http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=MMFLFJ67IQQ4&linkid=69b75443-86a5-4375-81d5-442df893c00f&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
7 Dec 2008
Nick Gentle
In the first 10 months of this year, complaints about banks reached more than double the figure for the whole of 2007 – and that is excluding the 10,000 complaints about their sale of minibonds that lost their value when Lehman Brothers collapsed.
While the Hong Kong Monetary Authority agreed to release the figures – 1,050 up to October 31 against 469 last year – it would not say which banks were the subjects of the complaints, nor what complaints were about.
The HKMA claims it is bound by the Banking Ordinance to keep that information secret.
However, commentators question whether withholding such information is in the public interest. David Webb, a campaigner for better corporate governance, said consumers were entitled to know whether financialservices providers were being complained about regularly.
“ Information is the lifeblood of free markets, and enabling investors and depositors to make informed choices is a good thing,” Mr Webb said. “ I think the HKMA should be much more transparent about its complaints and enforcement activities.
“I see no reason why the HKMA should not publish complaint statistics on a per-institution basis.”
To make sure larger institutions are not unfairly over-represented, the authority could state the figures as a percentage of a bank’s unique account holders.
Mr Webb noted that the Securities and Futures Commission, which regulates stockbrokers and listed companies, regularly published reports on enforcement action it has taken and complaints it has received.
“The HKMA’s traditional reason for not publicising disciplinary action has been that it might undermine confidence in the banks concerned. My response would be: ‘So what? It should’.”
An HKMA spokesman said the authority investigated all complaints to decide whether and how they could be taken further.
“Upon receipt of a written complaint, we will examine it and the written response from the bank concerned,” the spokesman said. “Our focus is on whether the bank’s complainthandling procedures are working properly.
“Should there be concerns about the bank’s handling of the complaint, we will refer the complaint to the bank for reinvestigation and a further reply to the complainant.”
If complaints related to breaches of the Banking Code of Practice, the HKMA would work with banks to address any issues, the spokesman said.
“ The HKMA has a supervisory interest in cases where a bank may have acted in a way that is improper or imprudent,” he said. “The HKMA will pursue these issues … and where necessary, require remedial action to be taken by the bank.”
But Civic Party lawmaker Ronny Tong Ka-wah, who has tabled a Legislative Council resolution asking the government to review the regulatory regime, said keeping issues between the regulator and the bank might not be in the public interest.
“ At the very least we should be able to see a breakdown of the nature of the complaints,” he said. “Otherwise, how are consumers going to know what they should be looking for and can expect in terms of service?”
Sunday, December 7, 2008
Dealing with an adviser - what to look out for
The adviser is required to disclose to you about the charges, when you buy a life insurance policy. Read the answer to Q8 in this FAQ. Read the rest of this FAQ:
http://www.moneysense.gov.sg/publications/guides_publications/Consumer_Portal_FAAGuide.html
Q8: What information is a FA representative required to disclose to me when recommending an investment product?
A: When recommending a unit trust or life insurance policy, a FA representative is required to disclose to you the key features of the product including the following:
1. Nature and aim of the product Whether the product is a life insurance policy or a unit trust, and whether it is meant for protection, savings or investment.
2. Benefits of the productInformation on the amount and timing for payment of benefits and whether the benefits are guaranteed or non-guaranteed.
3. Risks of the productDetails of the risk factors that may result in the benefits payable being less than the illustrated values (for a life insurance policy), and the risks stated in the prospectus or profile statement (for a unit trust).
4. Details of the product providerThe business address and permitted activities of the product provider, and the relationship between the product provider and the FA.
5. Fees and charges to be borne by youDetails of the amount and nature of fees and charges to be paid by you, and the frequency of payment.
http://www.moneysense.gov.sg/publications/guides_publications/Consumer_Portal_FAAGuide.html
Q8: What information is a FA representative required to disclose to me when recommending an investment product?
A: When recommending a unit trust or life insurance policy, a FA representative is required to disclose to you the key features of the product including the following:
1. Nature and aim of the product Whether the product is a life insurance policy or a unit trust, and whether it is meant for protection, savings or investment.
2. Benefits of the productInformation on the amount and timing for payment of benefits and whether the benefits are guaranteed or non-guaranteed.
3. Risks of the productDetails of the risk factors that may result in the benefits payable being less than the illustrated values (for a life insurance policy), and the risks stated in the prospectus or profile statement (for a unit trust).
4. Details of the product providerThe business address and permitted activities of the product provider, and the relationship between the product provider and the FA.
5. Fees and charges to be borne by youDetails of the amount and nature of fees and charges to be paid by you, and the frequency of payment.
The Online Citizen celebrates its second anniversary
The Online Citizen celebrates its second anniversary. Visit this website for the speeches on "Social Justice and Fairness". It also contains an update of the class action for the minibonds and credit linked notes.
http://theonlinecitizen.com/2008/12/toc-celebrates-its-2nd-year-anniversary/
http://theonlinecitizen.com/2008/12/toc-raised-social-issues-for-people-at-2nd-anniversary/
Six months ago, TOC has an average of 3,000 visitors a day. Today, it has an average of 15,000 visitors a day - a five fold increase. TOC is the work of about 60 volunteers - young and not so young. I write a article weekly for TOC.
