As a follow-up to the collapse of the United States investment bank Lehman Brothers' MinibondSeries, the MAS has finally come out with "NEW stuff" to protect consumers' interest.
Consumers can expect more information disclosure and better protection of their interests when new proposals on investment products take effect soon.
8 things to know about the review:
1. The 'Product Highlight Sheet' is given to the consumers before they make investment decisions. It will set out key product information in a simple and concise manner. And guess what, it will not be in "fine print" anymore...
2. Complex Products. Health Warning to be slapped on all the product's marketing and advertising materials. They can only be sold after some form of advice is being given.
3. Risk rating to be given so that investors can assess their suitability
4. Fair and balanced advertising materials. The aim is to ensure that these materials present a realistic and balanced perception of the product and its features and risks.
5. Bank Tellers cannot act as Product Introducers. I think this is really a good move. How many aunties and uncles and the ignorant were "directed" to the wealth managers... believing that these mini-bonds give you much high returns than FD?
6. Sellers to exercise greater diligence. Advisory firms must document in greater detail the basis of their recommendations.
7. Restrictions on product sale without advice. Advisory firms can waive the need to give adviceonly if the customer contacts them on his own initiative to buy a product.
8. Enhancing MAS' powers. More power! More control!
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