Match investors' needs

Nov 17, 2008

THE Monetary Authority of Singapore (MAS) may require financial services companies to sell products that better match investors' needs and include clearer risk labels linked to the investments, Finance Minister Tharman Shanmugaratnam said in Parliament on Monday. 'If an investor has been sold a product that's clearly unsuitable, if there are clear-cut cases of a mismatch, then the financial institution will ensure the investor gets proper restitution,' he said. 'That's the way we ensure there's trust in the system.'

Mr Tharman was replying to questions on the MAS probe into complaints by retail investors who said they were misled into buying structured products linked to the now-bankrupt Lehman Brothers Holdings.

Individual investors in Hong Kong, Singapore, and Taiwan have demanded refunds from banks selling them structured notes linked to Lehman.

DBS Group Holdings, Singapore's biggest bank which said late Oct most of the securities are now worthless, has estimated compensation to investors in cases where the bank didn't meet the 'standards' it upheld could amount to as much as $80 million.

Lehman's bankruptcy on Sept 15 sparked protests by investors in Hong Kong and Singapore seeking compensation for the products sold by DBS and other financial services companies.

'What's far more useful is to ensure good disclosure: simple, clear, good disclosure,' said Mr Tharman, adding that the monetary authority will study 'all' investor complaints.

He also said the note buyers should bear the responsibility of the investment outcome if there's no mis-selling by the banks, though he said his 'sympathies' lie with the investors, reported Bloomberg news.

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