Introducing Brokers who onboard non-discretionary end clients wishing to trade complex products must ensure that their clients complete the mandatory Appropriateness Test. This test is designed to verify that the product is suitable for the client before they are allowed to submit a trade.
Platform experience (SaxoTraderGO example)
1. The client is presented with a warning and as soon as the client tries to place a trade, he receives a pop-up message informing them that the product knowledge test is required, providing a link to the test page.
2. Client can answer questions and press submit, once completed. It is also possible to learn more about the product from the test page.
3. When the test is passed, the client receives a platform confirmation and can place a trade.
4. When the client fails the test, the following message is shown.
5. If the client has two unsuccessful attempts, the client can see when to retake the test on the platform (after 24 hours).
Questions & Answers
Q. When will your clients be prompted with the Appropriateness Test (APT), and will they still see complex products?
A. As a new client, they will be onboarded and gain access to the platforms as usual. Complex instruments will still be visible to them. The Disclaimer and the “block” will appear the first time they try to place an order for an instrument they are not deemed appropriate for.
Q. Will my existing clients be asked to complete the Appropriateness Test?
A. From November 2024, we will start informing all existing clients who traded complex products within the last year to complete the Appropriateness Test.
Q. Why do your clients need to pass the test now?
A. When they trade complex financial instruments for the first time, we must ensure they have the necessary knowledge by requiring that they should take a knowledge test (appropriateness assessment). For uncomplicated instruments like stocks and most mutual fund shares, trades are executed without a knowledge test. However, for complex instruments such as options, futures, etc., Saxo Bank must confirm that they understand the trade implications. They must complete an extended appropriateness test when they first trade a complex instrument. This assessment ensures they can trade complex financial instruments based on their demonstrated knowledge and experience, limiting their trades to products where they are sufficiently knowledgeable.
Q. Where can my clients access the Appropriateness tests?
A. Your clients can access the Appropriateness tests directly via the Product overview of the given instrument, Trade Tickets, via their Portfolio banner (if using SaxoTraderGO), or under Trading Products in Settings.
Q. What happens if my client fails the test?
A. Your clients have 2 attempts to take the test (2 versions of the questionnaire). If they fail both, there is a cool-down period of 24 hours, giving them time to familiarize themselves with the product and the associated risks if needed. After the cool-down period, they can take the two tests again.
Q. What if my client already has a position in a complex instrument?
A. If you cannot pass the Appropriateness Test by January 2025 but already hold a complex instrument, your position will go on “reduce only” until your client has passed the test.
Q. Does my client need to take the new Appropriateness Test if they are already deemed appropriate?
A. If your client has already passed the test, they remain appropriate until renewal is needed. They will not lose their current test status.
Q. My client failed the test and does not know what they are doing wrong – can we help them?
A. Unfortunately, we cannot guide nor provide the correct answers. We can only direct you to read more about the instruments on the platform, our home page, help portal or attend Webinars.
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