To: Chairman of Monetary Authority of Singapore
Dear Sir,
We have invested in the credit linked securities, including Mini bonds, High Notes, Pinnacle Notes and Jubilee Notes, on the misrepresentation by the sales representatives working for the financial institutions.
The misrepresentations include, among others, some or all of the following:
a) That the funds are invested in the bonds of the reference entitles
b) That all of the reference entitles have to fail, before we lose our entire principal
c) That our principal is protected, if we keep the investment to the maturity date
We were not told that our monies were invested in other underlying poorer quality assets and that credit default swaps were transacted that could wipe out our entire capital in the event of a credit event involving only one of these reference entities. The prospectus and sales materials do not explain the actual nature and risks transparently.
If we were correctly informed, we would have avoided the structured product, as we are risk adverse investors. Previously, we have invested our monies in fixed deposits of finance institutions in Singapore.
We were misled by the assurances and explanations given by the sales representatives, which have now turned out to be wrong. These statements were, in most cases, made verbally to us. We believed these statements as they came from the financial institutions that we had trusted for many years.
We petition the Monetary Authority of Singapore (MAS) to review the sales training and marketing processes of the financial institutions, in particular, on the following areas:
a) Did the financial institutions provide adequate training to their sales representatives, on the actual nature and risks of the structured products? In particular, were the representatives trained on the contents of the prospectus? Were they tested on their knowledge of the contents? If not, why?
b) Did the financial institutions target fixed deposit holders to market these products? Was this targeting done in a systematic way? Was it done with the knowledge and approval of senior management? Did the senior management consider these structured products to be a reasonable alternative to fixed deposits: to be sold to a conservative, risk adverse investor?
c) Did the financial institutions have systems to monitor the conduct of sales representative to ensure that the products were sold to the appropriate people, based on their risk profile and preference? Was a higher incentive given to sell this risky product? Was there pressure to move the product?
d) Were the sales materials appropriate in explaining the riskiness of the product?
We believe that many sales representatives were unaware about the actual nature and risk of the products. Consequently, they gave the wrong information and advice to the retail investors. This has caused us to lose large sums of money on our investments.
If the investigation by MAS confirms that the sales representatives were not properly trained and monitored; we appeal to MAS to help us to obtain appropriate compensation for our financial loss.
Our appeal is for MAS to act in accordance with the objectives or desired outcomes of its supervisory activities: transparent and fair-dealing intermediaries and offerors and well-informed and empowered consumers.
Sincerely,
The Undersigned
