SOON after the regulator released its report yesterday, the Association of Banks in Singapore (ABS) and Securities Association of Singapore (SAS) both announced measures to tighten processes.
To educate sales and frontline staff on complex products, the SAS has committed to coming up with training programmes "on a continuing and regularly updated basis". Members will also help promote consumer education schemes "particularly with respect to unlisted complex investment products".
As for banks, while some have put in place such measures on their own, the ABS yesterday said its members have collectively agreed to take steps to further protect those who buy investment products.
This includes tightening the sales process for specific groups of customers, such as the elderly or those with little education. Products sold to these customers must be done so in a supervisor's presence, to ensure they have understood the features and risks.
Due diligence for new products will be enhanced, and a cooling-off period for structured products instituted. Relationship managers will undergo a more specialised training programme, and required to pass a new exam module on complex investment products before they can sell these.
As for settlements for minibond investors, as of May 31, 70 per cent of stockbroking firms' offers have been accepted, 11 per cent have been rejected and the rest have yet to decide. ABN Amro, DBS and Maybank and Hong Leong Finance have offered settlements totalling $105 million to 67 per cent of investors.
The ban on the sale of structured notes does not appear too painful for institutions' bottomlines. A DBS spokesperson said: "We have a full range of options to cater to the investment needs of our customers. While the financial impact of the ban on the sale of structured notes will not be significant, we take seriously our responsibility to serve our customers well."
Hong Leong Finance too said the sale of structured notes constituted a small portion of its profits. ESTHER FUNG
URL http://www.todayonline.com/Business/EDC090708-0000107/Banks,-securities-firms-take-steps
Copyright 2009 MediaCorp Pte Ltd | All Rights Reserved