong to see the offshore deliverable RMB market exparenmimbi and offshore renmimbi market regime currently in place in Hong Kong, rather than create separate competing systems as this is already freely transferrable offshore.”

Huge Interest

Since inception last August, the pace of organic growth of the CNH market has been rapid and sustained. The CNH deposit base grew at a 251% annualized pace, to over CNH 450 bn by the end of March, putting it on track to reach CNH800 bn – 1.2 trn by year end.

Liquidity has grown at a 27% monthly pace with spot USD-CNH seeing around USD1 bn daily turnover. It is expected to eclipse the non-deliverable forward (NDF) market in liquidity in the coming few years as the overall deposit base of CNH increases.

Cross-border trade settlement reached RMB 360bn, or 7% of total trade in the first quarter of 2011, having grown from 5% in the final quarter of 2010 and gross bond issuance has clocked RMB 48 bn in 68 issues this year, surpassing 2010’s issuance.

Popular Products

Singapore investors benefit from this move. Since second half of last year. I’ve seen many RMB related products launched. Many fund houses started to launch RMB dominated funds. Even the world largest alternative asset manager MAN AHL has just launched a new RMB class.

The other big growth area is CNH Bond Market. While most of the products were only available to Accredited Investors, UOB has opened doors to retail investors with their United RMB Bond Fund

SGX to launch rubber future

1

Posted by Ivan Guan | Posted on 07-05-2011

Category : Financial Industry Update

Tags:

CNA : The Singapore Exchange (SGX) will list rubber futures on its derivative platform starting May 16.

The move will transfer the listing of the rubber futures on the Singapore Commodity Exchange (SICOM) onto the SGX trading platform.

This will open up the products to a wider pool of international traders, which will promote greater participation and liquidity.

This is part of wider plans by SGX to bring all commodities contracts onto one single trading platform.

Currently, two rubber futures contracts are traded on SICOM.

With effect May 16, Technically Specified Rubber 20-grade contracts that are traded over-the-counter, will also be cleared by SGX AsiaClear.

-CNA/wk

New Code of Conduct for Singapore Private banking industry

Posted by Ivan Guan | Posted on 06-04-2011

Category : Financial Industry Update

Tags:

Singapore’s Private Banking Advisory Group (PBAG) today unveiled a new Code of Conduct to promote high standards in the country’s rapidly-growing private banking industry.

Under the code, private bankers in Singapore will be expected to pass a new competency assessment regime called the Client Advisor Competency Standards (CACAS) before they provide any financial advice to clients in the Southeast Asian island city-state, which in the last few years has become a regional banking hub.

The assessment will be administered by the Institute of Banking and Finance.

The PB Code also sets out ‘market conduct principles’ relating to the business conduct of financial institutions and their staff engaged in private banking activities, covering such areas as ethics and professionalism, client relationship management and risk management.

Source: International Adviser

U.S. Lawmakers reach agreement on Financial Reform

Posted by Ivan Guan | Posted on 25-06-2010

Category : Financial Industry Update

[Bloomberg] Congressional negotiators today approved the most sweeping overhaul of U.S. financial regulation since the Great Depression, reshaping oversight of Wall Street and some of its most opaque concoctions.

Lawmakers from the House and Senate worked through the night in a 20-hour session to reach deals on two of their most far-reaching and contentious proposals — a ban on proprietary trading by banks and new oversight of the derivatives market. This month, they’ve also agreed on measures to wind down big firms whose collapse might shake markets, to keep tabs on hedge funds and to make it easier for investors to sue credit raters.

“This is going to be a very strong bill, and stronger than almost everybody predicted that it could be and that I, frankly, thought it would be,” House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, told reporters June 23 as lawmakers prepared for the final round of talks.

Read the full story here.

Man Group to Acquire GLG in Deal Valued at $1.6 Billion

Posted by Ivan Guan | Posted on 19-05-2010

Category : Financial Industry Update

Man Group Plc, the biggest publicly traded hedge fund firm, agreed to buy GLG Partners Inc. for $1.6 billion to reduce its reliance on a single trading program and expand its range of funds.

GLG is an excellent strategic fit. It is a leading global multi-strategy investment manager with around $24bn in net assets and a low style correlation to managed futures.

The transaction will require the support of Man and GLG shareholders and is subject to the usual process of regulatory approval. The targeted formal completion of the transaction is in the third calendar quarter of this year

Fundsupermart (FSM) impose platform fees

Posted by Ivan Guan | Posted on 06-04-2010

Category : Financial Industry Update

Tags:

Fundsupermart (FSM) has recently announced that they would be charging their users a platform fee with effect from 1st May 2010. The charges will apply to investments made using cash or SRS. Increasing operating costs has been cited as one of the reasons for imposing the fee.

Under the new pricing structure, investors would expect to pay an additional 0.5% p.a. for equity funds and 0.2% p.a. for bond funds. To make up for the platform fees, upfront sales charges would be reduced.

The new pricing structure is summarised in the table below:

Sales Charge
Type of Purchase Sales Charges
Equity funds – General Investors (below S$75,000) 1.50%
Equity funds – Sliver Investors ($75,000 to $249,999) 1.25%
Equity funds – Gold Investors ($250,000 or more) 1%
Money Market, Short duration bond 0%
Selected Fixed Income Funds 0.1% or 0.2%
All other Fixed Income funds 0.75%
Switching
Switching (same tier) 0%
Switching (lower tier to higher tier) 0.75%
Switching (0% sales charge fund to any fund) Prevailing sales charge
Platform Fee
Holdings Platform Fee
Equity Funds Holdings (Cash/SRS only)* 0.125% per quarter
Fixed Income Funds Holdings (Cash/SRS only)** 0.05% per quarter
All CPF Holdings Exempted

All fees and sales charges quoted are exclusive of GST.

* Platform fee for equity holdings above $500,000 will be charged only 0.1% per quarter and equity holdings above 1 million will be charged only 0.075% per quarter (incremental basis).

**The quarterly platform fee of 0.05% for the cash fund will be waived until February 2011

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