Why are banks allowed to sell structured products that give poor value?

Mr Tan,

If there is a silver lining that comes out of this minibond/high note/jubilee fiasco, I would hope that its some serious soul searching by all stakeholders, investors, FIs & the government.

Investors have to ask themselves, what is their investment objective, really.
Structure deposits have been around for some time. I have never purchased any but each time I am at any bank, without fail, bank staff would try to promote them to me.
Over the years, I've seen the way they are structured becoming more and more complex & arcane.

My point is, if the general public has been losing money or making unsatisfactory returns, why have the banks been able to launch series after series of the same products ?

Regulators, are they really out to build a "world class" financial centre in Singapore ?

Efforts to develop a vibrant corporate bond market has fizzled out. Look at the corporate bonds listed on SGX, lacking both depth, breath & also market liquidity.

If the recently launched OCBC NCPS preference shares can yield 5 percent, then any good quality corporate can float coporate bonds at around 5 percent, which at 150 basis point spread to 15 year SGS govt bonds, seems about right.

So, if these alternatives are available, would investors need to even consider the structured deposit nonsense the FIs are putting out ??

Lastly, correct me if I am wrong. SGX, along with the KLSE, I think are the only 2 exchanges left in the whole wide world that allow contra trades, ie. allowing investors to sell shares that they have purchased within 3 days, before they are settled, without paying up first. All other exchanges require some sort of margin or deposit. Is this prudent risk management ? I rest my case.

Regards