Fundsupermart.com
Licensed Custodian, Dealer and Financial Adviser.   CPFIS Registered Investment Administrator

Customer Knowledge Assessment (CKA)/Customer Account Review (CAR)

1. What is the new regulation regarding the sale of unit trusts to retail investors?

Our regulator, the Monetary Authority of Singapore, has released new measures and enhanced requirements to safeguard the interest of investors. These measures apply to unlisted Specified Investment Products (SIPs), such as unit trusts as well as other financial instruments and will be effective from 1 January 2012.

The Customer Knowledge Assessment (CKA) will apply if you wish to transact in an unlisted SIP. Click here for a quick guide for retail investors investing in unlisted SIPs.

The Customer Account Review (CAR) will apply if you wish to trade SIPs listed on an exchange. Click here for a quick guide for retail investors investing in listed SIPs.

2. What are the new measures and how will they affect me?

Under these measures, all distributors will have to assess whether the investors have the relevant knowledge or experience to understand the risks and features of the products they are buying.

If you “pass” the assessment, you may continue with your usual online transactions and execute the online trades yourself on FSM platform.

If you “fail” the assessment, you will not be able to execute online purchases (including switches and RSP application, where applicable) yourself. If you still wish to purchase, investment advice must be provided to you on whether the specific product is suitable to you before you can proceed with the purchase.

Please refer to Question 19 for the process of requesting investment advice.

3. What are the criteria set for the CKA and CAR?

Below are the 3 criteria set for the satisfaction of CKA or CAR. To fulfill or “pass” the CKA or CAR, you need to satisfy just ONE of the following criteria.

1. Investment Experience
Have at least 6 transactions in unlisted Specified Investment Products (unit trusts or investment linked products) in the last 3 years.

2. Working Experience
Have a minimum of 3 consecutive years of working experience^ in the past 10 years in the development, structuring, management, sale, trading, or research and analysis of investment products. (Work experience in accountancy, actuarial science, treasury or financial risk management is also considered relevant experience).
^Support functions in the above-mentioned areas that are administrative or clerical in nature will not be considered as relevant experience.

3. Education Qualification
a) Have a diploma or higher qualification in relevant courses like accountancy, actuarial science, business, capital markets, commerce, economics finance, financial engineering, financial planning, computational finance and insurance;
AND/OR
b) Have a professional finance-related qualification. Examples of this would include the Chartered Financial Analyst Exam conducted by the CFA Institute, USA and the Association of Chartered Certified Accountants (ACCA) Qualifications.

4. How do you assess if I have the relevant knowledge and experience?

A Customer Knowledge Assessment (CKA)/Customer Account Review (CAR) will be conducted and you will be assessed based on your education qualifications, investment experience and working experience.

5. Does it mean I have to fulfil all 3 criteria in order to pass the CKA/CAR?

You only need to satisfy just ONE of the 3 criteria set for the assessment.

6. Is the CKA and CAR a test or exam to test my investment knowledge?

No, this is only a tool to assess if you meet the criteria to fulfill the requirements of the CKA/ CAR. No actual tests or exams will be conducted by Fundsupermart.

8. When and how do you conduct CKA/CAR with existing Fundsupermart investors?

You will be prompted to go through the assessment online when you log in to your Fundsupermart account. The assessment will be in the form of a simple questionnaire where we will require investors to furnish us with information pertaining to their education qualifications, investment experience and working experience. Based on the information provided, investors who have fulfilled the requirements of the CKA/CAR will be notified via email after the review of the assessment has completed. The positive outcome will be valid for one year from the date of your assessment.

We will also assess our existing Fundsupermart holders internally based on their Fundsupermart and/or iFAST transactions in our record. Account holders who fulfill such criteria for investment experience i.e. at least 6 transactions in the past 3 years, will “pass” the CKA/CAR automatically for one year. They will be notified on the positive outcome and may only be prompted to take CKA/CAR upon expiry date.

9. I have more than 1 Fundsupermart account with you. Do I have to go through the assessment separately for each of my accounts?

You only need to go through the assessment once upon login. The same outcome of the assessment will apply to all of your Fundsupermart accounts that are linked to your NRIC or passport number.

