<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>January 10, 2009, 2.02 pm (Singapore time)
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>HKMA urges new measures to protect investors
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>
HONG KONG - The Hong Kong Monetary Authority (HKMA) has told banks to implement seven new consumer protection measures related to the sale of investment products, after receiving thousands of complaints following the collapse of Lehman Brothers last year.
In a statement dated Friday, the authority asked banks to formulate plans to separate banking and retail securities business before end-March.
The seven measures include attaching health-warnings to retail structured products, separation of risk assessment and sales process, audio-recording of sales process and a mystery shopper programme to test the sales processes, according to a circular that the city's central bank sent to financial institutions.
'We expect the other recommendations in the letter to be implemented as soon as practicable, to improve the existing regulatory regime and better protect investors,' a HKMA spokesperson said in a separate statement.
The government has vowed to review regulation of its financial markets to better protect investors after more than 40,000 Hong Kong investors ploughed nearly US$2.5 billion into failed structured products and mini-bonds offered by collapsed US bank Lehman Brothers.
HKMA said it had received 19,893 complaints concerning Lehman Brothers-related products as at Jan 8.
Many of those investors claimed they were duped into buying what they thought were low-risk products.
HKMA's chief Joseph Yam said their losses did not result from faults in the regulatory system and the city's regulatory structure is as good as anywhere in the world.
The Lehman products were distributed by more than 20 local banks and financial institutions who are now being investigated by the securities watchdog, the Securities and Futures Commission (SFC).
In reports to the financial secretary on the Lehman mini-bonds issue, partially published on Thursday, the HKMA and the SFC called for tighter monitoring of the sale of financial products and suggested that, longer-term, establishment of a financial services ombudsman should be considered.
They also called for a cooling-off period during which investors could cancel their investments. -- REUTERS
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>HKMA urges new measures to protect investors
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>HONG KONG - The Hong Kong Monetary Authority (HKMA) has told banks to implement seven new consumer protection measures related to the sale of investment products, after receiving thousands of complaints following the collapse of Lehman Brothers last year.
In a statement dated Friday, the authority asked banks to formulate plans to separate banking and retail securities business before end-March.
The seven measures include attaching health-warnings to retail structured products, separation of risk assessment and sales process, audio-recording of sales process and a mystery shopper programme to test the sales processes, according to a circular that the city's central bank sent to financial institutions.
'We expect the other recommendations in the letter to be implemented as soon as practicable, to improve the existing regulatory regime and better protect investors,' a HKMA spokesperson said in a separate statement.
The government has vowed to review regulation of its financial markets to better protect investors after more than 40,000 Hong Kong investors ploughed nearly US$2.5 billion into failed structured products and mini-bonds offered by collapsed US bank Lehman Brothers.
HKMA said it had received 19,893 complaints concerning Lehman Brothers-related products as at Jan 8.
Many of those investors claimed they were duped into buying what they thought were low-risk products.
HKMA's chief Joseph Yam said their losses did not result from faults in the regulatory system and the city's regulatory structure is as good as anywhere in the world.
The Lehman products were distributed by more than 20 local banks and financial institutions who are now being investigated by the securities watchdog, the Securities and Futures Commission (SFC).
In reports to the financial secretary on the Lehman mini-bonds issue, partially published on Thursday, the HKMA and the SFC called for tighter monitoring of the sale of financial products and suggested that, longer-term, establishment of a financial services ombudsman should be considered.
They also called for a cooling-off period during which investors could cancel their investments. -- REUTERS
</TD></TR></TBODY></TABLE>
