Joint release by SAS and SGX

• Move in line with global movement towards sustainabillity
• Electronic statements are available for customers with internet trading accounts or CDP Internet Service
• Retail investors who have not signed up for internet trading accounts or CDP Internet Service will continue to receive hardcopy statements

All the nine retail securities brokers in Singapore and The Central Depository (“CDP”) will progressively provide electronic statements to customers, starting from the fourth quarter of 2016.

These nine retail securities brokers in Singapore are all members of the Securities Association of Singapore (“SAS”) and SGX-Securities Trading (“SGX-ST”).

Retail investors who have internet trading accounts will be able to enjoy seamless accessibility when retail securities brokers soon allow customers the ability to view their account statements and contracts electronically. They are also able to view, print or save their records online for up to 3 months when securities brokers switch to electronic contracts.

CDP account holders who have registered for the CDP Internet Service will be able to access their account statements for the past 24 months, and confirmation notes for the past 60 days from the second quarter of 2017 onwards. This is an extension of the current service where CDP account holders can access electronic monthly account statements and confirmation notes online for the past 3 months and 60 days, respectively.

With the rollout of this initiative, retail and CDP customers who are already receiving electronic statements will no longer receive physical copies of the statements.  Retail investors who have not signed up for internet trading accounts or CDP Internet Service will continue to receive hardcopy statements.

This is an environmentally-friendly measure retail securities brokers and CDP are collectively embarking on to reduce their carbon footprint, while offering customers convenience and secure and timely delivery of their account statements, trade contract details and confirmations of securities movements.

“Securities firms view this as a positive move, keeping with technology gives customers easy access to their electronic records,” said Lim Kok Ann, Chairman, SAS.

“CDP is pleased to be doing our part together with the retail securities brokers to reduce reliance on postal delivery and encourage electronic statements. Our customers will enjoy access to their account information anytime, anywhere, while helping to save paper and protect the environment,” said Nico Torchetti, Head of Market Services, SGX.

Commenting on this, David Gerald, President and CEO, Securities Investors Association of Singapore, said “SIAS is pleased that CDP and the nine local retail brokers are progressing with changing consumer behaviour, and we welcome the promotion of e-statements, while retaining the option to receive hardcopy statements to cater to the preference of different investor profiles. This is a customer-centric move on both the retail brokers and CDP’s part.” 

Retail investors will receive notification alerts via email or SMS from their securities brokers and via email from CDP when their electronic statements are ready.

The electronic statements and notification alerts will be available at no cost. If retail investors wish to continue to receive physical copies, they may send the request to their securities brokers or CDP at any time.

Retail investors who wish to receive electronic statements, but do not have internet trading accounts or have yet to sign up for the CDP Internet Service, can contact their securities brokers or CDP for assistance.

Retail investors are also advised to contact or refer to the websites of their securities brokers and CDP for more information on this initiative and updates on implementation dates. The websites and contact details of the retail securities brokers and CDP are appended in Appendix 1.

Appendix 1

Retail Securities Brokers from the Securities Association of Singapore 

ONLINE E-LEARNING PORTAL TO EDUCATE RETAIL CUSTOMERS ON UNLISTED SPECIFIED INVESTMENT PRODUCTS

The Association of Banks in Singapore (ABS) and Securities Association of Singapore (SAS) today launched an online e-learning portal on unlisted Specified Investment Products (SIPs). SIPs are investment products which contain derivatives or have features and risks that are relatively more complex. The e-learning portal was jointly developed by ABS and SAS as an industry initiative.

Investors can access the E-Learning Portal for Investors at no charge and at their own time and pace. The portal at http://sips.abs.org.sg/ captures the key features and risks of the unlisted SIPs to allow retail investors to better understand such products. There is an assessment at the end of each module. Investors can still invest in unlisted SIPs with suitable advice without undergoing this assessment.

Financial intermediaries conduct the Customer Knowledge Assessment (CKA) to assess if a retail investor understands the features and risks of unlisted SIPs. Even if an investor passes the assessment, financial intermediaries should advise the investor on product suitability before he makes an investment decision. Investors can choose not to receive advice or act against advice given, having been alerted to the consequences of doing so.

Upon passing an assessment, investors will receive a certificate via email which they can present to their financial intermediaries for the purposes of the CKA. This complements the existing e-learning module developed by the Singapore Exchange (SGX) for listed SIPs and will allow investors to educate themselves on all SIPs at their convenience.

The ABS-SAS e-learning portal offers 5 modules:

(a)       Foreign Exchange Margin Trading;

(b)        Contracts For Difference;

(c)        Structured Deposits and Dual Currency Investments;

(d)        Unit Trusts and Investment-linked Insurance Policies;

(e)       Structured Products.

Said Mrs Ong-Ang Ai Boon, Director of ABS, “Consumers must not invest if they do not understand the products’ features and risks.  While the banks and the financial advisory industry are responsible to promote financial literacy, consumers should also be proactive in making use of the e-learning portal to educate themselves on any of the modules, if interested, so as to be able to make informed investment decisions.”

“Financial intermediaries already have existing processes to assess customer suitability for investing in SIPs. This portal would be helpful to provide an additional data point in assessing an investor’s knowledge in unlisted SIPs,” said Ms Melinda Sam, CEO of SAS.

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The Securities Association of Singapore (SAS) has issued a set of industry guidelines for its members when they announce trading restrictions of any SGX-listed securities.

This initiative arises from a joint consultation by the Monetary Authority of Singapore and the Singapore Exchange in February 2014, where ensuring transparency of trading restrictions imposed by securities intermediaries is among the proposals made to improve trading practices in the securities market.

