Individual investors in Hong Kong, Singapore, and Taiwan have demanded refunds from banks selling them structured notes linked to Lehman. -- PHOTO: REUTERS
THE approach taken to investigate the mis-selling of financial products is independent at every stage, without the process being overly legalistic and politicised, Finance Minister Tharman Shanmugaratnam told Parliament on Monday.
Match investors' needs
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.'
In fact the current process is superior to going straight to the courts and will lead to a fair outcome for investors he said.
Mr Tharman also said that the process will preserve trust in the system if it properly compensates investors who are deemed to have been mis-sold the product but not those who knowingly took the risk.
Mr Tharman was fielding questions from MPs over the progress of investigations by the Monetary Authority of Singapore into the alleged mis-selling of financial products that have lost their value due to being linked to the now collapsed investment bank Lehman Brothers.
In response to MP Inderjit Singh who questioned the independence of the panels reviewing cases of mis-selling of products Mr Tharman emphasised that the desire for independence is a valid and important one and is 'precisely what MAS' approach is providing.'
Mr Singh said that some of his residents and members of the public had suggested that the current panel may not be independent enough and would put investors at a disadvantage.
However Mr Tharman said that the current process ensures independence at each stage and also avoids being legalistic and politicised.
The three-step process, which offers an independent review of a case at each level, is therefore superior to going directly to the courts, and is more likely to lead to a fair outcome for the investors he said.
