Back Custom print Link Text Only Rich Text Print

  • Suitability and Appropriateness Assessment for Retail Clients

    • CRA-4.1.7

      Licensees, prior to offering portfolio management service, investment advice or complex products such as but not limited to derivative products, margin or leverage products or products with features that may make it difficult for a retail investor to understand the essential characteristics of the product and its risks (including the pay-out structure and how the product may perform in different market and economic conditions), must undertake a suitability and appropriateness assessment for retail clients (investors other than accredited investors) to determine the suitability and appropriateness of crypto-assets products and services for retail clients. Licensees must gather sufficient information from every retail client to be in a position to decide whether the crypto-asset product and/or services are suitable and appropriate for the client.

      Added: April 2023

    • CRA-4.1.8

      Licensees may seek the following information for the purposes of suitability and appropriateness assessment:

      (a) Client’s knowledge and experience:
      (i) the types of investment services and transaction which the client is familiar with;
      (ii) the nature, volume and frequency of the client’s transactions with trading and investments; and
      (iii) the level of education, profession or (if relevant) former profession of the client.
      (b) Client’s financial situation:
      (i) the source and extent of the client’s regular income;
      (ii) the client’s assets, including liquid assets, investments and real property;
      (iii) the client’s regular financial commitments;
      (iv) the ability to bear losses.
      (c) Client’s investment objective:
      (i) the client’s investment horizon;
      (ii) the client’s risk preferences, risk profile and risk tolerance; and
      (iii) the purposes of the investment.
      Added: April 2023