A few months ago, the media reports gave the impression that a high proportion of credit linked note investors in Singapore received full or partial compensation. The investors in Hong Kong used this reports to pressure their Government to set similar compensation for them. The general public believed that the regulators had intervened to get satisfactory compensation for the Singapore investors.
As the months went by, many Singapore investors, especially those who invested a large sum, were disappointed that their requests for compensation were rejected by the financial institutions or the compensation offers were unacceptably low.
Many investors rejected the offers and brought their cases to be heard in FIDREC. A few cases had their cases adjudicated with disappointing results to the investors.
Some investors did received satisfactory compensation, which they accepted gratefully. But, the proportion appears to be small.
The Legislative Assemby in Hong Kong had summoned the regulatory authority to testify in their chambers. These hearings were well reported in the media. The legislators were unhappy with the measures taken by the regulators before and after the crisis had erupted. In response, the regulators were compelled to take stronger action now to remedy the situation.
Recent media reports suggested that some financial institutions in Hong Kong are now willing to compensate the investors at more than 50%, which is more generous that the settlements offered in Singapore.
In my view, a compensation of 50% of the amount of loss would be fair, as the loss should be shared equally between the distributor (due to their negligence in mis-advising the investors about the nature of the product) and the investors (who wanted to earn a higher yield).
I hope that all investors in Singapore will receive this level of compensation, regardless of their age or educational level.
Tan Kin Lian
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