Petition to MAS Chairman by investors of DBS High Notes 5

Zombie said:

OK, then show me which clause in the FAA to say that the MAS duty is to ensure that the investors are kept safe from losing money.

No matter how safe and secured the business environment, someone somewhere will lose money. Is that too difficult to understand?

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I do not agree. Safe and Secure means no one must lose money. In financial services offered, no one participate to lose money. As a regulator, through its administering of the FAA, it must ensure that is true.

Whether anyone loses money or not, the reality is that some people do lose money.

However, as a regulator like MAS, it does not find its relevance to investors by saying it strives to provide a safe and secured environment and yet will lose money. This is oxymoron statement.

Don't ask me to find specifically this clause or that clause in the FAA please. If you read the FAA in its intentions and motive, it is allowing MAS push for the objective of Sinkiepore to be a centre of excellence in the financial services world. How does one say that it is a centre of excellence if investors can lose money and there is no institution or government body to protect the investors at all??

Zombie said:

Don't anyhow shoot me to holland, ok?

Where can you find "Product Development and Pricing of Products" in Financial Advisors Act? Have you read the FAA or not?

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Got lah. Use your brain when you read all those convoluted clauses, sub-clauses and parenthesis, etc, etc. If not, if you are lazy, just do a search for "product pricing" and you will find it.

MAS has an iron-clad FAA Act when it comes to the FAA to be used on the FIs.

However, when trouble comes its way, I hope it does not try to run away like you are doing now...claiming cannot find this clause, cannot find that clause...like that say, so no one is responsible but the investors themselves, is it?

masgnoeL said:

Got lah. Use your brain when you read all those convoluted clauses, sub-clauses and parenthesis, etc, etc. If not, if you are lazy, just do a search for "product pricing" and you will find it.

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Do a search yourself.
Stop using unnecessary unkind words.

masgnoeL said:

I do not agree. Safe and Secure means no one must lose money.

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Do you understand the meaning of competition in the business world?

Zombie said:

Do a search yourself.
Stop using unnecessary unkind words.

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Sorry I have used unkind words. But fact are facts. Ask Mr. Heng Swee Kiat if he feels MAS can be totally absolved from blame or not. While the investors are definitely partly to be blamed for not doing their own due deligence provided they know how, the whole premise of allowing structured products to be sold to retail investors is decidedly flawed and this is, as a matter of fact, a regulatory matter, hence MAS cannot absolve itself from blame. Don't agree? Well, que sera sera.

Zombie said:

Do you understand the meaning of competition in the business world?

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I understand co-opetition. Where it is win-win-win for all. No one loses.

masgnoeL said:

Sorry I have used unkind words. But fact are facts. Ask Mr. Heng Swee Kiat if he feels MAS can be totally absolved from blame or not. While the investors are definitely partly to be blamed for not doing their own due deligence provided they know how, the whole premise of allowing structured products to be sold to retail investors is decidedly flawed and this is, as a matter of fact, a regulatory matter, hence MAS cannot absolve itself from blame. Don't agree? Well, que sera sera.

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I must stress that I am not trying to discredit you.

You see, I just don't like seeing TKL misleading people. You may think otherwise. If you've watched BlogTV, the very first comment he made was something like MAS and FIs are fully responsible for the whole incident. This kind of statement focuses anger and hatred on the ones that are supposed to help the people solving their problems. Some were saved. But I think there are even more agonising people, who cannot face the reality of losing their monies, than before.

Morally speaking, I agree that MAS should have done more.

still trust PAP. PUI! fight for bank fight for ang moh financial isntitutions also dont fight for you!

In my idle time, I wonder what our investors would be doing now with their investment profits if there is no Lehman debacle.

Would our investors be booking a long haul trip to some European, Chinese, American or Japanese destination? Or would they be buying a new car, a new 40-in plasma TV, or a new condo. Or would they be having their Sat and Sun buffet lunch and dinner at some upend hotels? Or would they be reinvesting their money in more investment schemes to earn even more profit?

