In the past couple of years, many claims were made by investors who bought structured products which had collateralised debt obligations (CDOs) embedded in them.
Recently, it was reported that Goldman Sachs was being charged by the US Securities and Exchange Commission (SEC) with fraud in some of their CDO deals. In addition, some other banks might also be investigated.
In view of the developments in the US, someone wrote in to the Straits Times forum to ask whether MAS would be doing its own investigations into the troubled CDOs that were sold here.
The reply from MAS mentioned that MAS would take regulatory action where there is a breach but leaves it open whether it would be doing any investigations.
I refer to “Should MAS act?” (ST Forum, 24 April 2010).
Entities offering securities to the public in Singapore are required to comply with the Securities and Futures Act which, among other things, requires proper disclosure of the features and risks of the product. Where there is a breach of regulation or law, MAS will take appropriate regulatory action. MAS also monitors developments in various jurisdictions. However, not all developments in other jurisdictions will be equally applicable in Singapore.
Angelina Fernandez
Director (Communications)
Monetary Authority of Singapore