10. I have a Beneficiary Account with Fundsupermart. Do you need to conduct CKA/CAR with my Beneficiary Account holder?

No, we only need to conduct CKA/CAR with the Main Account Holder of the Beneficiary Account, as you are the only key operative of the account.

11. How often will I need to go through the CKA/CAR? How long is a “pass” valid for?

If you are assessed to have fulfilled the requirements of the CKA/CAR, the positive outcome will be valid for one year from the date of your assessment. On the expiry date, we will need to conduct a new CKA/CAR before allowing you to continue your usual online transactions with Fundsupermart.

12. How do you inform me of my assessment outcome?

You will be informed of your assessment outcome after we have reviewed your assessment. Please allow 2-3 working days for the review to be completed. We will send you an email confirmation.

For those who have fulfilled the requirements of the CKA/CAR, you will also be notified on the expiry date of the CKA/CAR result.

For those who have already fulfilled the requirements of the CKA/CAR based on their past Fundsupermart/ iFAST transactions, an email will be sent to inform you.

You can view the outcome of the CKA/CAR status by going to Account Settings > CKA/CAR Status

*FSM: My Account > Reassess CKA / Status

13. Who will be exempted from CKA/CAR assessment?

Accredited Investors as defined in the Securities and Futures Act (SFA) and Fundsupermart corporate accounts are exempted from the assessment. The definition of an Accredited Investor can be found HERE.

15. What type of transactions are you referring to?

A pure sell order^ is not considered as one transaction. Dividend reinvestment, transfer and fee deduction contracts will not be considered as well.

All other types of transactions (including selling and parking the sales proceeds into a Parking Facility Fund and RSP) are included.

^A pure sell order refers to a sell order where the redemption proceeds are paid to you in the form of a cheque or credited into your bank account or CPF-OA or SA account.

We will illustrate further with the following examples.

Scenario 1: Multiple Purchases - different timing and payment method

Purchased Fund A with another unit trust distributor (considered as 1 transaction )
Purchased a ILP (Investment-Linked Product) with another distributor ( considered as 1 transaction)
Purchased Fund A and Fund B under 1 purchase order last year (considered as 2 transactions)
Purchased Fund C using cash and CPF-OA last year (considered as 2 transactions)
Purchased Fund D on 2 different dates last year (considered as 2 transactions)
Purchased Fund E more than 3 years ago (considered as 0 transaction)

Total number of qualified transactions: 1+ 1 + 2 + 2 + 2 + 0 = 8

Scenario 2: Switch Orders

Placed 2 switch orders on the same day last year
Placed 2 switch orders more than 3 years ago

Total number of qualified transactions: 2 + 0 = 2

Scenario 3: Sell Orders

Sold Fund A and parked sales proceeds in Parking Facility Fund (e.g. Nikko AM Shenton ShortTerm Bond) last year
Sold Fund B and C last year and sales proceeds were credited into bank account or CPF account (pure sell)

Total number of qualified transactions: 1 + 0 = 1

Note: Sell orders with Parking Facility Fund as the redemption mode is considered as a switch order.

Scenario 4: Regular Savings Plan (RSP) Application

RSP applied for Fund A one year ago but stopped 6 months later ( considered as 1 transaction )
RSP applied for Fund A again last month (considered as 1 transaction)
RSP applied for Fund B last year using cash and CPF-OA investment and the plan is still ongoing (considered as 2 transactions)
RSP applied for Fund C 4 years ago and the plan is still ongoing (considered as 0 transaction)

Total number of qualified transactions: 1 + 1 + 2 + 0 = 4

Note: In order to fulfill the criteria, the first transaction date of the RSP must not be more than 3 years ago.

16. How do you assess existing Fundsupermart clients based on their transactions on Fundsupermart?

Based on the types of transactions as defined above, we will run regular internal assessments on our existing Fundsupermart account holders based on their past transactions on our record. It will include all transactions placed under their personal and beneficiary account(s), if any, as long as the main account holder of these accounts is the same person.

