Tuesday, July 21, 2009

Petition to Prime Minister (4)

317 people have signed the Petition.

I have sent an email to the journalists of the major papers to inform them about the progress of this Petiion. I hope that some of the journalists are prepared to write about this Petition. (When I launched the Petition a few days ago, I also informed the journalists, but none responded to my e-mail).
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12 comments:

Anonymous said...

MAS should consider what FSA is proposing to do to deter FIs and Insurance companies, the salespeople and the insurance agents and RMs against mis-selling and misconduct.

Press releases

FSA proposes bigger fines to achieve credible deterrence

These proposals are an important step in pushing forward our ethos of credible deterrence.


FSA/PN/091/2009
6 July 2009

The Financial Services Authority (FSA) has today published plans to create a consistent and more transparent framework for calculating financial penalties which could mean some fines treble in size.

The new plans reflect the FSA’s determination to change behaviour and address concerns that firms are repeatedly failing to improve standards (e.g. in relation to mis-selling to consumers and market misconduct). They will also ensure that fines better reflect the scale of the wrongdoing and that any profits made from the breaches are clawed back.

Under the new proposals, fines will be linked more closely to income and be based on:

* Up to 20% of the company’s income from the product or business area linked to the breach over the relevant period;
* Up to 40% of an individual’s salary and benefits (including bonuses) from their job relating to the breach in non-market abuse cases;
* A minimum starting point of £100,000 for individuals in market abuse cases.

The total fine imposed will also take into account other factors, such as the desired deterrent effect and any settlement discount.

Margaret Cole, director of enforcement at the FSA, said:

"These proposals are an important step in pushing forward our ethos of credible deterrence. By hitting companies and individuals in the pocket where it hurts, the fines will be a stark warning to others on what they can expect to pay for flouting our rules. Moving to this new framework will enable our enforcement policy to continue making a real difference to consumers and to changing behaviour in the financial services sector."

The full framework will consist of the following steps:

1. Removing any profits made;
2. Setting a figure to reflect the nature, impact and seriousness of the breach;
3. Considering any aggravating and mitigating factors;
4. Achieving the appropriate deterrent effect;
5. Applying any settlement discount.

This approach is the latest stage of the FSA’s credible deterrence strategy and will apply to all enforcement actions including against firms, individuals and listed companies.

The consultation will close on 21 October 2009 and any new policy is likely to apply to breaches committed after February 2010.

July 21, 2009 11:38 AM
Anonymous said...

The below is about mis-selling based on insufficient client info.This is akin to failing to conduct fact finding and need anlaysis and the result is recommendation not of reasonable basis. This breaches section 27 of the FAA


FSA fines PMSG Insurance Services Ltd £35,000 and withdraws approval for its compliance officer for mortgage advice breaches

All firms must gather sufficient information from their customers about their needs


FSA/PN/076/2008
23 July 2008

The Financial Services Authority (FSA) has fined PMSG Insurance Services Ltd £35,000 for failing to ensure advice given to customers was suitable and for not organising its business responsibly and to properly manage risk.

The FSA has also withdrawn its approval for the firm's compliance officer, Irene Hall, as it found she lacked the competence and capability to ensure the firm complied with FSA regulations aimed at ensuring customers are treated fairly.

Jonathan Phelan, FSA head of retail enforcement said:

"It is unacceptable that PMSG exposed at least 620 customers to the risk of being recommended mortgages that they could not afford or did not need. All firms must gather sufficient information from their customers about their needs and must organise and control their business to ensure the advice they give is suitable and customers are treated fairly."

In recommending mortgages, PMSG failed to take fully into account its customers personal and financial circumstances, for example:

* customers were re-mortgaged in their existing properties without the firm being able to show they could afford the recommended deal;
* customers were advised to re-mortgage their properties while they were still subject to an early redemption charge which may have reduced any benefit of re-mortgaging;
* the firm did not seek to verify information provided by customers which was inconsistent with information provided by them at an earlier point in the sales process; and
* the firm failed to retain sufficient records of information about its customers to prove the suitability of the advice it gave them.

The firm has agreed to review its customers' files to establish whether there has been any detriment and will undertake a past business review to identify any unsuitable recommendations that may have been made to its customers. The report will also identify whether any redress needs to be paid by PMSG to any of its customers.

July 21, 2009 12:21 PM
Anonymous said...

Do you think our local press dare to promote your call?

July 21, 2009 12:26 PM
Anonymous said...

The days of consumers getting "free" financial advice look numbered under
new regulatory guidelines which are aimed at improving the way financial
products are sold.

