Morgan Stanley, Goldman Sachs nearing U.S. mortgage resolutions | 2015-02-24 | HousingWire

Morgan Stanley, Goldman Sachs nearing U.S. mortgage resolutions | 2015-02-24 | HousingWire

Morgan Stanley (MS) and Goldman Sachs Group (GS) are getting closer to resolving claims that the two firms misled investors in mortgage bonds during the financial crisis, an article The Wall Street Journal said.

Morgan Stanley is in talks with Justice Department officials to settle its investigation, with the costs likely to exceed $1 billion, people familiar with the matter said. On Monday, Goldman said it was informed by federal litigators in December that the firm might face a civil lawsuit stemming from the government’s mortgage-bond probe.

Settlement talks between Justice Department officials in Washington and Morgan Stanley remain at an early stage.

Source: WSJ

Prosecutors May Finally Go After Criminal Mega-Banks | Blog, What We're Reading | BillMoyers.com

Prosecutors May Finally Go After Criminal Mega-Banks | Blog, What We're Reading | BillMoyers.com

US expands China hiring probe to Morgan Stanley | Business Standard

US expands China hiring probe to Morgan Stanley | Business Standard

The US Justice Department is probing Morgan Stanley for itshiring practices in China, according to a person familiar with the matter.

The move comes as US authorities expand their investigation into whether banks’ hiring of politically connected Chinese employees may have breached US bribery laws.

Wesley McDade, a spokesman for Morgan Stanley, declined to comment.

US authorities’ interest in the hiring practices of banks operating in China first came to light in August when media reports disclosed that the US Securities and Exchange Commission was looking at whether JPMorgan Chase & Co’s Hong Kong office hired the children of powerful heads of state-owned companies in China with the express purpose of winning underwriting business and other contracts.

JPMorgan has said it is cooperating with the probe.

The Justice Department is working closely with the SEC, which has launched a sweeping investigation that has widened from JPMorgan to look at whether a number of financial services companies have been violating bribery laws through their hiring, said the person and another individual familiar with the probe.

Apart from JPMorgan and Morgan Stanley, Reuters could not determine which other banks are under scrutiny.

The SEC has asked firms across the global financial services industry to provide information about their hiring of the relatives of government officials in China, said the two people, who were not authorised to speak publicly.

As part of that broader sweep, the SEC passed along information to the Justice Department about Morgan Stanley, one of the people said, while declining to provide details about what investigators uncovered.

Another source confirmed Morgan Stanley did receive a letter from the SEC asking for information about its China hiring practices. The source said the firm has not been contacted by the Justice Department, which may indicate that the DOJ’s criminal probe is at an early stage.

It is unclear if the Justice Department's interest in Morgan Stanley and other firms will lead to any action against them.

Authorities’ scrutiny of Morgan Stanley’s dealings in China comes after Justice Department officials repeatedly praised the bank's “rigorous compliance programme” to prevent corruption. In various speeches encouraging firms to better police for bribery, officials have pointed to Morgan Stanley's vigilance as the reason why the bank did not face charges after its former top real estate dealmaker in China pleaded guilty last year to conspiring to evade internal controls to enrich himself and a Chinese government official.

Morgan Stanley was early to spot China's economic promise, purchasing a stake in an investment bank there in 1995. It now has more than 20 dedicated China investment bankers, the most among foreign banks, and has worked on some of the largest IPOs there in recent years.

Sending chills
JPMorgan said in a regulatory filing earlier this month that it is cooperating with requests for information, including subpoenas, from the SEC and the Justice Department about its hiring practices in the Asia Pacific region.

One source said that probe began based on information provided by a JPMorgan insider.

The investigation has sent chills across global banks. It has become a common practice for investment banks to hire people with government connections, but this is especially prevalent in China due to the role the ruling Communist Party plays in the country's business.

The SEC and criminal prosecutors at the Justice Department are examining whether hiring practices violated the Foreign Corrupt Practices Act, a US law that bars bribes or special favours to foreign government officials in exchange for business.

At issue is whether the banks hired unqualified applicants as a favour to a government official who was in a position to award them business.

One person familiar with the SEC inquiry said it closely resembles in structure a previous investigation US authorities conducted into whether oil and gas companies paid bribes to circumvent import regulations in Africa and elsewhere.

Six companies including Royal Dutch Shell Plc, Transocean Inc. and Tidewater Inc and their shared freight forwarder Panalpina Inc paid a total of $236 million in 2010 to resolve related investigations.