Would they be praising the PAP gahment for giving them this opportunity to earn extra money? Or would they be casting a scornful eye at the PAP gahment for thinking that the titbits or cacang puteh thrown at them through such scheming things as Growth Package, Conservancy Fees absorption - and what-have-you goodies - and beggar take-it-or-leave-it attitude - would be sufficient to buy their hearts - and votes?

The reason why I have such thoughts is simply because I wonder why should such investors be blaming the gahment for their personal risk-taking ventures? Afterall, no one armed twisted them to invest for more gain. Would they also blame the gahment if their money vanished into thin air when they decide to accept their "good fortune" in some Nigerian internet scam?

I salute the Sg government for taking measures - not to save those investors - but to ensure that financial institutions are more careful with and be accountable for their clients' money.

Zombie said:

I must stress that I am not trying to discredit you.

You see, I just don't like seeing TKL misleading people. You may think otherwise. If you've watched BlogTV, the very first comment he made was something like MAS and FIs are fully responsible for the whole incident. This kind of statement focuses anger and hatred on the ones that are supposed to help the people solving their problems. Some were saved. But I think there are even more agonising people, who cannot face the reality of losing their monies, than before.

Morally speaking, I agree that MAS should have done more.

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Alright, just like you, I am not pushing any agenda here either but speaking from the sidelines, which makes it easier for me to put my points across, since I do not carry any emotions on this subject. I had been canvassed by banks to buy structured products and it started way back in 2001, if I am not mistaken. In the beginning of the launching of such products initially, it was known as Structured DEPOSITS. Notice I bold that word, for it is riding on the naivety and ignorance of many at that time who would consider all deposits as safe savings instruments. I outright rejected such products as I am by nature curious and like to dissect the components of anything in front of me.

When I was told it was principal protected and when these similarly ignorant investment officers were inter-changeably using "protected" with "guaranteed", it raised alarm bells for me. I did my own research and concluded that both "principal protected" and "principal guaranteed" were not the same and besides this, it made me wonder if "principal guaranteed" was really any guarantee at all if the bank collapses. Hence, the selling strategy of these investment officers had and still is by drawing you to the attention of big brother MAS as the mountain behind and of course the bank's reputation itself. Finally, they would say that the financial services sector of Sinkiepore is VERY WELL REGULATED BY MAS and if the product is risky, it would not be allowed to be sold by the bank.

This is a fallacy but it is not a lie either. MAS does regulate finely what products can be approved to be sold and what cannot. You must realize that MAS issue licenses to FIs, and so, to many, such licenses issued also come with its inherent doby-chop by MAS, for rightful reasons or otherwise, depending on the individual interpretation of each investor and each situation is different too.

Beyond the moral aspect that MAS has to grapple with, as a regulator, it has to ask itself whether it had sent the wrong signals to the financial marketplace whereby such structured products, which are so opaque in its component sub-funds, very different from unit trusts and the manner unit trusts are sold, an investor knows fully well the risks he is getting into, BUT not structured products, which are difficult to dissect its risks to the investors.

For the sake of argument, do you know that in the FAA, there is a strict difference in definition and in law for an investor who is an Expert Investor, an Institutional Investor, Retail Investor and also High-Net Worth Individuals.

So, Structured Product may be made available to other types of investors but not to Retail Investors and why not? There are products which only High-Net Worth Individuals are qualified to buy and there is a different yard-stick of measurement in the FNA if one is dealing with an Expert Investor.

Not to be long-winded about it, my belief that TKL is right to point the blame at the banks and MAS perhaps is two-prongs. One, TKL has always been against Structured Products and had warned of its risks for Retail Investors. Two, he knows what he is saying because he eat, breath and sleep financial planning all his life and as a CEO of a large FI for so many years and now that he is on his own, his comments while unkind to the bank and MAS, must be viewed in the light that he does know what he is talking about. From my own deliberations, TKL is suggesting the right approach for the aggrieved investors.

People pay thousands just to get half the advice from such a distinguished and well-informed individual like TKL in the financial sector.