The Financial Services Authority (FSA) has outlined new guidelines that
effectively outlaw commission payments, which have been seen by many
consumers as a way of getting "free" advice.

The FSA has made it clear that it is concerned that these payments are
used to disguise the cost of financial products, and may create bias in an
adviser's recommendations.

A spokesman for the FSA said it hoped its proposals would restore
consumers' trust in the financial services industry at a time when many
"need real help and advice with their retirement and savings planning".
The changes are due to come into force in 2012.

The regulator's review contains three key proposals. Probably the biggest
change is to the way advisers are remunerated.

For the first time all advisers, whether they are independent financial
advisers or sales agents, will have to declare and agree with the customer
in advance exactly what the advice costs. Consumers will then have the
option of paying for it in advance or opting for the cost to be taken from
their savings over a period of time.

A spokesman for the FSA said: "Commission as we know it will disappear for
ever. We want to sever the providers' involvement with the advisers'
fees." The FSA has not ruled out banning commission completely at a later
date.

Another major change is that all advisers will now have to take advanced
qualifications, equivalent to the first year of a degree course, if they
are offering full advice to consumers. At present 80pc of advisers do not
have these qualifications.

Andrew Fisher, the chief executive of Towry Law, a firm of financial
advisers, said: "This is brilliant news for consumers. The smoke and
mirrors, lies and obfuscation that have been used to disguise consumer
fees will be stopped.

"Individuals thought that commission meant 'free' advice but it was always
paid for, either by raising product charges or by reducing the value of a
consumer's investment. For the first time, any commission charge will now
explicitly be linked to consumers' savings and will have to be agreed
upfront."

The FSA said its framework would provide a mix of services, so "less
sophisticated" investors who could not afford to pay for full advice were
not excluded. Many companies are expected to offer "guided sales", where
consumers are given basic financial information.

If this led to a recommendation to buy a certain product, however, the
sales person would still be required to have the appropriate professional
qualifications and be upfront about any product charges. The FSA said: "It
must always be made clear at the outset whether consumers are paying for
independent advice or a sales service."

Trevor Matthews, the president of the Chartered Insurance Institute said
these proposals should "kick-start" the process "of moving to higher
levels of competence and and professionalism". He added: "The biggest
challenge for the long term future of this industry is to restore trust in
financial services, which has been dented for too long." He said today's
proposals go some way to addressing this issue.(well said and long
overdue)

David Elms, the chief executive of IFA Promotion, said he welcomed the
proposals but was awaiting details on how they would be implemented.

He added: "We want to see the same standards applied to all advisers,
whether they are recommending products from across the spectrum of
providers or selling just one company's products.

"This should enable consumers to understand the choices available to them."

July 21, 2009 10:18 PM
Anonymous said...

Many investors who bought from brokerages will not be able to sign as they cannot claim to have been advised by relationship managers.

July 21, 2009 11:30 PM
Anonymous said...

"We want to see the same standards applied to all advisers,
whether they are recommending products from across the spectrum of
providers or selling just one company's products."

Is there same standard in Singapore?
Absolutely NO!!!! The playing field is skewed towards product pushing, commission driven, self interest driven and 90% of the insurance agents are NOT qualified to provide financial planning..

July 22, 2009 12:24 AM
Anonymous said...

Will Singapore become a country full of cheating?

THe 2 biggest charity orgnisations are cheating people's money for their leader's luxury living.

The food courst sold food poinsion enough to get people died.

THe school cheating away student's money.

The banks cheating customer's money without real penatly.

In Singapore, do not make small mistake like drinking in MRT, but you can make big mistake then run away.

Is this Singpaore?

SIngapore goverment is correct forever. Even they know the school is cheating, they do not have any responsibilty to inform the students. The supposed they know by themselves. How stupid the students are by trusting Singapore is a honest country.

Singpore MAS is nothing wrong. THe mistake is Singpaore people. THey should not depend on their goverment too much!

How important the DEMOCRACY is I finally realized!

July 22, 2009 8:41 AM
GOHCT said...

http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=85189&sid=24652148&con_type=1

Investors soon to get minibond payback terms in Hong Kong

Investors in Lehman minibonds will soon know how much they can get back, as banks will reveal the final compensation proposal within a few days, sources said, after a fight which has dragged on since last September.

The Securities and Futures Commission has briefed the government on proposals from banks to settle with customers and is expected to report the final version shortly, the sources told The Standard.

As of yesterday, banks would stick to the Bank of China (Hong Kong) (2388) proposal that investors aged under 65 receive 60 percent, and aged above 65 receive 70 percent, of the original principal invested.

