MAS Press Statement on Structured Products:
Singapore, 24 September 2008...In consultation with MAS, financial institutions (FIs) that have sold the DBS High Notes 5, Lehman Minibonds and Merrill Lynch Jubilee Series 3 LinkEarner Notes have decided to appoint independent parties to oversee their complaints handling processes and investigations into any mis-selling of these products. The independent party is intended to assure investors that their complaints will be heard, documented and reviewed fairly and swiftly.
MAS has also asked DBS Bank to appoint an independent party to review the computation of the payout to investors of the DBS High Notes 5. We have asked HSBC Trustee to expedite the resolution of the issues relating to the Lehman Minibonds.
In addition, MAS will work with Financial Industry Disputes Resolution Centre (FIDReC), the independent parties and the FIs so that documentation from the FIs’ review process can be used, should investors choose to seek mediation and adjudication with FIDReC. This is intended to fast track the process for affected investors of the DBS High Notes 5, Lehman Minibonds and Merrill Lynch Jubilee Series 3 LinkEarner Notes to seek mediation and adjudication of their cases.
Shane Tregillis, Deputy Managing Director, Market Conduct, MAS said, “We welcome the move to provide investors with a consistent and independent process for handling their complaints. MAS will ensure that FIs must have a rigorous process in place for handling customers’ complaints and that legitimate grievances are dealt with expeditiously. While MAS cannot order FIs to pay compensation, we are committed to ensuring a fair resolution process for all affected investors”.
MAS will use the outcome of this process to consider what FIs need to do to strengthen internal processes and controls, and if a review of our existing regulations is required. If there is evidence of potential breaches of our laws or regulations arising from this review, the authorities will investigate and take appropriate action.