Dear Mr Tan,
I have invest in DBS Note 10 by Capitaland recently. The consultant told me this note are like bond type which are low risk and principal protected unless Capitaland file for bankruptcy.
I am worried now with all these events like DBS note 5 and minibonds. Is it true this note 10 is principal protected? Please advise.
I call my DBS consultant to check if i sell how much will I get back. She replied I can only take back 90% of the amount that i invested. Can you advise me what should I do as I have little knowledge on investment. Should I sell or hold?
REPLY
I am not able to give advice on whether to hold or sell. You have to make your own decision, as it is your money.
Capital protected means that they will "try" to protect your capital and is not the same as "capital guaranteed".
Friday, October 3, 2008
Review internal complaints handling and resolution process
Dear Mr. Tan,
Do the three "well-regarded individuals" MAS has identified have sufficient resources especially manpower to do what MAS requires them to do
"review the internal complaints handling and resolution processes of the financial institutions (FIs) concerned to determine whether these processes are independent, fair and transparent. While these independent parties will not be involved in handling individual customer complaints, they will update MAS regularly on the progress of the complaints review.": and
" as part of the terms of reference of their appointment, the independent parties will highlight to MAS any shortcoming in the FIs’ processes as well as any issues that require regulatory follow up."?
If not, do they have to rely on the FIs they are overseeing to provide them manpower and other resources to ?
Will their terms of reference be made public?
Do the three "well-regarded individuals" MAS has identified have sufficient resources especially manpower to do what MAS requires them to do
"review the internal complaints handling and resolution processes of the financial institutions (FIs) concerned to determine whether these processes are independent, fair and transparent. While these independent parties will not be involved in handling individual customer complaints, they will update MAS regularly on the progress of the complaints review.": and
" as part of the terms of reference of their appointment, the independent parties will highlight to MAS any shortcoming in the FIs’ processes as well as any issues that require regulatory follow up."?
If not, do they have to rely on the FIs they are overseeing to provide them manpower and other resources to ?
Will their terms of reference be made public?
Securities and Futures Act
Does the financial institute break any of the provisions below, in their marketing of the structured products?
http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-289&doctitle=SECURITIES%20AND%20FUTURES%20ACT&date=latest&method=part
SFA's Section 199 (False or misleading statements, etc.) reads:
No person shall make a statement, or disseminate information, that is false or misleading in a material particular and is likely —
(a) to induce other persons to subscribe for securities;
(b) to induce the sale or purchase of securities by other persons; or
(c) to have the effect of raising, lowering, maintaining or stabilising the market price of securities,
if, when he makes the statement or disseminates the information —
(i) he does not care whether the statement or information is true or false; or
(ii) he knows or ought reasonably to have known that the statement or information is false or misleading in a material particular.
[SIA, s. 99; Aust. Corporations 2001, s. 999]
SFA's Section 200 (Fraudulently inducing persons to deal in securities) reads:
(1) No person shall —
(a) by making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be misleading, false or deceptive;
(b) by any dishonest concealment of material facts;
(c) by the reckless making or publishing of any statement, promise or forecast that is misleading, false or deceptive; or
(d) by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular,
induce or attempt to induce another person to deal in securities.
(2) In any proceedings against a person for a contravention of subsection (1) constituted by recording or storing information as mentioned in subsection (1) (d), it is a defence if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person.
(3) In any proceedings against a person for a contravention of subsection (1), the opinion of any registered or public accountant as to the financial position of any company at any time or during any period in respect of which he has made an audit or examination of the affairs of the company according to recognised audit practice shall be admissible, for any party to the proceedings, as evidence of the financial position of the company at that time or during that period, notwithstanding that the opinion is based in whole or in part on book-entries, documents or vouchers or on written or verbal statements by other persons.
[SIA, s. 100; Companies, s. 404 (4)]
By SFA's definition:
"securities" means —
(a) debentures or stocks issued or proposed to be issued by a government;
(b) debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate;
(c) any right, option or derivative in respect of any such debentures, stocks or shares;
(d) any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i) the value or price of any such debentures, stocks or shares;
(ii) the value or price of any group of any such debentures, stocks or shares; or
(iii) an index of any such debentures, stocks or shares;
(e) any unit in a collective investment scheme;
(f) any unit in a business trust; or
(g) any derivative of a unit in a business trust,
but does not include —
(i) futures contracts which are traded on a futures market;
(ii) bills of exchange;
(iii) promissory notes; or
(iv) certificates of deposit issued by a bank or finance company whether situated in Singapore or elsewhere;
http://statutes.agc.gov.sg/non_version/cgi-bin/cgi_retrieve.pl?actno=REVED-289&doctitle=SECURITIES%20AND%20FUTURES%20ACT&date=latest&method=part
SFA's Section 199 (False or misleading statements, etc.) reads:
No person shall make a statement, or disseminate information, that is false or misleading in a material particular and is likely —
(a) to induce other persons to subscribe for securities;
(b) to induce the sale or purchase of securities by other persons; or
(c) to have the effect of raising, lowering, maintaining or stabilising the market price of securities,
if, when he makes the statement or disseminates the information —
(i) he does not care whether the statement or information is true or false; or
(ii) he knows or ought reasonably to have known that the statement or information is false or misleading in a material particular.
[SIA, s. 99; Aust. Corporations 2001, s. 999]
SFA's Section 200 (Fraudulently inducing persons to deal in securities) reads:
(1) No person shall —
(a) by making or publishing any statement, promise or forecast that he knows or ought reasonably to have known to be misleading, false or deceptive;
(b) by any dishonest concealment of material facts;
(c) by the reckless making or publishing of any statement, promise or forecast that is misleading, false or deceptive; or
(d) by recording or storing in, or by means of, any mechanical, electronic or other device information that he knows to be false or misleading in a material particular,
induce or attempt to induce another person to deal in securities.
