I suggest that a consumer finance protection agency should be introduced in Singapore, similar to the approach being considered now in America under the Obama Administration.
This agency should have the duty to examine financial products and ensure that they are suitable for sale to the general public. This is similar to the role of the drug authority in approving drugs for sale to the public.
It is not possible for ordinary consumers to assess the safety and fairness of the financial products on their own, based on the information given to them and their lack of financial expertise. This role has to be done by an agency that has access to financial experts. In making the assessment, the financial experts can ask relevant information from the product issuer, including information that is not disclosed in the published materials given to the consumers.
It may be difficult for the Government to take the big step of introducing an agency that has the power to approve or reject any specific financial product. I suggest that this agency can provide a white-list of the suitable products that meet its criteria of disclosure, fairness and general suitability.
This approach allows the ordinary people to check that a particular financial product has been on the white-list. Risky products can be on the white-list, so long as it is adequately disclosed and fairly priced.
The agency can declare products as “not meeting its criteria” without having the power to reject these products.
Tan Kin Lian
Sunday, July 5, 2009
SCMP:Lehman investments recouped
3 July 2009
A total of 329 investors who bought soured Lehman Brothers-linked minibonds from Sun Hung Kai Investment Services and KGI Asia have received their principal amounts back. Under a deal struck with the Securities and Futures Commission, the two firms voluntarily agreed to buy back the minibonds for the principal amount.
FISCA Research: Interest Rates on Savings Accounts and Fixed Deposits
Here are the interest rates on savings accounts and fixed deposits. Courtesy of FISCA Research.
Cheyenne does the Shape Quiz (T Puzzle)
My niece Cheyenne, 6 years old, tried the Shape Quiz (T Puzzle). She has an artistic inclincation and is able to figure out how to form the shapes by looking at the picture. She did the first 3 shapes out of 100 shapes. She will try the other shapes, one at a time. Watch her on Youtube.
More about the Shape Quiz here.
More about the Shape Quiz here.
Saturday, July 4, 2009
Allow lawyers to act on contingency fee
Many investors of the credit linked notes (i.e. Minibonds, High Notes, Pinnacle Notes, Jubilee Notes) had, as a last resort, sought to take a class action against the issuers and/or distributors of these financial products. However, they are daunted by the huge legal cost of a class action.
Many lawyers are not willing to take up the class action as they have existing relationships with the financial institutions and they do not wish to jeopardise their future dealings.
A few lawyers who are willing to act for the investors required a large sum of money to be collected to pay for their case preparation and for their fees and expenses to represent the investors in court. Most of these lawyers are not even prepared to write down their legal arguments and give any assessment of the chance of winning the case, prior to their formal appointment.
Many investors were reluctant to join the class action as they were not sufficiently assured about the credibility of the lawyers or the strength of their case. Some said, “We have been cheated by the banks. We do not now wish to be cheated by the lawyers. We do not want to pay large legal fees, when the chance of winning is unclear or quite remote.”
It is useful for a contingency fee system to be introduced in Singapore for such cases. The lawyers are in the best position to assess the strength of the case, and to take the commercial risk of the litigation. They cannot expect the ordinary folks to make this assessment, especially as the decision has to be taken by many investors with different financial circumstances and understanding of the law.
There are some possible abuses of a contingency fee system, but these abuses can be mitigated. This system provides the positive benefit of allowing ordinary people to seek redress against abuses by large companies.
Tan Kin Lian
Many lawyers are not willing to take up the class action as they have existing relationships with the financial institutions and they do not wish to jeopardise their future dealings.
A few lawyers who are willing to act for the investors required a large sum of money to be collected to pay for their case preparation and for their fees and expenses to represent the investors in court. Most of these lawyers are not even prepared to write down their legal arguments and give any assessment of the chance of winning the case, prior to their formal appointment.
Many investors were reluctant to join the class action as they were not sufficiently assured about the credibility of the lawyers or the strength of their case. Some said, “We have been cheated by the banks. We do not now wish to be cheated by the lawyers. We do not want to pay large legal fees, when the chance of winning is unclear or quite remote.”
It is useful for a contingency fee system to be introduced in Singapore for such cases. The lawyers are in the best position to assess the strength of the case, and to take the commercial risk of the litigation. They cannot expect the ordinary folks to make this assessment, especially as the decision has to be taken by many investors with different financial circumstances and understanding of the law.
There are some possible abuses of a contingency fee system, but these abuses can be mitigated. This system provides the positive benefit of allowing ordinary people to seek redress against abuses by large companies.
Tan Kin Lian
Gathering in Speaker's Corner in August (4)
29 people have replied to the survey mentioned in this blog. Each person indicated that they will ask a small number of people to attend. Only 1 person is willing to speak. Four are willing to share their story (with particulars removed to protect their confidentiality) for another speaker to use.
I need more speakers. If you wish to share your story, I can get someone to speak on your behalf. If you like the gathering to be organised, please give your reply here.
I need more speakers. If you wish to share your story, I can get someone to speak on your behalf. If you like the gathering to be organised, please give your reply here.
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