MAS PROHIBITS SYLVIA CHEN PEIRONG FROM PROVIDING ANY FINANCIAL ADVISORY SERVICE FOR SIX MONTHS

1 MAS has prohibited Sylvia Chen Peirong, formerly a financial adviser’s representative of DBS Bank Ltd (“DBS”), from providing any financial advisory service and from providing any financial advisory service by taking part, directly or indirectly, in the management of any financial adviser in Singapore for six months with effect from 19 July 2010.

2 DBS is licensed as a bank under the Banking Act (Cap. 32). It is exempted from holding a financial adviser’s licence in Singapore in respect of any financial advisory service pursuant to section 23(1)(a) of the Financial Advisers Act (Cap 110) (“FAA”).

3 Ms Chen recommended to clients structured notes linked to Lehman Brothers that were issued by DBS (“HN5”) on the basis that the clients had understood the features of the product. However neither the clients’ education, employment status and investment background supported this conclusion.  The clients are a housewife, aged 78, with no formal education, and her son, a driver, aged 53, who has only received primary school-level Chinese language-medium education. Both do not speak or read English and had not previously invested with DBS in products of similar risk profile or features as HN5.

4 MAS views Ms Chen’s performance as unsatisfactory.  Pursuant to section 59(1)(b) read with sections 19(2)(b)(i) and 11(1)(l)(ii) of the FAA, MAS has issued a prohibition order against Ms Chen. 

Licensees and representatives must pay substantive and proper consideration to the complexity of investment products and their clients’ background and needs when providing financial advisory service. Without clear evidence that clients understand an investment product, licensees and representatives should not recommend the product, particularly if it is of relatively higher complexity. Licensees and representatives should also not recommend investment products when it is apparent from a client’s circumstances that the client would not understand such products.