Martin Lee @ Sg
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MAS Investor Alert List Questions

A couple of questions were asked in parliament regarding the MAS Investor Alert List:

  1. Whether MAS can take more pro-active measures to enhance consumer awareness of the Investor Alert List (IAL), hence giving consumers the necessary protection in assessing the credibility of gold investment buy-back schemes?
  2. How many investors are affected by the investigation into Genneva Pte Ltd?
  3. Why MAS does not regularly publicise the companies on its Investor Alert List through the media?
  4. How many other gold bullion companies are currently operating buy-back schemes?
  5. Whether the MAS or CAD will consider giving updates to the public on its investigations?

The reply given by Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in Charge of MAS:

1   The MAS Investor Alert List (IAL) contains a list of companies which are not licensed by MAS but, based on information received by MAS, may have been wrongly perceived as being licensed or authorised by MAS. MAS assesses public feedback as well as documentary evidence on the entity before placing it on the IAL. The list is updated regularly.

2   The IAL is publicly available on the websites of MAS and MoneySENSE, the national financial education programme. Mdm Lee Bee Wah suggests that MAS should publicise companies listed on the IAL through the media. In fact, MAS works with the English and vernacular media on programmes to educate consumers about unregulated investment schemes. In 2012 alone, about 20 media stories about unregulated schemes and entities listed on the IAL have been carried in the papers and on TV and radio. Such media programmes often include MoneySENSE consumer tips on the risks involved in dealing with unregulated entities.  Likewise, the MoneySENSE website has a Consumer Alerts section which publicises media articles and consumer guides on schemes such as landbanking and gold trading.

3   However, the IAL is not exhaustive. The fact that a company is not listed on the IAL does not mean that the company is credible. Consumers must exercise caution when dealing with all unregulated entities, not just entities that are listed on the IAL. Consumers can check if an entity is regulated by MAS, as well as the activities it is licensed to conduct, by referring to the Financial Institutions Directory on the MAS website.

4   However, the fact that a company is listed on the IAL does not necessarily mean that it has breached any of MAS’ regulations. Nor does it mean that MAS has the power to monitor its activities or to investigate its operations. Where there is evidence of fraud or any other breaches of law, action will be taken by the appropriate enforcement agency.

5   There are currently five companies operating buy-back schemes listed on the IAL. Some companies are currently under investigation by CAD. The exact number of affected investors is not known as the investigations are still ongoing. In the meantime, the public can refer to CAD’s website for updates on the investigation.

6   MAS will continue its efforts in educating Singaporeans on the pitfalls in dealing with unregulated entities and the risks of unregulated schemes such as gold buy-back schemes.

7   The public has to play its part. Before committing to any investment scheme, one should first check if the entity is licensed by MAS and what regulated activities it is authorised to conduct. If the entity is not regulated, then check if it is on the IAL. The second critical step is to assess if the potential returns offered are realistic and what the risks are, and seek to understand how these operators generate their returns. Thirdly, consumers should assess if there is any protection or recourse if the entity fails. It is truly unfortunate when people lose their money in schemes that turn out to be fraudulent or unsustainable. If every consumer were to follow these steps, we would have far fewer cases of people losing their money this way.

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