Question
Ms Sylvia Lim: To ask the Senior Minister (a) whether structured notes similar to Lehman Brothers products were sold to small retail investors in the United States and in the same manner as in Singapore through bank branches; (b) if so, how disgruntled investors are being handled by the American Federal Reserve, compared to Singapore; and (c) if not, why such products were allowed for sale to small retail investors in Singapore in such a manner.
Mr Siew Kum Hong: To ask the Senior Minister (a) if he will provide an update on the progress of investigations by MAS into alleged mis-selling by financial institutions and the progress of the review of the marketing and sale of structured products; and (b) whether MAS is satisfied with the progress of the financial institutions in resolving customers’ complaints.
Main points of reply from Finance Minister, Mr Tharman Shanmugaratnam:
- It is conducting formal inquiries into the financial institutions and will take firm and appropriate regulatory actions where there are breaches of law or regulations.
- It is doing a review of its current regulatory regime. Care will be taken not to come up with overly prescription rules.
- Other than regulation, all stakeholders have a share to play. CEOs of all the financial institutions have been told to review their sales process.
- MAS has been following up with the financial institutions to ensure they are handling all complaints. All cases will be dealt with fairly, regardless of whether they fall into the vulnerable group or not, as long as there is mis-selling.
- Similar structured products have also been sold in other countries, including the UK, Australia, Germany, France, Hong Kong and Taiwan. Reports indicate that some investors have approached lawyers to look into pursuing arbitration claims with the Financial Industry Regulatory Authority (FINRA).
- In Singapore, a 3-step dispute resolution process has been set up.
To read the entire reply, you can refer to this news release on the MAS website.