A group of Minibond investors met up with officials from MAS on Monday evening. Click on this link to read a summary of the discussion.
Separately, our Finance Minister, Mr Tharman Shanmugaratnam, made a statement about Lehman Bonds (not minibonds!) over the weekend.
There have to be improvements in marketing and selling and disclosure. There are learning points coming out from the recent problems.
(But) let’s not swing to over-regulation because that is going to increase costs and it’s going to reduce the range of products that meet everyone’s needs.
Should MAS say A1 bonds should not be bought by people? I think that would be over-regulation, but it turned out that Lehman Bonds went bust.
So it’s an example of how there is risk in the system, there is no way you can get it out of the picture by over-regulation unless you over-regulate to the extent you cut out options to sensible investors.
Was he was under the mistaken impression that normal Lehman bonds were sold? Or perhaps the journalist misquoted him.
In Hong Kong, regulators are “urging” distributors to buy back the Minibonds. They have gotten the trustees to disclose to the distributors details of the minibonds’ underlying collateral, so investors can get a clearer picture of where exactly they stand.
In Singapore, the trustee, HSBC Institutional Trust Services, told the Monetary Authority of Singapore that it will consider proposals from some investors to replace Lehman as a counterparty for all series of the so-called “minibonds” linked to the collapsed U.S. bank.
Hope for Minibond Investors (Today)
If this proposal does not go through, the trustee will undertake an orderly disposal of the securities and use the proceeds to pay off noteholders.