Customer Knowledge Assessment-FAQ

  1. What is the purpose of a Customer Knowledge Assessment (CKA)?

    The purpose of the Customer Knowledge Assessment (CKA) is to ascertain a potential investor’s financial knowledge and experience to understand the risks and features of unlisted* Specified Investment Products prior to any purchases made online or at the Bank’s branch.

    *Unlisted Specified Investment Products refer to the following 2 Product Categories:

    Product CategoryExamples of Unlisted Specified Investment Products

    A. Collective Investment Schemes (CIS) and Investment-linked Life Insurance Policies (ILPs)

    B. Specified Investment Products which are neither listed nor quoted on a securities market or a futures market (excluding CIS & ILPs)

    Unit Trusts; and/or
    Investment-linked Life Insurance Policies
    Currency-linked Investments;
    Structured Deposits;
    Asset-backed Securities & Structured Notes;
    Equity-linked Notes; and/or
    Foreign Exchange Margin Trading Line and Foreign Exchange Forward Contracts

  2. What are the questions under CKA that require me to complete?

    There are 3 questions to be answered by you under CKA relating to your (i) highest education attained; (ii) occupation in the past ten years; and (iii) investment experience in Unlisted Specified Investment Products. A sample of the CKA Questions as follows:

  3. What are the investment products currently in DBS/POSB iBanking that require me to complete CKA?

    You will be required to complete CKA for Unit Trusts / Structured Deposits investment products.

  4. How will I be deemed to have satisfied CKA?

    (a) You should hold a diploma or has higher qualifications in accountancy, actuarial science,
          business/business administration/business management/business studies, capital
          markets, commerce, economics, finance, financial engineering, financial planning,
          computational finance and insurance; or

    (b) You should have a professional finance-related qualification e.g. the Chartered Financial
          Analyst Examination conducted by the CFA Institute, USA and the Association of Chartered
          Certified Accountants (ACCA) Qualifications;

    (c) You should have a minimum of 3 consecutive years of working experience in the past 10
          years in:

          (i) the development of, structuring of, management of, sale of, trading of, research on and
              analysis of investment products , or the provision of training in investment products;

          (ii) the provision of legal advice on or possess legal expertise in the areas set out at
               (c)(i); or

          (iii) accountancy, actuarial science, treasury or financial risk management activities

      (d) You should have invested in the following unlisted Specified Investment Products:

           (i) For transactions in collective investment schemes (referred to as “CIS”) and
               investment-linked life insurance policies (referred to as “ILPs”), the investor has
               transacted in CIS or ILPs at least 6 times in the preceding 3 years; or

           (ii) For transactions in Specified Investment Products which are neither listed nor quoted
                on a securities market or a futures market (excluding CIS and ILPs), the investor has
                transacted in any Specified Investment Products which are neither listed nor quoted
                on a securities market or a futures market (excluding CIS and ILPs) at least 6 times
                in the preceding 3 years;

       (e) If you are assessed to not possess knowledge or experience in an unlisted Specified
            Investment Products, but subsequently demonstrates sufficient understanding of the
            features and risks of that Specified Investment product through financial education, you
            may be deemed to possess the knowledge to transact in that unlisted Specified
            Investment Product.

  5. What type of transactions is Q4d (i) and d (ii) referring to?

    A pure buy/purchase into the unlisted specified investment products is considered as one transaction.

    For example: Switching of unit trust funds from A to B on a same day is considered as a transaction.

    A pure sell order refers to a sell order where the investment sale proceeds are paid to you in the form of a cheque or credited into your bank account or CPF Investment Account will not be considered as a transaction.

    For example: Unit trust dividend reinvestment, transfer and fee deduction contracts will not be considered as a transaction.

    1 Refer to Glossary Section of this form for an explanation of the "Investment Products" under Section 2(1) of the FAA

  6. How often will I need to go through the Customer Knowledge Assessment (CKA)?

    If you have been assessed to have attained a positive CKA outcome, the Bank will not be required to conduct a CKA on you when you buy the unlisted Specified Investment Product online during the one year period. Otherwise, the Bank will have to conduct a new CKA on you before allowing you to purchase an unlisted Specified Investment Product online during the one year period.

    The positive outcome of the CKA for any unlisted Specified Investment Product is valid for a period of one year from the date of the assessment. After a year has elapsed from when the CKA was first conducted, the Bank will have to conduct a new CKA before allowing you to purchase an unlisted Specified Investment Product online.

