MAS Press Statement on Structured Products

In consultation with MAS, financial institutions that have sold the DBS High Notes 5, Lehman Minibonds and Merrill Lynch Jubilee Series 3 are in the process of appointing independent parties to oversee their complaints handling and resolution processes for these products.  The FIs will have to include the following matters in their terms of reference when engaging the independent party.

Matters to be included in the Terms of reference

You have been appointed as an independent external party to oversee the complaints handling and resolution processes by

(the FI) and its conduct of inquiries into the alleged mis-selling of [DBS High Notes 5/ Lehman Minibonds/ Merrill Lynch Jubilee Series 3 LinkEarner Notes (as appropriate to the FI) ].  Your role is to ensure that the FI deal with investors' complaints fairly, effectively and promptly.

Scope

In particular, you should focus on the following matters:

(a) Reviewing the internal complaints handling procedures of the FI to determine that they are independent, fair and transparent.  In this regard:

(i) Every complainant must be afforded a full opportunity to state his complaint.  The FI should assist the complainant to enable him to identify all facts required for a fair assessment of the complaint. The complaint should be properly documented and a copy should be furnished to the complainant. The FI should provide sufficient avenues for and manpower to attend to complaints and provide information about the complaint making and handling process, including a customer service centre, hotlines, email contacts, and FAQs on its website.

(ii) Every complaint must be fairly assessed by reviewers who are independent of the financial advisory arm of the FI.  There must be a follow up procedure with the complainant if there are any issues that need to be clarified.  Reviewers should be clear as to the assessment criteria on the merits of a complaint, and the assessment should be properly documented.  Where there is any evidence of mis-selling, there must be a process to surface this to the attention of senior management and to MAS.

(iii) The FI should communicate the result of the assessment of every complaint to the complainant in a timely manner.  The FI must have a procedure in place, where if the complainant requests, the complaint filed by the complainant can be forwarded to FIDReC for dispute resolution without further need to file a further complaint with FIDReC.

(b) Where there are any shortcomings identified in the complaints handling process and resolution process, these should be brought to the attention of senior management of the FI and rectified.  These include shortcomings in the process itself as well as in the execution of the process.  If the shortcomings persist, MAS is to be notifed immediately.

(c)  Any other matter that will ensure that FI deal with investors' complaints fairly, effectively and promptly.

Timeline and deliverables

(d) You should ensure that the FI completes its review within a reasonable period and submits an objective report to MAS on its findings, including highlighting potential cases of mis-selling and the evidence in support thereof.

(e) You should provide MAS with regular updates on the progress of the complaints review and an overall report at the end of the review on the complaints handling and resolution process and any other matters of public interest arising as a result of your review.