Whole Section
Practice Note 4.18 Education for Internet Trading Customers
1. Introduction
1.1
Rule 4.18 states that save for Accredited Investors, Institutional Investors and Expert Investors, a Trading Member must provide its Internet Trading customers with adequate information, guidance and training on (a) prohibited trading practices; (b) potential limitations and risks of Internet Trading; (c) system functionalities and order management procedures; and (d) market conventions such as minimum bid sizes and board lot sizes. With respect to Accredited Investors, Institutional Investors and Expert Investors, a Trading Member's obligation relates solely to the provision of adequate information in relation to prohibited trading practices.
Added on 3 June 20193 June 2019.
1.2
This Practice Note provides guidance on the information that a Trading Member should provide to its Internet Trading customers.
Added on 3 June 20193 June 2019.
2. Information, Guidance and Training
2.1
A Trading Member should provide its Internet Trading customers with adequate information, guidance and training with respect to the areas below.
Added on 3 June 20193 June 2019.
2.2
Prohibited trading practices, which refer to trading practices prohibited under these Rules, the SFA or other Singapore laws.
Added on 3 June 20193 June 2019.
2.3
Potential limitations and risks of Internet Trading, which include:
(a) possibility of delays in order transmission and confirmation of order execution, and what to do in case of such delays;(b) not being able to withdraw erroneous orders in time due to the speed of electronic trading; and(c) danger of unauthorised access to a customer's internet account and recommended preventive security measures in relation to matters such as the protection of passwords and leaving an on-line screen unattended.Added on 3 June 20193 June 2019.
2.4
System functionalities and order management procedures, which include:
(a) system access requirements;(b) how to place, modify and withdraw orders;(c) types of trading controls e.g. types of error-prevention alerts and how to interpret system alerts;(d) types of credit controls e.g. types of trading limits; and(e) types of orders e.g. Good till Cancelled and All or None.Added on 3 June 20193 June 2019.
2.5
Market conventions, which include:
(a) board lot size;(b) minimum bid size;(c) convention for price quotation of different securities; and(d) corporate actions and their effect on prices.Added on 3 June 20193 June 2019.