caveat emptor - minibonds

Ultimately, it's buyer beware (caveat emptor) I REFER to Tuesday's report, 'MAS tells banks to give priority to worried investors'. It may be presumptuous of Mr Tan Kin Lian to assume that the banks erred in selling structured products to retail customers. These products are regulated under the Financial Advisers Act and the Securities and Futures Act. Only qualified advisers can market and give advice on such products. They must have a reasonable basis for any recommendation that is made on structured products and must provide investors with a fair description of all material information.... Structured products are not suitable for all investors. Each product can exhibit very different characteristics as well as associated risks and rewards. They may appear to be fixed-income instruments, but may contain embedded options which do not necessarily reflect the risk of the issuing credit. These options may be 'plain vanilla' or highly leveraged exotic options. As each is unique, the risks inherent in any one structured note may not be obvious. Hence, read carefully the prospectus or pricing statement, which explains the risks, tax treatment and other important information in detail. Ultimately, it is your responsibility to protect your own interests. If you do not understand how the product works, seek clarification with your adviser. Don't buy anything that you do not understand. Jag Kuo Soon Yong The above was posted by sgnews in Singapore kopitiam. I can agree with Jag Kuo's argument about caveat emptor and buyers should not buy unless they know what they are buying. In reality, how many people know what they are buying. But that is beside the point. What if the seller peddle these sophisticated products to the ah pek and ah sohs which could barely understand what financial instruments are? Targettting them in first principle is already wrong. Now, how many of those affected belong to such a category?