SCMP:Investor cool-off pondered

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6 Nov 2008
Joyce Man

The Securities and Futures Commission will consider imposing a cooling-off period for investment contracts in light of the minibond debacle.

The move comes after some investors in complicated financial products complained that agents only provided crucial documents – which would have changed their investment decisions – after they had signed investment agreements.

“The SFC will consider whether the relevant sales contracts should contain a ‘cooling-off period’, during which investors may unconditionally terminate the contracts,” Secretary for Financial Services and the Treasury Chan Ka-keung said yesterday.

It would investigate the feasibility, merits and shortcomings of implementing a cooling-off period for other investment products, he said, without elaborating.

He was responding to legislator Raymond Ho Chung-tai, chairman of a Legislative Council subcommittee on Lehman minibonds and structured financial products, who wanted to know how the commission was educating small investors.

Andrew Fung Wai-kwong, a district councillor who has been helping investors complain to banks and demand compensation, said a coolingoff period would help them in future. “There is nowhere to run,” he said of the current arrangement, “and this would provide them with a way out.”

The commission is also considering more provisions for educating investors during the 2008-09 financial year.

From October 2006 to September this year, the commission produced 12 television programme episodes, broadcast 108 radio segments, published 130 newspaper articles, and issued 69 videos for broadcast on 1,000 buses, all containing educational messages for investors. It also organised 127 seminars and several university courses.

It has issued leaflets and brochures on stocks, funds, bonds, structured instruments and other products, with advice on how to choose brokers and investment advisers.
Since 1997, it has also provided investment information on television and radio, and organised quizzes and competitions to inform investors.