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SINGAPORE - Over 80% of investors in Lehman Brothers mini-bonds and Merrill Lynch Jubilee Series 3 linked-earner notes invested $50,000 with 28% having bought $10,000 or less.
MAS deputy chairman Lim Hng Kiang said this in Parliament in response to questions by MPs on the number of Singaporeans who lost their high-risk investments following the closure of Lehman Brothers in the US, and how the Monetary Authority of Singapore (MAS) safeguards the interest of the man-in-the street when they invest in complex and high-risk financial products.
Mr Lim also told the House that over 1,400 investors bought into the DBS High Notes 5, taking up $103m worth of notes with more than half investing $50,000 or less.
It is clear from the MAS study that a good number of Singaporeans have been affected and the amounts involved are not insignificant, said Mr Lim.
He said it is fully understandable that investors are anxious, but the process must be allowed to take its course, as rushing into a "fire-sale" would not be in the interest of investors.
He added that the trustees will give an update on the options that are available to note holders by the end of the week.
As to safeguards in place, Mr Lim said that practically, there is a limit on the extent to which a regulator can determine the suitability of each class of products to cater to the different types of investors in Singapore.
The MAS approach, he said, allows for a wider range of Singapore investment options to cater for diverse needs while keeping the regulatory framework, which Mr Lim described as "fundamentally sound", and in line with others.
The current regime, he said, aims to strike a balance in regulations and not have a one-size-fits-all rule.
- CNA/sf
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