MAS spells out regulatory criteria

MR TAN Sin Liang asks why gold trading companies such as Genneva were allowed to continue operating ("Not as good as gold at all..."; Sunday).

Gold trading is not a regulated activity under the Securities and Futures Act administered by the Monetary Authority of Singapore (MAS).

Like most other regulators, we do not regulate schemes that involve investors acquiring direct ownership of physical assets, such as property, gold, art or wine.

That said, we will continue to monitor market practices and investment trends, and refine the regulatory framework as necessary.

Deputy Prime Minister and MAS chairman Tharman Shanmugaratnam noted in a written response to a question in Parliament on Tuesday that regulations cannot cover every type of investment; MAS has to judge where to draw the line on what we regulate, taking into account the scale of the investment activity, its role in the financial markets and whether failure by a firm will pose broader risks to the system.

However, regardless of whether these activities are regulated, an operator cannot operate fraudulent or deceptive schemes or breach any law.

Some of the operators offering gold buy-back schemes are currently under investigation by the Commercial Affairs Department.

If there is evidence of fraud or other breaches of the law, the department will take firm and appropriate action.

In the current low interest rate environment, consumers may be easily tempted to put their money into schemes that claim to provide high returns with seemingly low risk.

Consumers should exercise great care and vigilance before committing themselves to such schemes.

We encourage consumers seeking financial services to deal only with firms that we regulate.

Consumers can refer to the MAS website to check whether the entity that they are dealing with is regulated by the MAS, or is included on its Investor Alert list.

The list names unlicensed entities that are wrongly perceived to be licensed by us and have come to our attention.
Angelina Fernandez (Ms)

Director (Communications)

Monetary Authority of Singapore

ST Forum, 20 Oct 2012

MAS explains extent of its alert list

THE Monetary Authority of Singapore (MAS) thanks Mr Eng Tiang Chuan and Mr Tan Kin Lian for their feedback on gold buyback schemes ("Regulate for safer investments" and "Buyback lure requires stricter rules"; Wednesday).

Our Investor Alert List (IAL) lists unregulated persons or entities that the MAS is aware of who have been wrongly perceived by the public as being licensed or authorised by us.

This does not mean that they have breached any of our laws. Nor does it mean that we have the powers to monitor their activities or to investigate their operations.

Where there is evidence of fraud or any other breaches of law, action will be taken by the appropriate enforcement agency.

Several operators offering gold buyback schemes are currently under investigation by the Commercial Affairs Department. In order not to compromise the ongoing investigation, I regret that we are unable to disclose further information.
Angelina Fernandez (Ms)
Director (Communications)
Monetary Authority of Singapore
ST Forum, 27 Oct 2012

Regulate for safer investments

THE explanation by the Monetary Authority of Singapore (MAS) ("MAS spells out regulatory criteria"; last Saturday) to the question raised by Mr Tan Sin Liang about regulating questionable firms ("Not as good as gold at all..."; Oct 14) is that these firms fall outside the MAS' jurisdiction.

For the record, 200 investors lost $6 million in British landbanking schemes in 2010.

Sunshine Empire amassed more than $180 million before the authorities moved in.

Investors in wine firm Universal Assets Group also faced losses.

Profitable Plots and now, Genneva, are currently being investigated by the Commercial Affairs Department.

Profitable Plots, Sunshine Empire and Genneva all have one thing in common: they are listed on the MAS' Investor Alert list but were, nevertheless, allowed to operate until the authorities moved in at a later date, after more investors had invested their hard-earned money.

Now, two more gold buyback companies are offering rescue packages to investors of Genneva who want to cash out their gold holdings.

These companies have also made it to the MAS' Investor Alert list.

Is the MAS going to monitor the situation and decide to act only after more investors entrust their life savings with the companies?

Singapore has enjoyed a relatively low crime rate and is free from acute drug problems.

Citizens and visitors can walk the streets late at night without the fear of being mugged.

This has been the result of strong preventive measures and deterrence.

Such an atmosphere is a stark contrast to the situation in unregulated physical investments.

If the MAS does not wish to, perhaps some other government agency could step in to regulate the investment industry to ensure that Singapore is a city where investors can operate with peace of mind.
Eng Tiang Chuan
ST Forum, 24 Oct 2012

Buyback lure requires stricter rules

THE Monetary Authority of Singapore (MAS) said that it does not regulate schemes that involve investors acquiring physical assets like property, gold, art or wine ("MAS spells out regulatory criteria"; last Saturday).

I understand that some property or gold schemes involve more than the acquisition of the physical assets.

There is a guarantee of a buyback of the assets for the invested sum and the payment of an attractive, guaranteed rate of interest.

These schemes are more akin to the taking of money on deposit with the promise of payment of interest and capital.

Most of the investors would not have invested in these schemes if they did not carry these promises of guaranteed payments.

The MAS is responsible for the regulation of companies that take deposits.

It issues licences to banks and finance companies to carry out such activities, and supervises their business.

The MAS should not have allowed other businesses to take money from the public, with buyback promises, without getting a licence from it.

It appears that the MAS knew about the activities of these companies but decided to put their names on its website under its Investor Alert list.

If the MAS had investigated these companies at that time to find out if they were infringing the law on deposit-taking, it is likely that these activities would have been stopped earlier, when fewer people were involved.
Tan Kin Lian
President
Financial Services Consumer Association
ST Forum, 24 Oct 2012

Not as good as gold at all...

There has been much news on investors who are having difficulty recovering their investments from gold trading companies such as Genneva ("Dodge dodgy deals"; last Sunday). I am not one of these investors, but find this unfortunate episode disturbing.

This company has been carrying on gold trading with customers without any capital markets services licence, and is on the Monetary Authority of Singapore's (MAS) Investor Alert List. The list warns about organisations that are not licensed, authorised or regulated by the MAS.

The trading of gold is a regulated activity under the Securities and Futures Act.

Since the firm has not been licensed by the MAS to conduct such an activity, why was it allowed to continue operating?

It is not good enough that the MAS warned the public not to deal with such unlicensed companies. These firms should be prohibited from conducting such activities, so that people do not fall prey to them.
Tan Sin Liang
ST Forum, 14 Oct 2012