Next thing you know, even victims of Sunshine Empire also want to be compensated. Lol.

masgnoeL said:

MAS does regulate finely what products can be approved to be sold and what cannot.
TKL is right to point the blame at the banks and MAS perhaps is two-prongs.

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TKL was an "insurance man" for many long years. That is probably why he is very conservative and expects each individual products to be regulated and approved by MAS. He did not keep up with the changes.

Read the 2003 speech by Assistant MD (market conduct) of MAS.

http://www.mas.gov.sg/news_room/sta...ch_by_AMD_Shane_Tregillis__13_March_2003.html

Especially this. Like I have said earlier, MAS must ensure that there are enough information for investors to make an informed investment decisions.

Shift from regulator as 'gatekeeper' to disclosure

14. In regulatory systems where the regulator operates as the ?gatekeeper?, it is the regulator rather than the market that determines, to a very large extent, which products are available to investors, which institutions are able to access the market, and what changes by financial service providers to structures, services and systems are allowed.

15. Most jurisdictions in this region and elsewhere operated to a significant extent on the basis of this ?gatekeeper? model of regulation. With financial markets liberalising, consumers demanding more choice in financial products and institutions expanding their range of products and services on offer, the regulator-as-"gatekeeper? model has become increasingly inconsistent with fostering a dynamic and innovative financial sector.

16. The introduction of the disclosure-based regime under the Securities and Futures Act, or the SFA, marks another milestone in the fundamental shift away from this 'gatekeeper' role in Singapore. Under the SFA, the regulator is not concerned with the merits of the particular product or service. Rather, the focus is on ensuring that there is adequate disclosure of product features and risks to investors, sales practices are fair, and institutions understand and properly manage the risks they take on from these new products or services.

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But then again, there are still some products that require conservative approach eg ILPs. There are mandatory requirements for these products to obtain written approval from MAS. Credit-linked notes, being investment in debt capital markets, do not fall into this category.

I tell you this chap clearly represents the 66.6% that voted PAP in the last GE. Kiasu kiasi mentality and always looking for PAP paternalistic help.

Conan the Barbarian said:

Wah Piang. Looks like these people will lie thru their teeth to get their
money back.

The worrying part is, he actually puts it in a petition and does not realize
it. Shows the type of upbringing this guy has.

The truth will set you free. Someone should tell him that.

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The approaches (and organisation):-
1. FIs (ad-hoc committee - 17-member committee representating 250)
2. Fidrec (individuals - 530 complaints so far, $50 fee, duration 6 months)
3. Courts (formal body - membership fees, legal fees, duration of a few years)

The sources of compensation funds:-
1. FIs buying back at full value
2. FIs buying back at market rate
3. restructuring (2 proposals received by MAS from FIs)

The claims: -
1. mis-selling (superior)
2. regulatory failure (inferior*)

The tricky path: -
1. The FIs cleverly admit mis-selling which is construed to mean the product sold does not match the risk tolerance or profile of the buyer. Now, for the well-heeled who claimed they have been mis-sold, it is very easy for the banks to refute and prove otherwise. Surely, at some point in time, these individuals must have bought products that are riskier or just as risky - like equities, foreign currencies, bonds, commodities, private properties, similar structured products, etc.
2. The brochures promised very high interest rates of more than 23% over 5 years. The interest payments are periodic and not lumpsum at the end of 5 years. Well-heeled investors have weak position in arguing they don't know the risk. A product can be credit-enhanced; it can also be yield-enhanced.
3. Investors who have gone to Fidrec and did not receive any compensation will not be looked upon favourably by the courts.

Useless measures: -
1. petitions
2. petitions
3. petitions

For example, petition to MAS to form committee to look into complains can at most save administrative time. Petition for collective compensation is useless as the onus is on the FIs (and they have decided to compensate the vulnerable only). The MAS is not a court nor an arbiter.

* It will not work under any circumstance:-
1. The government is not a source of (repayment) fund.
2. The government cannot order the FIs to compensate. It can only apply moral suasion which it has already done so.
3. The government is not liable in a legal contest.

