Parliamentary Replies
Published Date: 23 March 2009

Reply to PQ on Updates of Structured Products

Question No. 961
Notice Paper No. 51 of 2009
For Oral Answer

Date: For Parliament Sitting On 23 March 2009

Name and Constituency of Member of Parliament
Siew Kum Hong, Nominated Member of Parliament


To ask the Senior Minister (a) if he will provide an update on the MAS investigations into alleged mis-selling of structured products by financial institutions (FIs); and (b) since January 2009 (i) how many new complaints of mis-selling have been filed against financial institutions and in respect of what products; (ii) how many settlement offers by financial institutions have been accepted and rejected; and (iii) how many complaints have been filed with the Financial Industry Disputes Resolution Centre and how many of these complaints have been resolved.

Mr Lim Hng Kiang, Minister for Trade and Industry and Deputy Chairman:

1. Mr Speaker Sir, Mr Siew Kum Hong has asked for an update on investigations by MAS, the number of new complaints filed with financial institutions since January 2009, an update on the settlement offers made to investors, and the number of claims lodged with the Financial Industry Disputes Resolution Centre (“FIDReC”).

Update on MAS’ Investigations
2. First, on the update on MAS' investigations. MAS has completed its investigations. In accordance with its normal practice, there is a due process to be followed, including giving the financial institutions a reasonable opportunity to respond to the preliminary findings, before MAS makes and announces its final decision. Until MAS’ findings are finalised, it is not appropriate for either MAS or the parties involved to comment further on the matters under investigation as it could be prejudicial to the investigations and the parties involved.

Complaints to Financial Institutions and Settlement Offers
3. Second, on the complaints to the financial institutions and the settlement offers. Regarding the complaints filed with the 10 financial institutions that sold DBS High Notes 5, Lehman Minibond programme notes and Merrill Lynch Jubilee Series 3 LinkEarner notes, since my last update to Parliament in January, these institutions have received another 367 complaints. This number is accurate as of 15 March 2009.

4. As for the settlement offers that have been made by these financial institutions, as at 15 March 2009, 79% of investors who received settlement offers have accepted them, 1.5% have rejected the offer and the rest have yet to decide.

5. For Pinnacle Notes Series 9 and 10, I have been told that the five financial institutions that sold these products have, since my last update to Parliament in January, received another 31 complaints. Again, this number is accurate as of 15 March 2009.

Update on Complaints filed with FIDReC
6. Finally, on the update on complaints filed with FIDReC, MAS has been informed by FIDReC that as of 15 March 2009, there have been a total of 561 formal claims lodged with FIDReC. 336 of these claims are for Lehman Minibond programme notes, 161 for DBS High Notes 5, 44 for Merrill Lynch Jubilee Series 3 Linkearner Notes, and 20 for Morgan Stanley Pinnacle Series 9 and 10 Notes. 485 claims are pending mediation and 42 claims have been referred to adjudication. 34 claims so far have been resolved at the mediation stage. In 32 of these 34 cases, the parties entered into some form of settlement, and in the remaining two cases, they have decided not to pursue the matter further. As I had previously indicated, the time taken to resolve a particular complaint would really depend on factors such as the complexity of the dispute and when the parties involved are available for the meetings or the hearings.

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