Derivatives suitability test FAQ
How do I qualify to trade derivatives?
Derivative trading is restricted to Qualified Investors; individuals, or entities meeting predefined criteria stipulated by the Virtual Assets Regulatory Authority (VARA).
In order to be eligible to be Qualified Investors, you must meet at least one of the following criteria:
Maintain net assets of at least AED 3,500,000* (or its equivalent in a foreign currency) in the last 30 days; or
Have an annual income of AED 700,000 or more.
You'll also need to:
Successfully complete a risk assessment to help understand your approach to different types of risks.
Successfully complete a knowledge assessment, with a minimum score of 80% to qualify.
Note: *as per VARA regulations, your virtual asset holdings will be calculated at 50% of the market value.
What's a derivatives knowledge assessment and why is it important?
A derivatives knowledge assessment is a comprehensive evaluation designed to check your suitability or appropriateness for engaging in derivatives trading activities. The assessment encompasses an analysis of multiple factors, including but not limited to the individual's financial standing, investment acumen, risk tolerance, investment objectives, and prior trading experience.
Why do I have to do a knowledge assessment?
Derivatives can be a complex product that requires a certain level of expertise to understand and trade effectively. Local regulations specify that users are required to complete a knowledge assessment to evaluate whether you have the financial means, risk tolerance, and understanding of derivatives to engage in trading responsibly.
How's being a Qualified Investor different from being a retail investor?
A Qualified Investor is someone who meets the necessary criteria to trade derivatives. In contrast, a retail investor who doesn't meet these qualifications isn't eligible to take part in derivative transactions.
What derivatives products can I access?
OKX Middle East Fintech FZE offers crypto derivatives, such as futures, options and perpetuals to Qualified Investors, along with the ability to trade using leverage. The list of products available to qualified clients is subject to change. Please refer to our Terms of Service and website for details of current products and services.
Is the derivatives knowledge assessment a one-time requirement, and what are the consequences of failing it?
The frequency of the derivatives suitability test depends on regulatory requirements and institutional policies. It might be required as a one-time prerequisite for certain investors, or it might need to be periodically retaken to ensure continued understanding of derivatives and their risks. You'll have the opportunity to retake the test if needed.
Are there any consequences for providing false information on a derivatives suitability test?
Providing inaccurate information on a derivatives suitability test can result in significant repercussions, including legal and financial penalties. These actions may be considered fraud or misrepresentation, potentially leading to legal liabilities. Depending on local laws and the seriousness of the inaccuracies, individuals may even face criminal charges.The purpose of the suitability test is to protect you by verifying your comprehension of the risks in derivatives trading and your financial capability to manage potential losses. Supplying false information undermines the integrity of the suitability assessment and may subject you to risks beyond your readiness to handle.
What documentation do I need to submit?
| Category | Accepted documents |
|---|---|
| Cash holdings | Local bank statements, foreign bank statements. |
| Portfolio value | Broker statements, bank statements, asset manager holding statements, tax filings/receipts. |
| Real estate (excluding your primary place of residence) | Title deeds, appraised valuations, rental agreements, property valuations, sale contracts. |
| Virtual assets | Snapshots of holdings at OKX, statements from other CEX/DEX platforms, evidence of cold storage. |
| Gross income | Bank statements showing monthly salary and/or rental income of the past 3 months, employer salary letters, documents proving annual profit for non-salaried individuals. |
Note:
Local or foreign bank statements must show your cash holdings over the last 30 days.
Statements of your portfolio value and your virtual asset holdings must be generated within the past 7 days.
Property valuation documents must be issued by RERA or a UAE-based bank.
What happens if my application is rejected?
If we determine that the documentation you submit is insufficient to demonstrate that you fall under one of the categories of Qualified Investor, we will notify you that your application has been rejected. You should only attempt to reapply if your circumstances have changed materially, and you believe that you're now eligible to be a Qualified Investor based on VARA's Investor Classification.