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 雷曼查三年未有共識

        市民近年見過立法會如何透過特權法調查不同事件，議員的問題可以天馬行空，巨細無遺，關事不關事都問，其中立法會小組委員會，調查雷曼迷你債券事件的整個過程最戲劇化，調查之初群情洶湧，議員們高度投入，但到了後期，事件淡化，議會的調查工作也變得無聲無息。然而，最戲劇化的是調查經歷三年，傳召多位政商界重量級人物作證、政府、金融管理局、證監、銀監、六大銀行的行政總裁和高層，都要到立會宣誓作供，結果調查報告未能作出定論，委員會鬧出分歧，小組委員會內三名委員不同意調查報告，另寫小眾報告。

小組委員會用了三年多去調查，最後不能達致共識，同意結論，調查的成效不知有幾多，但可知的是立法會用了二千八百萬元公帑進行調查，立法會秘書處不知用了多少人力、物力支援小組委員會工作。這樣的調查對幫助市民了解真相，幫助苦主討回公道，可發揮多大作用？本質不同背景類同雷曼迷債事件當然與香港電視風波的本質不一樣，但議員提出要用特權法調查背後的考量則有相同之處，兩件事都有一群苦主，也有大力支持他們討回公道的市民，傳媒對事件大幅廣泛報道，批評矛頭直指政府官員，部份議員對事件已有鮮明的取態，調查目的是向官員問責，要尋找證據，印證自己的取態正確。有了這些背景和考慮，市民見到在雷曼事件中，調查結論與傳媒專題報道的版本分別不大，不同的地方是議員們在大聲譴責官員時，來得更加擲地有聲，假如香港電視真的會由立法會用特權法調查，結果是否與雷曼事件報告一樣？屆時會否出現兩份報告，沒有一致的結論呢？

香港電視事件發展至今，有很多不同的消息，顧問報告內容透過傳媒廣傳，議員、市民對事件相信或多或少都有一些看法。今天，有不少論者都以彰顯程序公義的理由，要求政府公開發牌決定的內容和細節，因為大家相信唯有這樣做，才能讓申請牌照落敗的香港電視取回公道，假如程序公義是要徹查的重點的話，其實就事件進行司法覆核比起由立法會調查應是更實在，更有效的做法，前車可鑑，立法會就雷曼事件調查的往績，難以有令人有信心，交給法庭做，絕對不會有一個調查，但兩種結論的情況出現。

        有議員說司法覆核浪費公帑，用特權法調查發牌事件較合理，但立法會調查何嘗不需花掉數以千萬元計公帑，在彰顯程序公義上，用公帑支付法庭的訟費是否不及用錢於立法會上，實屬見仁見智，再者若論到訟費，我們也不能假設政府一方輸定了而要大花公帑，對市民而言，公帑用得其所最重要，今天無論是用特權法或司法覆核去查找發牌決定的事實，使用公帑免不了，但相信市民希望用了公帑之後，至少大家會見到一個清晰的結論。下周議員們都要表態，有雷曼事件的前科，立法會各派議員應密慎考慮用哪種調查方法才真正是有效的做法。

雷曼苦主猶在銀行外抗議

【香港商報訊】記者林啟健、鄺偉軒報道：在香港，雷曼破產令本港數以萬計的投資者血本無歸，苦主在多家銀行外連年抗議示威，要求銀行賠償。不少苦主更哭訴被誤導買入有關投資產品，當局調查亦發現有銀行職員銷售時涉及不誠實、欺詐、欺騙等涉刑事罪行行為。 雷曼倒閉又引發東亞銀行(023)擠提。2008年9月22日，聲稱東亞財政困難及被政府接管的虛假消息，以手機短訊形式不斷散發，最終於9月24日大批存戶到東亞各分行提款。特首、財政司司長、財經事務及庫務局局長等官員相繼澄清事件，強調本港銀行體系穩定、東亞財務穩定，此外，長和系主席李嘉誠增持東亞股份，而且東亞出招優惠回頭客，擠提事件一天內基本平息。 存款保障計劃已於2006年9月25日正式實施，為維護本港銀行體系穩定，雷曼事件後港府動用香港外匯基金儲備為香港銀行提供全數存款保障至2010年12月31日，屆滿後就將補償上限下降至50萬元。 金管局加強投資者保障 金管局統計顯示，共收到21868宗投訴個案，當中13833宗涉及迷你債券，另外，4797宗涉為以雷曼兄弟作為參考機構的信貸掛鈎票據、2924宗為由雷曼兄弟安排或發行的股票掛鈎票據。當局與銀行展開7個月的馬拉松談判，達成終極回購雷曼迷債方案，約2.8萬名苦主中，大部分都可獲得相等於本金70%的賠償。不過，約5%即1400名專業投資者，不獲任何賠償。現時，仍有不滿銀行賠償的苦主在銀行外抗議。 其後，金管局加強投資者保障，下令銀行必須於2009年9月前實施傳統及投資業務實體分隔，並要求銀行全程錄音以及設立14日冷靜期等。   am730  (發行量 / 接觸人次: 398,739)

