Dear Mr Tan
I was wondering why MAS allowed banks in Singapore to sell Structure products to customers if this product does not creat profit for customers but only to banks benefit. Especially if customers already using their CPF Funds to buy it.
MAS adopt a "buyer beware" approach. They ask the consumer to know more about the product before buying it. They require the product provider to make the necessary disclosure about the product.
They prefer to take a "hands off" approach and do not wish to decide whether the product is or is not suitable for consumers.
I disagree with the approach taken by MAS. In my view, they have the duty to make sure that the product is reasonably fairly designed and represents fair value to the consumer. It is difficult for the consumer, who is not knowledgeable about complicated products, to know whether the product represents a fair deal.
I also expect the Consumer Association of Singapore (CASE) to be more active in protecting the interest of the consumers. However, they are not adequately funded and do not have enough resources and clout.
The Central Providet Fund (CPF) has recently decided that they should be more active in setting a limit on the expense charges of investment products sold under the CPF Investment Scheme. Previously, they did not want to prescribe the limits, as they wish to leave it to "market forces".
I hope that the MAS will take a more active approach in the future. Let us give them so more time to learn about the experience.
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