Re-Classification of certain foreign shares as Excluded Investment Products (EIPs)

With effect from 4 January 2013, about 180,000 investment products listed on foreign exchanges are no longer treated as Specified Investment Products (SIPs). They are instead the reclassified as Excluded Investment Products (EIPs). The reclassified products will include common shares, company warrants, depository receipts and real estate investment trusts listed on up to 20 foreign exchanges from 13 countries.

Background:

From 1 January 2012, financial institutions are required to conduct a Customer Knowledge Assessment (CKA) if their customers wish to transact in an unlisted SIP, and a Customer Account Review (CAR) if customers wish to open an account to trade SIPs listed on an exchange.

Foreign stocks, which are popular among Singapore investors, were classified as Specified Investment Products and subject to above regulations.

Now, with the new classification, you can buy as long as you acknowledge the Risk Warning Statement either via online or physical hardcopy.

Impact:

It is definitely good news for stock brokers. As chief executive of Securities Association of Singapore (SAS) put it, “We thought it was an early Christmas present” (BTInvest: Easier access to foreign stocks under new classification)

For consumers, hmm…. It is just more confusing.

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About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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