金管局仍在調查一些涉及不當銷售精明債券及其他雷曼兄弟相關個案

金管局已於2012年6月6日就立法會轄下研究雷曼兄弟相關迷你債券及結構性金融產品所引起的事宜小組委員會 (小組委員會) 的報告發出新聞稿聲明其立場。 

然而，就小組委員會報告中的各項建議，金管局已實施了部份建議，包括加強了現場審查和非現場監督，及進行喬裝客戶檢查。金管局將會繼續因應市場發展及公眾對投資者保障的期望的轉變，在適當情況下推出進一步措施，加強對銀行的監管，保障投資者利益。 

銀行在向其客戶銷售證券產品時，須遵守相關的監管規定，當中包括«證券及期貨事務監察委員會持牌人或註冊人操守準則»(下稱《守則》)，以確保其建議是合理適當的。例如，《守則》訂明，持牌人或註冊人須確立其客戶的財政狀況、投資經驗及投資目標；及持牌人或註冊人就衍生產品向客戶提供服務時，應確保其客戶已明白該產品的性質和風險等。因此，銀行在判斷產品是否適合客戶時，應考慮個別客戶的相關資料和情況，而不應只因產品的風險高便斷定該產品不適合其客戶。例如，高風險的產品可能適合一些風險承受能力較高及對證券產品有相關經驗和認識的客戶，而風險承受能力較低的客戶也可選擇將其淨資產中的一小部分資金來投資於高風險的產品，以追求較高的回報。

監管機構已有多項監管規定，就設計適當的客戶風險狀況評估方法向銀行提供指引。例如，證監會在《為客戶提供合理適當建議的責任的常見問題》中要求銀行向客戶取得其財政狀況、投資經驗、投資目標、投資知識、投資期、承受風險能力及其提供定期供款和額外抵押品的能力等資料，及在《守則》中要求銀行評估客戶是否對衍生工具有認識，以符合“認識你的客戶”的要求。另外，金管局亦要求銀行收集客戶年齡和教育水平的資料，並按產品類別收集客戶投資經驗的資料。

此外，為投資者提供進一步的保障，金管局於2009年3月25日發出的「實施«金管局就分銷與雷曼集團公司相關的結構性投資產品的事宜提交的報告»中的建議」通告，要求銀行將客戶風險狀況評估獨立於銷售程序，由與銷售無關的職員進行。客戶應獲提供其風險狀況分析的副本，並確認同意風險狀

況分析正確。評估程序應予錄音以供查核記錄，證明銀行依循適當的程序。

金管局會因應其監管經驗，在適當情況下向銀行提供指引，以進一步改善客戶風險狀況評估的做法，加強投資者的保障。金管局會繼續進行定期現場審查以查核銀行是否遵守有關監管規定。

金管局曾表示，如投訴人願意，本局可轉介其投訴個案予消費者委員會考慮能否運用保障消費者的相關權力及資源協助有關投訴人。根據記錄，在收到投訴人的要求後，本局已將相關投訴個案轉介給消費者委員會以決定個案是否符合資格申請消費者訴訟基金的法律協助。

香港金融管理局

2013年8月27日

請證監會和金管局回應幾個問題, 並 要求重新檢討銀行在銷售雷曼相關債券時期所做的 產品與客戶風險評估事項

證監會行政總裁     歐達禮先生:

金管局署理副總裁   戴敏娜女士:

7月19日證監會和金管局與RBS(前ABN)銀行,就雷曼ELN一事達成協議. RBS銀行因為風險評估和風險配對程序出現問題,要賠償100%本金予合資格投資者. 這一姍姍來遲的協議,也帶給雷曼苦主社羣一絲欣慰: 盡管雷曼尚未解決,堅信正義終必伸張.

A.      借此契機,我們就雷曼債券事件,風險評估和風險配對事項,請問證監會和金管局以下幾個問題,敬請回應:

1          立法會研究雷曼兄弟相關迷你債券及結構性金融產品所引起的事宜小組委員會,於2012年6月發表報告書(以下稱:該報告書)一年多了. 證監會和金管局作為被該報告書所提及的兩個需要負上最重大責任的政府部門,至今仍裝聾作啞,當佢冇到. 這在政府部門回應立法會及各種社會聲音的歷史中,實屬罕見. 請問證監會歐達禮先生和金管局戴敏娜女士: 證監會和金管局對該報告書內容和意見,持何態度? 是否打算置之不理?!