Investors would then receive an extra 10 percent of the principal invested when collaterals sold exceed that amount, making it a minimum 70 percent in total.

Further, distributor banks would give back investors any remaining value above the 70 percent level.

Assuming an investment of HK$100 for an investor aged under 65, the bank would first pay HK$60. It would secondly repay an extra HK$10 if the bank sells the collateral at HK$80 - that is, more than 10 percent of the principal. Thirdly, in that instance, the bank would pay the remaining difference to the client, bringing the total to HK$80.

"Banks will not earn any money from settlements after selling collaterals," the sources said.

If the collateral is only sold at HK$40 - that is, less than 60 percent of the principal - the bank will only settle with the client at HK$70 in total.

Sources said the banks will have final talks with the SFC before it makes its presentation to the government.

Meanwhile, debate continues over the definition of "professional investors" and their eligibility to get compensation. The authority has not yet made a final decision on the definition of a "professional."

Separately, Brian Ho Yin-tung, executive director of the SFC's corporate finance division, said at a Legislative Council hearing yesterday the approval of advertisements for minibonds was legally appropriate, but he admitted there is room for improvement.

Ho said the SFC did not communicate with the Hong Kong Monetary Authority over clients' understanding of the products, and he stressed the SFC has no right to regulate banks in selling them.

July 22, 2009 10:57 AM
Anonymous said...

Latest update from Hong Kong. If the banks decide on this compensation in Hong Kong, the question is how can a bank like say ABN AMRO compensate customers from Hong Kong so much and ignore Singaporean customers. Should our Government/politicians and MAS also fight for the same rights for Singaporeans? Or do they consider Singaporeans second class customers to Hong Kongers?

Investors soon to get minibond payback terms

Investors in Lehman minibonds will soon know how much they can get back, as banks will reveal the final compensation proposal within a few days, sources said, after a fight which has dragged on since last September.

Alfred Liu and Mandy Lo
The Standard
Wednesday, July 22, 2009

Investors in Lehman minibonds will soon know how much they can get back, as banks will reveal the final compensation proposal within a few days, sources said, after a fight which has dragged on since last September.
The Securities and Futures Commission has briefed the government on proposals from banks to settle with customers and is expected to report the final version shortly, the sources told The Standard.

As of yesterday, banks would stick to the Bank of China (Hong Kong) (2388) proposal that investors aged under 65 receive 60 percent, and aged above 65 receive 70 percent, of the original principal invested.

Investors would then receive an extra 10 percent of the principal invested when collaterals sold exceed that amount, making it a minimum 70 percent in total.

Further, distributor banks would give back investors any remaining value above the 70 percent level.

Assuming an investment of HK$100 for an investor aged under 65, the bank would first pay HK$60. It would secondly repay an extra HK$10 if the bank sells the collateral at HK$80 - that is, more than 10 percent of the principal. Thirdly, in that instance, the bank would pay the remaining difference to the client, bringing the total to HK$80.

"Banks will not earn any money from settlements after selling collaterals," the sources said.

If the collateral is only sold at HK$40 - that is, less than 60 percent of the principal - the bank will only settle with the client at HK$70 in total.

Sources said the banks will have final talks with the SFC before it makes its presentation to the government.

Meanwhile, debate continues over the definition of "professional investors" and their eligibility to get compensation. The authority has not yet made a final decision on the definition of a "professional."

Separately, Brian Ho Yin-tung, executive director of the SFC's corporate finance division, said at a Legislative Council hearing yesterday the approval of advertisements for minibonds was legally appropriate, but he admitted there is room for improvement.

Ho said the SFC did not communicate with the Hong Kong Monetary Authority over clients' understanding of the products, and he stressed the SFC has no right to regulate banks in selling them.

July 22, 2009 11:32 AM
Solomon said...

Looks like we are going to drool on what the Hong Kong investors going to get. Exactly the same predicament but we get nothing. SIGH!

July 22, 2009 4:00 PM
Anonymous said...

Imagine those below:

1) those who are not compensated.

2) those who were compensated 10 to 30% by going through MAS compliant route.

3) those who are suing sgp FIs.

As Singaporean, we are again told by MAS recently they what they are doing is fair and not under political pressure. Like I said, it does not take a person drawing million dollar salary a year to achieve a fair result in HK...

July 22, 2009 7:36 PM
Anonymous said...

my respect for MAS and ministers has certainly gone down the drain after reading the HK settlement

July 22, 2009 10:34 PM

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