The Financial Supervisory Commission (FSC) said yesterday that it is in intensive talks with the Bankers Association of the Republic of China (銀行公會) to increase the maximum amount investors can claim back on Lehman Brothers-linked structured notes from NT$1 million (US$31,000) to NT$5 million, after the revised cap was rejected by the association on Friday.
“We hope the cap can eventually be lifted to NT$5 million,” Lin Tung-liang (林棟樑), deputy director of the commission’s banking bureau told a media briefing yesterday. “But the association appears to be determined to include a condition that such claims should be reviewed and ruled on by the commission before being handed to the association.”
The association only wishes to handle complaints from investors who are claiming less than NT$1 million, up from a previous limit of NT$500,000.
The association wants the commission to receive and review complaints made by investors who wish to claim amounts between NT$1 million and NT$5 million before they are handed to the banks, although the commission has reiterated its stance that it wants the banks to handle all claims of up to NT$5 million.
The commission wants the Securities and Futures Investors Protection Center to play a neutral role and mediate between banks and investors in the processing of complaints, although the center has no legal right to mediate on claims and does not have the number of staff that would be required, commission Vice Chairman Wu Tang-chieh (吳當傑) said, adding that no consensus had been reached between the commission and the association.
Wu said the commission would do its best to seek ways to aid investors who had incurred losses.
Wu was responding to a request by Democratic Progressive Party Legislator Tsai Huang-liang (蔡煌瑯) for the commission to implement a complaints mechanism as soon as possible as Tsai had been receiving complaints from investors, including a couple surnamed Yeh (葉).
The couple yesterday accused Taipei Fubon Bank (台北富邦) of failing to fully disclose the risk when they purchased US$730,000 in structured notes and had refused to allow them redeem the investment following a three-month lock-up period.
“In less than a year we’ve lost more than NT$10 million,” the couple, accompanied by Tsai, told a media briefing yesterday morning.
In response, Fubon Bank yesterday flatly rejected the accusations, saying in a written statement that the bank’s wealth manager had not rejected the couple’s request to redeem their investment.
“The fund manager only advised them to be calm and redeem their investment at maturity since such investments continue to distribute interest payments on a regular basis which can help to make up for their losses [on the capital investment],” the statement said.