Discretionary Trading
FAQ for Investors
- What is Discretionary Trading (“DT”)?
DT is a service provided by a Participating Organisation (“PO”) for its client (investor) where investment goals are set with the investor based on the specified investment policies e.g. investment objective, risk tolerance. This service includes the execution of buy and sell orders and administration of the investor’s account.
- What is Shariah DT?
Shariah DT refers to an investment approach in which investment decisions are made by a portfolio manager in accordance with Shariah principles, but within scope of the DT framework and guidelines. It involves the active management of a portfolio of Shariah-compliant securities based on the portfolio manager's expertise and discretion.
- What is the purpose of DT and Shariah DT?
DT and Shariah DT aims to grow investors’ investment portfolio and wealth via a tailored and structured discretionary equity portfolio.
Shariah DT provides access for investors to invest in Shariah-compliant investment instruments via a tailored, structured and Shariah-compliant discretionary equity portfolio. - What are the requirements to participate in DT and Shariah DT?
(i) Investors are required to open a Discretionary Account (“DA”), separate from normal trading account. For Shariah DT, investors are required to have a separate Shariah DA;
(ii) Investors must make a cash transfer; and
(iii) Investors must not transfer existing securities in their holding or other types of collateral as capital. - Who can participate in DT and Shariah DT?
All types of investors are allowed to participate in DT and Shariah DT.
- Can non-Muslim participate in Shariah DT?
Yes, Shariah DT is not limited to Muslims. Non-Muslim investors who are interested in socially responsible investing or are aligning their investments with ethical principles may also participate in Shariah DT.
- How to participate in DT and Shariah DT?
Investors may contact the respective POs offering DT and Shariah DT to schedule an appointment to make the relevant arrangements for participating in DT and Shariah DT.
Kindly refer to the list of POs that offer DT and Shariah DT on our website. (Refer to: List of Participating Brokers) - Is there any minimum capital requirement to participate in DT and Shariah DT?
Each DT and Shariah DT structure offered by the respective POs may differ; hence, the minimum capital set may vary from one PO to another.
Investors are advised to check with the respective POs’ DT and Shariah DT structure to further understand the product features. - What are the fees charged for DT and Shariah DT?
Investors are advised to check with the respective POs offering DT and Shariah DT services as fees charged may vary from one PO to another.
- Is there any risk associated with DT and Shariah DT?
Like any form of investments, the risk of DT and Shariah DT may vary based on specific investment strategies and market conditions. Examples of market conditions include movements in interest rates, exchange rates, commodity prices as well as geo-political updates.
- What are the advantages of participating in DT and Shariah DT?
The advantages include access to professional investment management and diversification across different asset classes.
For Shariah DT, investors are able to invest in accordance with Shariah principles and socially responsible investment practices.