Congratulations to TOC. It is becoming an important source of alternative news and views about Singapore.
http://theonlinecitizen.com/
http://theonlinecitizen.com/2008/12/toc-celebrates-its-2nd-year-anniversary/
http://theonlinecitizen.com/2008/12/toc-raised-social-issues-for-people-at-2nd-anniversary/
Six months ago, TOC has an average of 3,000 visitors a day. Today, it has an average of 15,000 visitors a day - a five fold increase. TOC is the work of about 60 volunteers - young and not so young. I write a article weekly for TOC.
Congratulations to TOC. It is becoming an important source of alternative news and views about Singapore.
http://theonlinecitizen.com/
Adviser is required to disclose and explain the charge
Dear Mr. Tan
I wanted to terminate my ID2 and was told that I have to pay a charge of 15% of the premium for 5 years, making a total of 75%. I was not aware of this charge, which was not disclosed to me by the adviser. Is it true that I have to pay this charge? Is it a fair charge?
REPLY
During my time, I recall that the charge for ID2 is 15% for 3 years only. The total of 45% was much lower than an average of 150% charged in the market. I was not aware that the charge has been increased to 15% for 5 years. You can check with the adviser.
If you have not been informed by the adviser about the charge at the time that you bought the policy, you can lodge a complaint with MAS. The adviser is required to disclose and explain the charge to you, as set out in A5 of Q8 in this attached document from MAS:
http://www.moneysense.gov.sg/publications/guides_publications/Consumer_Portal_FAAGuide.html
I wanted to terminate my ID2 and was told that I have to pay a charge of 15% of the premium for 5 years, making a total of 75%. I was not aware of this charge, which was not disclosed to me by the adviser. Is it true that I have to pay this charge? Is it a fair charge?
REPLY
During my time, I recall that the charge for ID2 is 15% for 3 years only. The total of 45% was much lower than an average of 150% charged in the market. I was not aware that the charge has been increased to 15% for 5 years. You can check with the adviser.
If you have not been informed by the adviser about the charge at the time that you bought the policy, you can lodge a complaint with MAS. The adviser is required to disclose and explain the charge to you, as set out in A5 of Q8 in this attached document from MAS:
http://www.moneysense.gov.sg/publications/guides_publications/Consumer_Portal_FAAGuide.html
Offer of 30% compensation
Two investors met me at Speaker's Corner yesterday. They received offer from their distributor (stockbroker) of 30% compensation and are given a deadline to accept it. They asked for my advice.
My view is that a fair compensation is 50%. If the distributor offers 50%, you should accept it.
For the 30% offer, I suggest that you let it lapse and wait for a better offer. If you wait until February, the prospect of the class action may be clearer. At that time, your option will be clearer.
However, if you are willing to take 30% and call it quits, you should decide on your own. It is better than nothing.
My view is that a fair compensation is 50%. If the distributor offers 50%, you should accept it.
For the 30% offer, I suggest that you let it lapse and wait for a better offer. If you wait until February, the prospect of the class action may be clearer. At that time, your option will be clearer.
However, if you are willing to take 30% and call it quits, you should decide on your own. It is better than nothing.
The CDO time-bomb
The CDO timebomb – how it works and why it could sink or save the world economy
Wednesday, 19 November 2008
Alan Kohler
http://www.smartcompany.com.au/Free-Articles/The-Briefing/20081119-The-CDO-timebomb--how-it-works-and-why-it-could-sink-or-save-the-world-economy-Kohler.html
Extracts:
.... the bankers who created the synthetic CDOs knew exactly what they were doing. These were not simply investment products created out of thin air and designed to give their sales people something from which to earn fees – although they were that too.
They were specifically designed to protect the banks against default by the most leveraged companies in the world. And of course the banks knew better than anyone else who they were.
As one part of the bank was furiously selling loans to these companies, another part was furiously selling insurance contracts against them defaulting, to unsuspecting investors who were actually a bit like “Lloyds names” – the 1500 or so individuals who back the London reinsurance giant.
Except in this case very few of the “names” knew what they were buying. And nobody has any idea how many were sold, or with what total face value.
Wednesday, 19 November 2008
Alan Kohler
http://www.smartcompany.com.au/Free-Articles/The-Briefing/20081119-The-CDO-timebomb--how-it-works-and-why-it-could-sink-or-save-the-world-economy-Kohler.html
Extracts:
.... the bankers who created the synthetic CDOs knew exactly what they were doing. These were not simply investment products created out of thin air and designed to give their sales people something from which to earn fees – although they were that too.
They were specifically designed to protect the banks against default by the most leveraged companies in the world. And of course the banks knew better than anyone else who they were.
As one part of the bank was furiously selling loans to these companies, another part was furiously selling insurance contracts against them defaulting, to unsuspecting investors who were actually a bit like “Lloyds names” – the 1500 or so individuals who back the London reinsurance giant.
Except in this case very few of the “names” knew what they were buying. And nobody has any idea how many were sold, or with what total face value.
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