New online portal to help investors understand Specified Investment Products

THE Association of Banks in Singapore (ABS) and Securities Association of Singapore (SAS) on Monday launched an online e-learning portal on unlisted Specified Investment Products (SIPs) - investment products which contain derivatives or have features and risks that are relatively more complex.

Investors can access the e-learning portal at http://sips.abs.org.sg/ It is jointly developed by ABS and SAS, at no charge and at their own time and pace.

It offers five modules: Foreign Exchange Margin Trading; Contracts For Difference; Structured Deposits and Dual Currency Investments; Unit Trusts and Investment-linked Insurance Policies; and Structured Products.

The portal captures the key features and risks of the unlisted SIPs to allow retail investors to better understand such products, and there is an assessment at the end of each module, said ABS and SAS.

Investors can still invest in unlisted SIPs without undergoing this assessment, they added.

ABS and SAS also said that even if an investor passes the Customer Knowledge Assessment (CKA), financial intermediaries should advise the investor on product suitability before an investment decision. Investors can choose not to receive advice or act against advice given, having been alerted to the consequences of doing so.

Upon passing an assessment, investors will receive a certificate via e-mail which they can present to their financial intermediaries for the purposes of the CKA. This complements the existing e-learning module developed by the Singapore Exchange (SGX) for listed SIPs and will allow investors to educate themselves on all SIPs at their convenience, said the two organisations.

Ong-Ang Ai Boon, director of ABS, said: "Consumers must not invest if they do not understand the products' features and risks. While the banks and the financial advisory industry are responsible to promote financial literacy, consumers should also be proactive in making use of the e-learning portal to educate themselves on any of the modules, if interested, so as to be able to make informed investment decisions."

SAS CEO Melinda Sam said that financial intermediaries already have existing processes to assess customer suitability for investing in SIPs, and this new portal would be helpful to provide an additional data point in assessing an investor's knowledge in unlisted SIPs.