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Financial advisory
RES5Financial Advisory Services✓Ms Pereira has investible savings of S$120,000 under CPFIS-OA. She already holds S$38,000 of SGX-listed shares and corporate bonds bought with CPF savings. She instructs her dealer to buy a further S$6,000 of Main Board shares. What is the position?
RES 1B ch.6.2.1. Up to 35 per cent of investible savings may be invested in shares, property funds, corporate bonds and selected investment-linked products, unit trusts and exchange traded funds. Thirty-five per cent of S$120,000 is S$42,000, and S$38,000 has been used, leaving S$4,000. The agent bank will accept the purchase trade only where the member has sufficient investible funds and limits to settle it (ch.6.6).
Corporate bonds share the same 35 per cent bucket as shares, so they eat the headroom the client thinks is still there.
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