1. What are Systematic Investment Plans (SIP)?
An SIP is an approach to invest small, fixed amounts at a specified frequency (usually monthly) into a pre-defined market portfolio to help an investor meet his or her – often long term – financial goals.
2. What are the features of SIP?
- A fixed amount of money is auto debited from the client’s saving account each month on a predetermined date
- The amount then funds a pre-defined market portfolio
- The client will be allocated a certain number of units in accordance with the ongoing Net Asset Value or NAV
- Each time a sum of money is invested, there will be more units added to the account of the investor
3. Is any Retail banking client of NBO eligible to subscribe for a SIP?
Yes
4. Can NBO staff invest through SIPs?
Yes. All employees of NBO, including contract staff, can invest in SIPs.
5. Can expatriates invest in SIPs?
Yes
6. Can an expatriate client continue the SIP even after leaving Oman?
The SIP continues as long as there are funds available in the account to be debited. An expat may fund his/her account, for continuity of the SIP plan, even after leaving Oman. Standard KYC checks are applicable on the client profile and source of funds to ensure continuity of banking services.
7. Can an investor start a SIP for his or her children?
Yes. The SIP may be started in the name of minors with the investor as a Guardian.
8. What is the minimum amount required to start a SIP?
| Segment | OMR per month |
| Sadara | 1,000 |
| Mazaya | 100 |
| Youth |
| Staff |
9. What is the frequency of the SIP payment?
Monthly
10. Can a SIP be set up with a daily, quarterly or annual payment?
No
11. Can a SIP be cancelled after it is set up?
Yes
12. Are there any cancellation fees?
No
13. Can a SIP be suspended?
Yes
14. Is there a minimum age requirement for investing in SIPs?
No
15. Is there a maximum age requirement for investing in SIPs?
Yes. SIPs should not be marketed to client older than 65.
16. Can an investor reduce the monthly payment once the plan commences?
No
17. Can an investor increase the monthly payment once the plan commences?
Yes. The incremental amount will be charged in line with the investor’s existing fee structure.
18. Does a SIP have a lock-in period?
No. The investor is free to exit the plan at any point in time.
19. Can a client set up more than one SIP?
Yes. There is no limit on the number of SIPs. Each SIP Plan though will be charged a fee
20. Is a SIP capital protected?
No
21. Does a SIP guarantee returns?
No
22. Does the bank charge a fee to the client for investing in SIPs?
Yes
23. What are the fee options that may be extended to a client?
An investor in SIP may be offered the following fee structures:
| Pricing Type | One-Time, Lifetime | Pay-As-You-Go |
| Description | 100% of the first installment is charged as a one-time, lifetime plan set-up fee | 3% of the monthly installment is charged towards fees |
| Frequency | Once | Recurring |
| Benefits | - The Client pays a fee only once
- Unlimited, Free Switch-Outs from the SIP into Standalone Mutual Fund's / Exchange Traded Funds
Please note that Switch-Outs to Fixed Income Securities aren't permitted
| - Clients could suspend or cancel an existing plan without incurring 'sunk-fee' losses
- Advantageous to clients planning to allocate large investment amounts across a shorter time frame
|
24. If an investor avails of a Pay-As-You-Go Fee Plan, is he or she charged a 3% on every monthly payment?
Yes. This 3% charge applies to every SIP payment made until the last payment date. So that there is no doubt whatsoever, if an investor opts for a ten-year SIP payment plan, investing $3,000 every month, then he or she would be charged a 3% i.e., $90, every month on each of the 120 monthly payments.
25. Are there any cancellation or redemption charges?
No
26. Is the investor eligible for a full or partial refund of plan fees on plan redemption or cancellation?
No. Fees once charged will not be refunded.
27. Is an investor charged a penalty fee if a SIP payment is missed due to insufficient funds?
No
28. If an investor leaves Oman, is he or she eligible for a fee refund?
No. Fees once charged are not refunded.
29. Can the client invest in a more than one mutual fund through a single SIP?
Yes. The client can invest in multiple mutual funds through a single SIP
30. Are there specific auto-debit dates for a SIP in a month?
Yes. The investor has a choice of three auto-debit dates: 1st, 15th and 30th
31. What happens if one of these dates occur on a weekend or a national holiday?
The SIP payment is then processed on the next working date
32. What is the minimum period for which a SIP must be set up?
1 month
33. What is the maximum period for which a SIP can be set up?
9999 months
34. Is there a limit to the number of switch-outs that can be done under the One-Time, Lifetime Fee Plan?
No
35. Which fee plan is best suited for clients in the age group of 0 – 55?
One-time Lifetime Fee Plan
36. Which fee plan is best suited for clients in the age group of 55-65?
Pay-As-You-Go Fee Plan
37. Can an investor start a SIP in Fixed Income Securities as well?
No. A SIP is limited to investments in Mutual Funds only.
38. Can an investor who has availed of the One-Time Lifetime Fee Plan switch out holdings to a Bond?
No
39. Can an investor who has availed of the One-Time Lifetime Fee Plan switch out holdings to any Mutual fund?
Yes. The mutual fund would need to be listed on the All Funds Platform though.
40. Can an investor change the allocation in a SIP once the plan commences?
No. But, the investor can create another SIP though with an allocation of choice. Alternatively, if the investor has availed of the One-Time, Lifetime Fee Plan, he or she may switch out units to any other Mutual Fund. This is subject to the target Mutual Fund being approved and listed for trade on the All Funds Platform.
41. Can an investor redeem his holdings from an ongoing SIP?
Yes
42. Does a redemption of holdings from an ongoing SIP affect the continuity of the plan?
No. The SIP continues:
- Until the investor either cancels the plan or,
- Until the plan completion date
43. How many standing instructions are required for a SIP to function?
There are two SI’s that are required to be set up:
| From Account | To Account | Form |
| OMR Savings/Payroll Account | Foreign Currency Investment Account | SI form, available at any branch |
| Foreign Currency Investment Account | Market Portfolio | SIP Form, available with the Wealth Advisor |
44. Can a special exchange rate be extended to the client for a SI set up on the OMR Savings/Payroll Account?
Yes. A special exchange rate of 0.3855 can be set up for the client.
45. Is the SIP a completely automated product solution?
Yes. There is no manual intervention required if there are no alterations to the plan. The SIP requires manual intervention only during the following stages of the plan:
- Initial Setup
- Cancellation
- Upsize
- Switch out of units
46. Is there an after sales support process around SIPs?
Yes. The Wealth Advisor will share portfolio updates and keep an investor informed of all developments in the global financial markets. All aspects of portfolio review will be overseen by and is the sole responsibility of the Wealth Advisor.
47. Who is eligible to market SIPs?
All retail banking employees are eligible to introduce SIPs to eligible clients but are not permitted to conclude the sale.
48. Who is responsible to conclude the sale of SIPs?
Only Wealth Advisors are permitted to conclude the sale of SIPs to qualified clients.
49. What is the revenue recognition approach for the One-time, Lifetime Fee Plan?
The first payment to the SIP will be charged as a One-Time Lifetime Fee. The employees involved in the Referral/Closure process are eligible for incentives on these revenues.
