Investing in Specified Investment Products

A quick guide for retail investors

There are many retail investment products today. Some products are more complex than others, and have features that may be difficult to understand.

To alert consumers, the Monetary Authority of Singapore (MAS) has categorised such products as Specified Investment Products (SIPs). Some SIPs are listed on an exchange, and others are not.

 Examples of SIPs listed on an exchange Examples of SIPs that are not listed on an exchange 
  • *Certain exchange traded funds and notes
  • Structured warrants
  • Futures
  • Certificates
  • Structured notes (e.g equity-linked structured notes, credit- linked structured notes)
  • * Certain unit trusts
  • * Certain Investment-linked life insurance policies

*Note: Currently, all exchange traded funds, unit trusts and investment-linked life insurance policies are SIPs. With effect from October 2012, some of these products will not be considered as SIPs provided they meet certain requirements. For more information, click here for MAS' press release on 9 May 2012.

SIPs are derivatives, or products which may contain derivatives. They have complex features and risks which can expose you to more factors which can cause a loss. For example, an SIP may involve many parties, and your investment can be affected if any one or more of them fail. It may also be difficult to understand how the derivative can fully impact the performance of the product at the outset. The returns or losses on a product may be determined by complicated formulas that may not be easy to understand. Check with your financial institution to find out whether a product is an SIP.

Not all consumers have the knowledge or experience to assess an SIP's complex features. To help retail investors and financial institutions better gauge investors' understanding of SIPs, financial institutions are required from 1 January 2012 to conduct a Customer Knowledge Assessment (CKA) if you wish to transact in an unlisted SIP, and a Customer Account Review (CAR) if you wish to open an account to trade SIPs listed on an exchange.

If the financial institution assesses that you do not meet the CKA or CAR criteria, you can still proceed to transact in SIPs. However, safeguards will be put in place by the financial institution.

- Click here for a quick guide for retail investors investing in listed SIPs. (Download the pdf of the guide in English or Chinese)

- Click here for a quick guide for retail investors investing in unlisted SIPs. (Download the pdf of the guide in English or Chinese)

- Click here for information on what you should look out for before you purchase an unlisted SIP or open an account to trade listed SIPs.


Last modified on 12/08/2012