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Financial advisory
RES5Financial Advisory Services✓A financial adviser wants to sell a synthetic ETF (a SIP) to a retail customer. What extra safeguard does the SIP regime require before the sale?
A synthetic ETF listed on SGX is a Listed Specified Investment Product (SIP). Before recommending a listed SIP to a retail client, a financial adviser must conduct a Customer Account Review (CAR), which checks the client's knowledge or experience in derivatives (MAS Notice FAA-N16, para 27E; a dealer does the same under SFA 04-N12, para 6, before opening a listed-SIP trading account). The Customer Knowledge Assessment (CKA) is the equivalent test for unlisted SIPs. A plain physical ETF that is an EIP triggers neither. MAS said on 15 May 2026 that the CAR and CKA will merge into one CKA, but that change is not yet in force.
Naming the Customer Knowledge Assessment, which applies to unlisted SIPs, or thinking the SIP regime works through product changes rather than a review of the customer's knowledge or experience.
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