Impact on Listed SIPs exercise by MAS

Yesterday we just went to a briefing conducted by our business partner with regards to the Listed Special Investment Products (SIP). The main points are listed as below:

1. With effect from 1 January 2012, Trading Representative is required to pass Module 6A (which replaces Module 7). For those existing TR, they are given grace period until June 2013 to pass the Module 6A.

2. Paid Advice is introduced to the clients who wishes to get the advice from TRs. A proposed 500 dollar would be charged upfront for an interview with clients to better understand their risk and return as well as investment time horizon and unique requirement on the investment.

3. Clients who wish to trade listed SIPs must fulfil the requirement set by MAS:
             - obtain diploma or above of business/finance/accountancy related course
             - obtain certification such as ACCA, CFA, ChFC, CFP
             - have at least 3 consecutive year of experience in finance / investment industry
             - have at least 6 transaction for the past 3 years
             - pass the online quiz (18 out of 20) posted by MAS

We can foresee that more clients will be brought up the awareness where the higher possible risk products consists of higher risk. They should seek advice from the experts before they can start trading in those listed SIPs. Of course, we cannot guarantee that performance of listed SIPs will be definitelybetter than local shares, however, we should understand the underlying risks involved before we start investing in this products.