2          該報告書(第x頁)指: "小組委員會認為, 證監會在行使該項權力時,不應同意採納任何為摒除某些人士於和解建議之外而武斷地定立的非法定門檻."請問證監會歐達禮先生: 在迷債和解建議中,將"經驗投資者"摒除在外;在星債和解建議中,將第4、5級風險客戶摒除在外.是否武斷做法? 證監會會否接受該報告書意見,重新與相關銀行再作檢討.

3          該報告書(第90頁)指: "小組委員會認為,雷曼信貸相關債券並不保本,且與相關資產掛勾,不應被評為低、中風險的產品." 然而,直至2012年6月,有苦主向金管局調查員指出該報告書以上內容時,該調查員依然堅持將星展銀行評Constellation債券為低、中風險的第2級產品,作為評估風險配對標準,稱: "我只係睇果個產品係2(註:指Constellation債券係2級風險),你係3(註:指投訴者當時被評為3級風險客戶),就沒問題了....我只係睇佢有冇錯配."(以上為逐字記錄). 請問金管局戴敏娜女士: 這是金管局的既定立場嗎? 現在需要檢討修正嗎? 其實,某投資產品風險屬性高或低,對於監管金融和投資的金管局精英專家們,淺顯如小學生的加減算術題,答案早已了然於胸. 金管局某些人之所以昧著良心說瞎話,是屈服於私利或權貴,但卻因佔用公器,已然傷害了社會公義和其他人. 一旦日後有了權威性的法庭裁決,認為Constellation債券被評為低、中風險是錯誤的. 金管局這些人的專業失德和行政失當罪行定當暴露無疑. 除了要負上失職之罪,羞恥二字也將成為他們一輩子的名字. (請留意,2010年已有法官判詞,表示同意當時上法庭作供的三位專家證人的意見,認為Constellation債券是高風險產品. — DCCC 526 / 2010)

B.      銀行對客戶風險的評估存在嚴重問題,應該全面重新檢討.

1          現在所知,銀行為客戶填報的客戶風險評估問卷,是用來衡量產品與客戶風險匹配與否的至關重要性文件. 然而,在填報當時,過程卻相當粗疏簡陋.絕大多數是由銀行職員代筆. 匆忙簡單. 沒有重要性警告,沒有指引,沒有說明. 許多銀行職員有目的地引導客戶選擇高風險答案,甚至謊稱,問卷只是銀行一般性客戶資料調查,無關緊要,從而完全不問或只問小部份題目. 問卷中一些投資心理類題目或詞不達意,或圖像混淆,極易誤解,佔份比重卻奇高. 所以,客戶"擇選"的問卷答案普遍不真實,不準確. 評出來的客戶風險級別不可靠.

2          絕大多數銀行的客戶風險評估問卷,沒有附上答案分數. 投資者不知道所選擇的答案的分數的高低,及佔整體比重的大小,無法衡量所選擇的該答案是否恰當. 簽名時也沒有被告知整篇問卷所得總分,及劃分風險級別的界限,無從判斷被評定的風險級別是否正確,或是否要對某些選項作些調整. 當時客戶心中無數,是稀里糊塗的在問卷上簽名,不意味他們充分理解和認可該問卷對他們的評估結論. 如今,單憑簽名,客戶便需負全責. 對客戶絕對不公平.

3          據本大聯盟統計資料,2006年,有70%以上的銀行現有投資客戶的風險評級突然被評高1至2級. 當時的投資大環境並沒有特殊的大變動,大量投資者不約而同,集體地提升了各自的投資風險興趣和承受風險能力,不可思議! 也不是客觀事實. 那是銀行有目的的利用風險評級制造出來的奇跡. 本港之所以超多雷曼苦主,就是這樣制造出來的. 這是香港銀行系統性的不道德行為.

4          客戶風險評估問卷的問題設計不嚴謹,不科學,或重覆,或前後矛盾,輕重不分,本末倒置.... 答案的給分也不合理. 這些情況,相信證監會和金管局的專家們,心裡面比誰都清楚. (大聯盟另會有具體實例附上). 這樣得出來的客戶風險評級結論不公正.

