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.