Under the SAS Trading Restriction Guidelines, when a member firm decides to tighten its trading policy to manage its credit risk exposure to its customers’ trading activities in a particular SGX-listed security, it will make a public disclosure and provide the rationale for the trading restriction on its website.

The SAS Trading Restriction Guidelines serve to ensure that information on trading restrictions is disseminated in a consistent, fair, orderly and transparent manner for the benefit of the investing public, as some investors have perceived that such information may have an impact on market prices.

The public can view the announcements on SAS members’ websites. SAS will also provide links on its website to these announcements to facilitate investor access to the information.

This new initiative takes effect tomorrow.

The Editor, The Business Times

In the past week, there has been significant press coverage on the now infamous trio of designated stocks – Asiasons Capital, Blumont Group and LionGold Corp.

The deflation of the bubble created by these three and other closely associated stocks have widespread impact on the industry and have affected investors ranging from hedge to long funds and retail traders alike across various intermediaries such as the private banks, foreign and local brokers.

There seems to be a misguided perception that contra trading was the singular cause for the bubble.

It is evident that a wide spectrum of traders participated in these counters through various means including leverage via margin accounts or other forms of leverage via brokers and private bankers.

To blame the current woes solely on Contra Trading defies logic when the extremely high trading volumes were contributed also by other leveraged means.  Why are other forms of trading ie margin or other forms of collateralized trading not to be blamed?

In fact, a greater portion of the trading losses may be residing in these leverage accounts seen in the ST article today on a bank force-selling of a position held by a prominent Malaysian personality.

Perhaps the crux of the issue lies not with contra or other forms of leverage trading but the failure by the industry to recognize and react in good time to the possibility that certain elements or parties may be seeking to exploit the system.

Arising from this incident, the industry as a whole – SGX (Singapore Exchange), SAS (Securities Association of Singapore), SOR (Society of Remisiers) and SIAS (Securities Investors Association, Singapore) – collectively could be more vigilant in safeguarding our market from being exploited by various elements which may affect the integrity of SGX as the market place – to the detriment of our investors.

There should however be a balanced approach to avoid stifling the market. There are examples of well-timed and self-initiated intervention by certain participants to try to remove the bubble pressure building up in some of the counters to lessen the impact on both investors and the intermediary of a full-blown meltdown.

Blaming the current outcome on contra trading is too simplistic to the point of being naive.

Contra trading has little to do with essentially a gross mispricing of a given counter. If contra trading is to be blamed then perhaps margin trading played a greater role in sustaining the bubble as positions can be held indefinitely as long as margin ratios are maintained. Do we also ban margin or collateralized trading?

We need therefore to see the wood from the trees.

The Editor, The Business Times

The Securities Association of Singapore (SAS) would like to respond to your editorial “Trading representatives deserve better” dated June 19, 2013.

Under the current Monetary Authority of Singapore regulations, trading representatives (TRs) who have not passed the Capital Markets and Financial Advisory Services Module 6A exam by July 1, 2013, are to confine their dealing and financial advisory activities to only Excluded Investment Products (EIPs).

Financial products are getting more complex. It is widely recognized that it is important that TRs raise their professional knowledge to better serve their clients. Globally financial professionals are up-skilling and Singapore is no exemption.

With respect to the SIP regime, TRs are given more than a year to prepare themselves for the June 30, 2013 deadline set by the Monetary Authority of Singapore to pass the Module 6A exam. 

SAS member firms have encouraged TRs to pass the exam. To this end, they have assisted tangibly by:-

(i) Funding a new preparatory course covering the syllabus of Module 6A

(ii) Co-sponsoring some 3,000 TRs who attended this course since March 2012

For TRs who failed to pass Module 6A or chose to confine their dealings and financial advisor services to EIPs, SAS further assisted by:-

(a) Formulating a uniform industry-wide arrangement to support them with Module 6A house dealers to execute       SIPs trades for their clients

(b) In contrast to allegations that clients are taken away from these TRs, under the industry-wide arrangement, EIP-qualified TRs are able to retain their clients unless their clients opt otherwise.

Trading representatives and clients are the very core of the broking business of our member firms. We are hence disappointed that your editorial could suggest that the welfare of TRs were ignored by SAS members. We wish to correct the erroneous view.

In response to The Monetary Authority of Singapore’s letter to The Straits Times on 15 May 2013 “MAS explains need for exam” and Business Times article “Module 6A: issues still unresolved as deadline nears” on 12 June 2013, the Securities Association of Singapore is pleased to inform customers on the unified solution to be adopted by its members should they wish to deal in Specified Investment Products (SIPs) where their trading representatives have not attempted or passed the Capital Markets and Financial Advisory Services (CMFAS) Module 6A examination from 1 July 2013.

The collective approach is to give SIP-qualified customers the option to decide:-

(a) To self-execute their orders through an electronic platform; and/or

(b) Communicate with a qualified representative who has passed the CMFAS M6A examination to follow up on their SIPs-related dealing needs.

A trading representative must pass the CMFAS M6A examination in order to deal in any SIPs for his or her clients. Examples of SIPs include certain securities, covered warrants, exchange-traded funds or extended settlement contracts.

A representative is not allowed to deal in SIP orders for his or her customers till he/she passes the CMFAS M6A examination. Such representatives (referred to as EIP-Qualified) are confined to dealing in Excluded Investment Products (EIPs) which include corporate shares or stocks and REITs listed on Singapore Exchange or approved foreign exchanges such as HKSE, Bursa Malaysia, NYSE or LSE etc.

Where the customer is presently serviced by an EIP-Qualified representative, the customer will be duly informed. If the customer still wishes assistance, he/she will be redirected to a qualified representative to handle his/her SIP dealing and dealing-related needs or be given contact particulars of the designated qualified representative for the customer to call directly.