Zombie said:

TKL was an "insurance man" for many long years. That is probably why he is very conservative and expects each individual products to be regulated and approved by MAS. He did not keep up with the changes.

Read the 2003 speech by Assistant MD (market conduct) of MAS.

http://www.mas.gov.sg/news_room/sta...ch_by_AMD_Shane_Tregillis__13_March_2003.html

Especially this. Like I have said earlier, MAS must ensure that there are enough information for investors to make an informed investment decisions.



But then again, there are still some products that require conservative approach eg ILPs. There are mandatory requirements for these products to obtain written approval from MAS. Credit-linked notes, being investment in debt capital markets, do not fall into this category.

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It is not TKL not keeping up with the times. If MAS said it is moving from regulator to disclosure, it surely did not reflect these changes in the FAA for the handling of Structured Products, but having said that, a bank licensed under the Banking Act is exempted from holding a FA license to act as an FA. Why this is so, ask MAS.

As I am not familiar with the Banking Act, I shall cease all my participation and responses on my thread if it refers to the manner banks are allowed in law to conduct their business of promoting Structured Products to Retail Investors.

In conclusion, from my own bottom-up perspective of financial affairs conducted, MAS is definitely still behaving as a regulator and not a de-regulator. If it had chosen to be a de-regulator, then before publicizing it, it has to align all the applicable laws contained in the relevant Acts to show that this shift in its position is backed by the various Acts it administers. It cannot be said to be so merely upon the sole declarations contained in a mere speech. It carries limited weight in law and we must all recognize that no individual or jurisdictive entity is above the laws of the land.

Have a good day.

Porfirio Rubirosa said:

I tell you this chap clearly represents the 66.6% that voted PAP in the last GE. Kiasu kiasi mentality and always looking for PAP paternalistic help.

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Despite numerous posting and replies by him, not once did he say how he was mislead or how the product was mis-sold to him.

Like the petition writers, he wants MAS to give the "right " answer for compensation to succeed.

By the way, according to a contact, the "best" reason thus far for their in-house oscar is a chap who said that he walked in to renew his FD, renewed his FD by an FP, returned home and filed the documents.
when this incident exploded, he family told him to check and to his shock and horror the FD was converted to a Structured Instruments. Matter referred to bank and quiet check revealed that he was a professional.

Here is another strong rumour. IRAS following up on "vulnerable" customers to account for the savings. Looks like the proxy game is up.

scroobal said:

Despite numerous posting and replies by him, not once did he say how he was mislead or how the product was mis-sold to him.

Like the petition writers, he wants MAS to give the "right " answer for compensation to succeed.

By the way, according to a contact, the "best" reason thus far for their in-house oscar is a chap who said that he walked in to renew his FD, renewed his FD by an FP, returned home and filed the documents.
when this incident exploded, he family told him to check and to his shock and horror the FD was converted to a Structured Instruments. Matter referred to bank and quiet check revealed that he was a professional.

Here is another strong rumour. IRAS following up on "vulnerable" customers to account for the savings. Looks like the proxy game is up.

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You know what? You are insidious. By numerous postings, do you mean me? Or Daniel Goh? Most likely you mean me. If it is me, then you must be selectively reading my posts. I did say in one of my posts that I have outright rejected Structured Products, so how could I be mis-sold?

Your second and last para are un-verified and is rumor-mongering. Do you have a hidden agenda here or are you just plain vindictive by nature?

masgnoeL said:

It is not TKL not keeping up with the times. If MAS said it is moving from regulator to disclosure, it surely did not reflect these changes in the FAA for the handling of Structured Products,

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With regards to Structured Deposits, MAS had "tailored" the FAA since 2004 to exempt FAs from various business conducts required under the FAA. In simple words, since 2004, FAs are no longer responsible under the FAA, to determine the right type of Structured Deposits for the clients. The role of gatekeeping was no longer required.

TKL is still harping on FAA section27 in his blog. He does not know what was going on.

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