Rulebooks: Contents

Rulebooks
Mainboard Rules
Catalist Rules
SGX-ST Rules
Chapter 1 General
Chapter 2 Admission and Registration of Trading Members, Chief Executive Officers and Trading Representatives
Chapter 3 Capital and Financial Requirements
Chapter 4 Operational Requirements
Chapter 5 Trading Practices and Conduct
Chapter 6 Designated Market-Makers
Chapter 7 Listing and Quotation
Chapter 8 Trading
Chapter 9 Settlement
Chapter 10 Requirements on Specific Securities and Futures Contracts
Chapter 11 Cancellation of Contracts and Trades
Chapter 12 Supervision and Enforcement
Chapter 13 Definitions and Interpretation
Directives
Regulatory Notices
Practice Notes
Practice Note 4.15.3 Additional Safeguards for Trading by Young Investors
Schedule A
CDP Clearing Rules
CDP Settlement Rules
DVP Rules [Entire Rulebook has been deleted]
CDP Depository Rules
Futures Trading Rules
SGX-DC Clearing Rules
SIAC DT Arbitration Rules
SIAC DC Arbitration Rules
Archive
Rule Amendments

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  • Practice Note 4.15.3 Additional Safeguards for Trading by Young Investors

    • 1. Introduction

      • 1.1

        Rule 4.15.2(a) provides that prior to opening a customer account, a Trading Member shall satisfy itself that it has obtained adequate particulars of each customer. Such particulars include the age of the customer.

        Added on 3 June 2019.

      • 1.2

        Rule 4.15.3 provides that before opening a customer account for a customer under the age of 21 ("Young Investor"), a Trading Member shall assess the customer's suitability to trade and disclose the risks of trading to the customer.

        Added on 3 June 2019.

      • 1.3

        This Practice Note provides guidance on how a Trading Member shall assess a Young Investor's suitability to trade and disclose the risks of trading to the Young Investor and also sets out the measures and operational procedures that Trading Members should take as part of good business practice when Young Investors open securities trading accounts with them.

        Added on 3 June 2019.

    • 2. Suitability assessment and risk disclosure

      • 2.1

        When a Young Investor opens an account carried on the books of the Trading Member, the Trading Member should undertake the following procedures, in addition to their own account opening procedures, and give appropriate emphasis to the following:

        (a) Suitability assessment. A Trading Member should assess the suitability, taking into account the financial knowledge and risk capacity of the Young Investors to trade. A specific suitability assessment should also be made before allowing a Young Investor to trade in more complex instruments or products (such as a derivative contract or product with embedded derivatives). The decision to allow the Young Investor to trade in such instruments or products should be approved by a senior executive of the Trading Member. A Remote Trading Member should carry out suitability assessments of Young Investors in accordance with the applicable standards prescribed by the Relevant Regulatory Authority.
        (b) Risk disclosure. The risks and uncertainties associated with investing or trading in securities and other products to be sold by the Trading Member should be properly explained to the Young Investor. This is to ensure that he or she has an appropriate understanding of the key risks and commitments involved. A Remote Trading Member should provide risk disclosure to Young Investors in accordance with the applicable standards prescribed by the Relevant Regulatory Authority.

        Added on 3 June 2019.

    • 3. Supervision

      • 3.1

        Trading Members should ensure that the relevant staff members are adequately trained and familiar with the safeguards put in place for Young Investors. Similarly, any additional procedures should be communicated to all Trading Representatives to ensure proper adherence and consistent application.

        Added on 3 June 2019.

      • 3.2

        In addition, a senior executive should be appointed to oversee and take responsibility for managing all issues relating to Young Investors. This includes monitoring the Trading Member's dealings with the Young Investors and making appropriate adjustments to the procedures and processes, where necessary.

        Added on 3 June 2019.

    • 4. Investor Education

      • 4.1

        Trading Members should offer basic investment courses to Young Investors, as well as product-specific courses to those who wish to trade in more sophisticated instruments and products. These courses will enable Young Investors to be more aware of the implications of their trading decisions and to be able to make better investment choices.

        Added on 3 June 2019.

      • 4.2

        Such courses may be organised or conducted by third party course providers or in-house trainers.

        Added on 3 June 2019.