  7. How will CKA outcome affect me?

    If you have attained a positive CKA outcome, you may continue to execute your online purchases of unlisted Specified Investment Products.

    If you have attained a negative CKA outcome, you will not be able to execute your online purchases for the unlisted Specified Investment Products. Kindly proceed to seek advice concerning these products from our relationship managers or sales representatives at any of our POSB/DBS branches.

  8. If I have already gone through a CKA with another financial institution, must I go through the assessment with POSB/DBS Bank again?

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

  9. Do I have to provide any supporting documents for the CKA (e.g. education certificates, company’s letter of offer for relevant working experience, details of past transactions)?

    You do not need to provide any supporting documents for the answers provided in the CKA questions as verification.

    CKA outcome is derived basing on your answers provided in the CKA questions. Please note that any inaccuracies of information provided will affect your CKA outcome.

  10. Does it mean that I will not be able to make online purchases for unlisted Specified Investment Products such as Unit Trust(s) or Structured Deposit(s) when I have been assessed not to have satisfied the requirements of CKA?

    Yes, if you have been assessed not to have satisfied the requirements of CKA, you will not be able to make online purchases for unlisted Specified Investment Products such as Unit Trust(s) or Structured Deposit(s) as CKA takes effect on 1 January 2012.

    You will be assessed again if you wish to make online purchases for unlisted Specified Investment Products such as Unit Trust(s) or Structured Deposit(s).

  11. Where can I find more information regarding investing in Specified Investment Products and CKA?

    To understand more about Specified Investment Products and their relationship with CKA, you may visit the MoneySense website at http://www.moneysense.gov.sg/Understanding-Financial-Products/Investments/Guides-and-Articles/Investing-in-Specified-Investment-Products.aspx

Glossary Section

  1. FAA Section 2(1): Interpretations
    investment product" means — (a) any capital markets product as defined in section 2 (1) of the Securities and Futures Act; (b) any life policy; or (c) any other product as may be prescribed;

    • "capital markets product" means any securities, futures contracts, contracts or arrangements for the purposes of foreign exchange trading, contracts or arrangements for the purposes of leveraged foreign exchange trading, and such other products as the Authority may prescribe as capital markets products;
    • "life policy" has the same meaning as in the First Schedule to the Insurance Act (Cap. 142), but does not include any contract of reinsurance;

      Insurance Act, First Schedule: Definitions related to life business
      life policy” means any policy which -

      (a) provides for the payment of policy moneys on the death of a person or on the happening of any contingency dependent on the termination or continuance of human life;

      (b) is subject to payment of premiums for a term dependent on the termination or continuance of human life;

      (c) provides for the payment of an annuity for a term dependent on the termination or continuance of human life; or

      (d) is a combination of any of the above.
    • An accident and health policy that provides for the payment of policy moneys on the death of a person is not a life policy.

  2. FAA Section 27: Recommendations by licensed financial advisers

    (1) No licensed financial adviser shall make a recommendation with respect to any
          investment product to a person who may reasonably be expected to rely on the
          recommendation if the licensee does not have a reasonable basis for making the
          recommendation to the person.

    (2) For the purposes of subsection (1), a licensed financial adviser does not have a
          reasonable basis for making a recommendation to a person unless -

           (a) he has, for the purposes of ascertaining that the recommendation is appropriate,
                  having regard to the information possessed by him concerning the investment
                  objectives, financial situation and particular needs of the person, given such
                  consideration to, and conducted such investigation of, the subject-matter of the
                  recommendation as is reasonable in all the circumstances; and

           (b) the recommendation is based on the consideration and investigation referred to in
                 paragraph (a).

    (3) Where -

           (a) a licensee, in making a recommendation to a person, contravenes subsection (1);

           (b) the person, in reliance on the recommendation, does a particular act, or refrains from
                  doing a particular act;

           (c) it is reasonable, having regard to the recommendation and all other relevant
                  circumstances, for the person to do that act, or to refrain from doing that act, as the
                  case may be, in reliance on the recommendation; and

           (d) the person suffers loss or damage as a result of doing that act, or refraining from
                  doing that act, as the case may be,

    (4) In this section, a reference to the making of a recommendation is a reference to the
          making of a recommendation expressly or by implication.

    (5) This section shall not apply to any licensed financial adviser or class of licensed financial
          advisers in such circumstances or under such conditions as may be prescribed.