(2) In any proceedings against a person for a contravention of subsection (1) constituted by recording or storing information as mentioned in subsection (1) (d), it is a defence if it is established that, at the time when the defendant so recorded or stored the information, he had no reasonable grounds for expecting that the information would be available to any other person.
(3) In any proceedings against a person for a contravention of subsection (1), the opinion of any registered or public accountant as to the financial position of any company at any time or during any period in respect of which he has made an audit or examination of the affairs of the company according to recognised audit practice shall be admissible, for any party to the proceedings, as evidence of the financial position of the company at that time or during that period, notwithstanding that the opinion is based in whole or in part on book-entries, documents or vouchers or on written or verbal statements by other persons.
[SIA, s. 100; Companies, s. 404 (4)]
By SFA's definition:
"securities" means —
(a) debentures or stocks issued or proposed to be issued by a government;
(b) debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate;
(c) any right, option or derivative in respect of any such debentures, stocks or shares;
(d) any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i) the value or price of any such debentures, stocks or shares;
(ii) the value or price of any group of any such debentures, stocks or shares; or
(iii) an index of any such debentures, stocks or shares;
(e) any unit in a collective investment scheme;
(f) any unit in a business trust; or
(g) any derivative of a unit in a business trust,
but does not include —
(i) futures contracts which are traded on a futures market;
(ii) bills of exchange;
(iii) promissory notes; or
(iv) certificates of deposit issued by a bank or finance company whether situated in Singapore or elsewhere;
Petition to Singapore Government
I have received over 900 signatures to this online Petition. It will be sent to Mr. Goh Chok Tong next week.
PETITION TO SINGAPORE GOVERNMENT
1. We write to petition the Singapore Government, particularly the Commercial Affairs Department (Singapore Police Force) and/or the Monetary Authority of Singapore, to conduct a full and independent inquiry in relation to the credit linked securities sold by various financial institutions in Singapore. These structured products include, but are not limited to, the Lehman Minibonds, DBS High Notes, Morgan Stanley Pinnacles Notes and Merrill Lynch Jubilee Notes.
2. Singaporeans, including the persons who have signed this petition, lost their hard-earned savings by investing in these financial products. Such products clearly did not suit the risk profiles of these consumers. The consumers were not made aware of the high risks involved in the financial product when buying the product. They became innocent victims of misrepresentation by the financial institutions that distributed the structured products.
3. We now wish to be assured that those who invested in such financial products have not been victims of negligent and/or dishonest conduct and/or fraud by these financial institutions.
4. The Government has a duty to ensure that investment products are marketed and sold appropriately in our jurisdiction. Such products must be sold in a manner compliant with the laws of Singapore. Financial institutions, including their respective key management, that do not follow the laws or regulations applicable to them must be held accountable for such breaches.
5. Please commence a full and independent inquiry into the sale of structured products by various financial institutions in Singapore. If the inquiry deems necessary, the Attorney-General of Singapore should act against these financial institutions.
6. We also ask the Government to help these investors to claim fair and adequate compensation from these financial institutions for their losses which are caused by the mis-conduct of these financial institutions.
7. We ask the Government to act now and restore the peoples' faith in our financial system.
PETITION TO SINGAPORE GOVERNMENT
1. We write to petition the Singapore Government, particularly the Commercial Affairs Department (Singapore Police Force) and/or the Monetary Authority of Singapore, to conduct a full and independent inquiry in relation to the credit linked securities sold by various financial institutions in Singapore. These structured products include, but are not limited to, the Lehman Minibonds, DBS High Notes, Morgan Stanley Pinnacles Notes and Merrill Lynch Jubilee Notes.
2. Singaporeans, including the persons who have signed this petition, lost their hard-earned savings by investing in these financial products. Such products clearly did not suit the risk profiles of these consumers. The consumers were not made aware of the high risks involved in the financial product when buying the product. They became innocent victims of misrepresentation by the financial institutions that distributed the structured products.
3. We now wish to be assured that those who invested in such financial products have not been victims of negligent and/or dishonest conduct and/or fraud by these financial institutions.
4. The Government has a duty to ensure that investment products are marketed and sold appropriately in our jurisdiction. Such products must be sold in a manner compliant with the laws of Singapore. Financial institutions, including their respective key management, that do not follow the laws or regulations applicable to them must be held accountable for such breaches.
5. Please commence a full and independent inquiry into the sale of structured products by various financial institutions in Singapore. If the inquiry deems necessary, the Attorney-General of Singapore should act against these financial institutions.
6. We also ask the Government to help these investors to claim fair and adequate compensation from these financial institutions for their losses which are caused by the mis-conduct of these financial institutions.
7. We ask the Government to act now and restore the peoples' faith in our financial system.
Not to be retailed in USA
Dear Mr. Tan,
In some prospectuses I came across recently, I have noticed that there are statements on various pages of the same prospectus saying that the product should not be retailed to USA citizens.
Hope that SM Goh will get MAS to study this and learn from USA to protect Singapore citizens.
XL
In some prospectuses I came across recently, I have noticed that there are statements on various pages of the same prospectus saying that the product should not be retailed to USA citizens.
Hope that SM Goh will get MAS to study this and learn from USA to protect Singapore citizens.
XL
Petition to Singapore Government
I have decided to lodge the Petition early next week, one week ahead of schedule. I now have over 900 signatories. The gathering at Speaker's Corner on 11 October will still be held as planned earlier.
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