Our Ref.: B1/15C
9 January 2009
The Chief Executive
All Authorized Institutions
Dear Sir/Madam,
As you will be aware, the Financial Secretary (FS) published the reports of the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission on the sale of structured products related to Lehman Brothers on 8 January 2009 (http://www.hkma.gov.hk/media/chi/doc/other-information/lehman_report.pdf). Given the implications these reports have on the future sale of structured investment products to retail investors, I urge your institution to study them carefully.
Registered institutions (RIs) should note in particular the 19 recommendations in the HKMA's report aimed at strengthening the existing regulatory regime and investor protection framework. As a matter of fact, the HKMA has already asked RIs to carry out a number of these recommendations in our previous communications with them. In view of the latest developments, the HKMA expects all RIs to:
If you have any questions on the above, please get in touch with your usual supervisory contact at the HKMA.
Yours faithfully,
YK Choi