MAS reviews deposit insurance scheme to give customers more protection
By Asha Popatlal, Channel NewsAsia | Posted: 16 July 2009 1449 hrs
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Shane Tregillis</TD></TR><TR><TD> </TD><TD class=update> </TD></TR><TR><TD> </TD><TD><TABLE style="BACKGROUND-COLOR: #cccccc" border=0 cellSpacing=0 cellPadding=0 width=240><TBODY><TR><TD vAlign=top width="100%"><TABLE border=0 cellSpacing=1 cellPadding=0 width="100%"><TBODY><TR style="BACKGROUND-COLOR: #ffffff"><TD><TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR><TD class=topic vAlign=top align=left>Related News </TD></TR><TR><TD bgColor=#cccccc vAlign=top align=left>
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</TD><TD class=bodytext vAlign=top width="60%" align=left>MAS reviews deposit insurance scheme to give customers more protection</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></TD></TR><TR><TD vAlign=top background=images/dotline_240.gif align=left>
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SINGAPORE: The Monetary Authority of Singapore (MAS) is looking at measures to boost investors' confidence in the financial system. It is also tightening its supervision of financial institutions (FIs) that sell investment products.
For the average man-in-the street, one worry has always been the kind of protection he would get if his bank or finance company goes bust. To protect such individual depositors, Singapore started the Deposit Insurance Scheme in April 2006.
A limit of S$20,000 per individual investor per institution was set, allowing 87 per cent of individual investors to be fully insured. The coverage ratio has since dipped to 83 per cent, which is the lower end of MAS' targeted range.
Now, in the wake of the global financial crisis, MAS wants to raise the coverage limit to above S$20,000 to better protect bank customers and to ensure that the scheme is relevant and in line with international practice.
=> Let's see. Given the PAPee's propensity for sick jokes, it'll be increased to $20,001?
At the same time, MAS said this should not lead to a substantial increase in costs to the industry which could be passed on in some form to bank customers.
The regulator will consult the public and industry over the next six to nine months before implementing the revised scheme next year.
FIs will also come under closer scrutiny after the recent fiasco where many retail investors lost money when the complex structured notes they bought became worthless.
While ten financial institutions have been banned from selling such products and some investors have received varying settlements, there are still questions as to the responsibility that senior bank management and even MAS itself, should bear.
Shane Tregillis, deputy managing director, Market Conduct, MAS, said: "MAS' role was to check the disclosure agreements, but not the merits of the investment. There are lessons clearly for FIs on what they need to do better and clearly, we need to reflect on the types of issues going forward in our supervision."
In the pipeline are measures to further safeguard consumer interest and boost industry standards – from stricter training of frontline staff to all-round financial education for consumers.
In terms of staff training, MAS is proposing a new Capital Markets and Financial Advisory Services examination module on product knowledge for bank staff who want to sell complex investment products.
It will also intensify its supervision of financial institutions and probe steps taken by its senior management to ensure fair dealings with customers.
MAS said it would also need to focus on new products when they are launched and plans to develop a financial literacy core programme that will aid the average man-in-the street make informed financial decisions at all stages of his life.
- CNA/yt/so
By Asha Popatlal, Channel NewsAsia | Posted: 16 July 2009 1449 hrs
<TABLE border=0 cellSpacing=0 cellPadding=0 width=260 align=right><TBODY><TR><TD width=20 align=right> </TD><TD width=240 align=right>
Shane Tregillis</TD></TR><TR><TD> </TD><TD class=update> </TD></TR><TR><TD> </TD><TD><TABLE style="BACKGROUND-COLOR: #cccccc" border=0 cellSpacing=0 cellPadding=0 width=240><TBODY><TR><TD vAlign=top width="100%"><TABLE border=0 cellSpacing=1 cellPadding=0 width="100%"><TBODY><TR style="BACKGROUND-COLOR: #ffffff"><TD><TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR><TD class=topic vAlign=top align=left>Related News </TD></TR><TR><TD bgColor=#cccccc vAlign=top align=left>
</TD><TD class=bodytext vAlign=top width="60%" align=left>MAS reviews deposit insurance scheme to give customers more protection</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE></TD></TR><TR><TD vAlign=top background=images/dotline_240.gif align=left>
SINGAPORE: The Monetary Authority of Singapore (MAS) is looking at measures to boost investors' confidence in the financial system. It is also tightening its supervision of financial institutions (FIs) that sell investment products.
For the average man-in-the street, one worry has always been the kind of protection he would get if his bank or finance company goes bust. To protect such individual depositors, Singapore started the Deposit Insurance Scheme in April 2006.
A limit of S$20,000 per individual investor per institution was set, allowing 87 per cent of individual investors to be fully insured. The coverage ratio has since dipped to 83 per cent, which is the lower end of MAS' targeted range.
Now, in the wake of the global financial crisis, MAS wants to raise the coverage limit to above S$20,000 to better protect bank customers and to ensure that the scheme is relevant and in line with international practice.
=> Let's see. Given the PAPee's propensity for sick jokes, it'll be increased to $20,001?
At the same time, MAS said this should not lead to a substantial increase in costs to the industry which could be passed on in some form to bank customers.
The regulator will consult the public and industry over the next six to nine months before implementing the revised scheme next year.
FIs will also come under closer scrutiny after the recent fiasco where many retail investors lost money when the complex structured notes they bought became worthless.
While ten financial institutions have been banned from selling such products and some investors have received varying settlements, there are still questions as to the responsibility that senior bank management and even MAS itself, should bear.
Shane Tregillis, deputy managing director, Market Conduct, MAS, said: "MAS' role was to check the disclosure agreements, but not the merits of the investment. There are lessons clearly for FIs on what they need to do better and clearly, we need to reflect on the types of issues going forward in our supervision."
In the pipeline are measures to further safeguard consumer interest and boost industry standards – from stricter training of frontline staff to all-round financial education for consumers.
In terms of staff training, MAS is proposing a new Capital Markets and Financial Advisory Services examination module on product knowledge for bank staff who want to sell complex investment products.
It will also intensify its supervision of financial institutions and probe steps taken by its senior management to ensure fair dealings with customers.
MAS said it would also need to focus on new products when they are launched and plans to develop a financial literacy core programme that will aid the average man-in-the street make informed financial decisions at all stages of his life.
- CNA/yt/so