For those who fulfill the criteria set for investment experience based on Fundsupermart transactions, we will “pass” these clients automatically and they will only be assessed again on the expiry date i.e. one year later from the date of the internal assessment.

17. What does it mean if I do not fulfill the requirements of the CKA/CAR? Does it mean that I will not be able to place online transactions?

CKA failed assessment
You will not be able to execute online purchases (including switches and RSP applications) yourself. If you wish to invest, investment advice must be provided to you by our Investment Advisory Team on whether the specific products are suitable before you can proceed with the purchase.
Please refer to Q19 for more details.

CAR failed assessment
You will be prompted to go through a Listed Specified Investment Product (SIP) declaration form which will highlight the key risks of investing in listed SIPs. You will need to acknowledge the potential implications and consequences and subject to an investment limit on all accounts that are linked to your NRIC or passport number.

18. What type of online transactions will I be prevented from executing if I am assessed to have “failed” the CKA/CAR?

CKA failed assessment
You may only place online sell orders yourself. All other types of online transactions (including buy, switch and RSP application) will be blocked. You may only proceed with these transactions after investment advice is provided to you by our Investment Advisory team.

CAR failed assessment
You can still proceed to place online transaction orders but subject to the investment limit as stipulated in the declaration form.

Please refer to Question 19 for the process of requesting investment advice.

19. How should I go about requesting for investment advice if I am prevented from executing the online purchases myself?

If you do not meet the requirements of the CKA/CAR, you will not be able to execute online purchases (including switches and RSP applications) yourself. If you wish to invest, investment advice must be provided to you by our Investment Advisory team.

To submit Portfolio & Investment Objective Fact Find Form, please login to your account and go to My Investment Advice > My Portfolio Fact Find.
*FSM: My Account > My Portfolio Fact Find.

Step 1: Submit Portfolio & Investment Objective Fact Find Form
Our Investment Advisory team needs to have sufficient information before making a suitable recommendation on your unit trust investment and life insurance policies. Inaccurate or incomplete information provided by you may affect the suitability of the recommendation. The following sections will cover information relating to your investment objectives, financial situation and needs.
After you have submitted the fact find form, our Investment Advisory team will come back to you with their analysis and a suitable recommendation on your unit trust investment.

Step 2: Review Investment Advice
An email will be sent to inform you when the advice is ready for viewing online.

Step 3: Orders Creation & Trades Acceptance
Note: This step is only applicable to investors who have not met any of the CKA requirements.
After you have accepted the advice, our Investment Advisory team will then create online orders on your behalf for you to approve. Once you have acknowledged and approved the orders created, the orders will be submitted to our system for processing.

The request will take around 3 - 5 workings days to process.

Click here to know more about our investment advisory services.
Click here to view or submit Portfolio & Investment Objective Fact Find Form.

20. Will Fundsupermart offer investment advice to me?

Yes, we have an Investment Advisory team to provide investment advisory services to investors. Whether you are a new investor or need a second opinion to your current portfolio, you can contact our Investment Advisory team and they will support you on portfolio review and construction.

Click here to know more about our investment advisory services.

Note: Product advice is not sufficient for investors who do not fulfill the requirements of Customer Knowledge Assessment (CKA). Portfolio and investment advice must be provided.

21. Will I have to pay for the investment advice?

The investment advisory services is currently free.

22. How soon can I update my assessment if my CKA/CAR outcome is “failed”?

You may update or re-take your CKA/CAR assessment again as and when there is any new update to any one of the 3 CKA criteria.

23. Are there any changes to new account openings with Fundsupermart?

Yes, starting from October 2011, new applicants will have to go through and answer the CKA/CAR questionnaire during the online account application. Applicants will be notified by email on their assessment outcome upon the approval of their new accounts.

24. I already have one existing Fundsupermart account. Do I need to go through the CKA again if I open an additional Fundsupermart account?

You will not be asked to take CKA/CAR assessment when you open additional Fundsupermart account online.

25. If I have already gone through a CKA/CAR with another distributor, must I go through the assessment with you?

Yes. Each distributor has an obligation to conduct CKA/CAR with their customers. The outcome of the assessments conducted with another distributor cannot be transferred.

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