TAIWAN: FSC supports the rescue of elderly ‘laymen’ investors

. TAIPEI, Taiwan / TAIPEI TIMES / October 24, 2008 By Joyce Huang, Staff Reporter The Financial Supervisory Commission (FSC) yesterday said that it fully respects the legislature’s resolution urging the commission to come to the rescue of structured notes investors aged 70 and above who are considered “financial laymen.” The legislature cited a self-discipline principle, or the so-called “laymen clause,” approved by the Bankers’ Association of the Republic Of China in late April, to argue that banks shouldn’t sell highly leveraged and complicated financial products to clients over 70 years old unless they had signed consent letters. The legislative resolution’s author, KMT Legislator Alex Fai, yesterday asked the commission to detect and investigate flaws in the banks’ past selling procedures and, if found, banks should shoulder all responsibility and pay back the investors’ principles from investments linked to the failing Lehman Brothers. In response, commission Vice Chairman Wu Tang-chieh said that such disputes had to be reviewed on a case-by-case basis. Banks found to have violated administrative regulations will pay for the investors’ losses, he said. The commission yesterday approved a draft plan to set up a mechanism to review and approve the launch of structured notes to be implemented by December. The financial products will be reviewed and approved by the Trust Association of the Republic of China. Copyright © 1999-2008 The Taipei Times