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The Monetary Authority of
Singapore (MAS) today (7 Oct 2004) issued a package of measures to raise
market conduct standards in the sales and advisory process for structured
deposits.
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The package includes a set of
Guidelines on Structured Deposits under the Financial Adviser's Act (FAA).
These Guidelines require banks to:
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(a) ensure that all marketing
materials on such products disclose key information in a clear and adequate
manner, and do not include statements that are false or misleading
(b) ensure that bank representatives selling these products are qualified
and have a reasonable basis for making recommendations
(c) ensure that steps are taken to segregate the sales process for such
investment products from other deposits so that consumers will not be misled
into assuming that structured deposits have similar risk-return profiles as
traditional fixed deposits.
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In addition, MAS has issued a set
of Guidelines on the definition of a "Deposit" as stated in the
Banking Act (BA). This clarifies the characteristics of a deposit and sets out
the requirements that will apply for products that do not satisfy the
definition of a deposit.
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Banks are given till 1 June 2005
to comply with these Guidelines.
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MAS has also published a consumer
guide, "Making Sense of Structured Deposits", to raise
awareness of the features of structured deposits, the risks involved and what
consumers should look out for when investing in such products.
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The guide is available on the MAS
"For the Consumer" portal under MoneySENSE - Consumer
Guides and other Publications.
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BA
Guidelines on definition of a 'deposit'
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FAA
Guidelines on structured deposits
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Source: Monetary
Authority of Singapore Press Release 7 Oct 2004
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MAS Guidelines on Structured Deposits Issued
