I post below, the wordings of section 27 of the Financial Advisers Act. I believe that MAS should consider if the licensee (i.e. distributor) has breached this section and ask them to compensate the investor for the loss or damage as required under sub-section (3). But I am not sure if I have read this section correctly, in respect of the mis-representations to the investor of the credit linked notes. What are your views?
Recommendations by licensees
27. —(1) No licensee shall make a recommendation with respect to any investment product to a person who may reasonably be expected to rely on the recommendation if the licensee does not have a reasonable basis for making the recommendation to the person.
(2) For the purposes of subsection (1), a licensee does not have a reasonable basis for making a recommendation to a person unless —
(a) he has, for the purposes of ascertaining that the recommendation is appropriate, having regard to the information possessed by him concerning the investment objectives, financial situation and particular needs of the person, given such consideration to, and conducted such investigation of, the subject-matter of the recommendation as is reasonable in all the circumstances; and
(b) the recommendation is based on the consideration and investigation referred to in paragraph (a).
(3) Where —
(a) a licensee, in making a recommendation to a person, contravenes subsection (1);
(b) the person, in reliance on the recommendation, does a particular act, or refrains from doing a particular act;
(c) it is reasonable, having regard to the recommendation and all other relevant circumstances, for the person to do that act, or to refrain from doing that act, as the case may be, in reliance on the recommendation; and
(d) the person suffers loss or damage as a result of doing that act, or refraining from doing that act, as the case may be,
then, without prejudice to any other remedy available to that person, the licensee is liable to pay damages to that person in respect of that loss or damage.
(4) In this section, a reference to the making of a recommendation is a reference to the making of a recommendation expressly or by implication.
(5) This section shall not apply to any licensee or class of licensees in such circumstances or under such conditions as may be prescribed.
- ► 2013 (310)
- ► 2012 (1270)
- ► 2011 (1873)
- ► 2010 (2369)
07/05 - 07/12
- Idling ships clog up Singapore shores
- Rebuttals to editorial in Straits Times
- Issues not addressed by MAS investigation findings...
- Law Suit on DBS High Notes
- Coverage of Lehman cases in Hong Kong
- MySudoku Contest in MyPaper
- A fair solution to the toxic product crisis
- Part Time Work Portal
- Name the Shape Contest
- TKL Intelligence Quiz Contest
- The Standard:Ip supports banks' offer in minibond ...
- Relevance of Animal Farm
- Tyranny and liberty
- Cheyenne does Shape Quiz (2)
- SCMP:SFC does not need to complete all minibond in...
- SCMP:Chief keeps quiet over calls for his resignat...
- A Doctor by Choice, a Businessman by Necessity
- Ban on selling structured notes
- Let your views be heard
- Gathering at Speaker's Corner, 22 Aug at 5 pm
- Section 27 of Financial Adviser's Act
- A fair compensation
- Follow up action on MAS investigation report
- The Standard:Illegal Lehman protest targets Tsang ...
- Singapore bars 10 firms from selling structured no...
- MAS Investigation Findings
- 100 fun and information personality quizzes
- Simplify Internet Banking
- Prevent Mis-selling of Financial Products
- Funds Transfer
- Diverse Views
- A poor return on savings in life insurance
- A note of encouragement
- No-fault motor insurance
- Are we over-reacting to Influence A (H1N1)
- The hidden ugly side of Singapore
- Consumer Finance Protection Agency
- SCMP:Lehman investments recouped
- FISCA Research: Interest Rates on Savings Accounts...
- Cheyenne does the Shape Quiz (T Puzzle)
- Allow lawyers to act on contingency fee
- Automated car
- Gathering in Speaker's Corner in August (4)
- ▼ 07/05 - 07/12 (43)
- ► 2008 (2105)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)