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 20193 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 20193 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 20193 June 2019.
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:
Added on 3 June 20193 June 2019.
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 20193 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 20193 June 2019.
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 20193 June 2019.
4.2
Such courses may be organised or conducted by third party course providers or in-house trainers.
Added on 3 June 20193 June 2019.