另外:

C.      請問證監會歐達禮先生和金管局戴敏娜女士: 摩根史丹尼發行精明債券的違規問題, 以及其他還沒有集體和解協議的銀行的違規行為,是否還在調查中?

D.     金管局李令翔先生,2011/2012年間多次接見雷曼苦主代表,曾重覆承諾: 對幫唔到和解的苦主,將會把個案轉介給消委會訴訟基金. 並且會向訴訟基金的律師們提供金管局所有相關調查資料,包括一些不便向苦主透露的個案調查資料和已掌握到證據的銀行系統性犯錯資料. 以助基金會通過法律途徑,為苦主討回公道. 請問金管局戴敏娜女士: 金管局這樣做了嗎? 或者那只是金管局急於卸膊的偽善之詞! 為何消委會訴訟基金2011年後,與雷曼相關債券訴訟的新申請個案,至今被接納者僅一例?! 這可是政府對雷曼苦主仍開放(?)的最後一道門. 也是政府可以為監管部門的嚴重失職而贖罪的最後機會.

雷曼苦主大聯盟

聯絡人: 陳浩偉

電話: 90370044

電郵: lbvweb@gmail.com; hooeddy@gmail.com

通訊地址: 63, Cadogan Street, Rm.718, 7/Floor, Sincere Western Mansion, Kennedy Town, Hong Kong

此件抄送:  申訴專員 黎年先生

           消委會訴訟基金 陳主席

           財經事務局長 陳家强先生

           立法會主席 曾珏成先生

2013年7月29日

Trial of Goldman Sachs trader opens in New York

NEW YORK (AP) — A government lawyer says a former Goldman Sachs trader who referred to himself as "Fabulous Fab" deceived investors about mortgage-based securities in a classic case of "Wall Street greed."

Securities and Exchange Commission lawyer Matthew Martins gave opening arguments Monday at the Manhattan trial of Fabrice Tourre (fah-BREES' toor) .
Tourre's lawyers say he's done nothing wrong.
The SEC says Tourre failed to divulge that a billionaire-led company helped pick assets that would decide the value of the investment. At the same time, the company was betting against them.
Goldman Sachs settled charges brought against it, paying $550 million.
Tourre grew up in France and moved to the U.S. in 2000 to study at Stanford University in California.

郭中行 資深評論員

本港作為國際金融中心，所有金融交易都要通過港交所的電腦系統進行，因此全面檢視本港網絡安全是必須的。但同時，立法會也應代表市民表態，譴責美國政府侵犯本港人權的行為，這也是立法會議員的應有之義，當然心繫外國者除外。


http://paper.wenweipo.com/2013/06/19/PL1306190005.htm

U.S. Fears Edward Snowden May Defect to China: Sources - ABC News

U.S. Fears Edward Snowden May Defect to China: Sources - ABC News

Protesters Worldwide Rally to Support Whistleblower Edward Snowden | Common Dreams

Protesters Worldwide Rally to Support Whistleblower Edward Snowden | Common Dreams

Protesters Worldwide Rally to Support Whistleblower Edward Snowden

by Allison Kilkenny

Immediately following the announcement that the source behind The Guardian’s NSA spying(Photo: Xopherlance /Flickr)revelations is Edward Snowden, a 29-year-old NSA contractor, protesters around the world rallied to show support for the whistleblower.

In New York, a group of activists gathered in Union Square amid downpours. Organizer Andy Stepanian called Snowden’s cause “a marginalized story:”

It’s saturating the media right now, but history has shown that when these whistleblowers come forward—whether it be Daniel Ellsberg or it be Bradley Manning—within a short period of time, there are attempts to malign the individual or co-opt the narrative or try to demonize that individual for what they did. We should at least be asking questions right now that Edward Snowden put aside a $200,000/year career, a house in Hawaii and left his loved to go on the lam to show people the truth, which was that our government was spying on us without warrants under the auspices of the war on terror. And in doing so they violated our Fourth Amendment rights.

In Hong Kong, up to 1,000 Snowden supporters are expected to stage a protest to call on the government to protect him.

The AFP reports that the group, including lawmakers, will march first to the US consulate and then government headquarters to urge the administration of the semiautonomous territory to not extradite Snowden.

“We should protect him. We are calling on the HK government to defend freedom of speech,” Tom Grundy, a rally spokesman, said Wednesday.

“We don’t know what law he may or may not have broken but if Beijing has a final say, they don’t have to extradite him if he is a political dissident,” he told AFP.

When asked why he chose Hong Kong as a refuge, Snowden cited the city’s “strong tradition of free speech.”

On Wednesday, Snowden told the South China Morning Post: “People who think I made a mistake in picking HK as a location misunderstand my intentions. I am not here to hide from justice; I am here to reveal criminality.”

Several lawmakers have agreed to take part in a discussion forum following the protest, including prominent pro-democracy politician Albert Ho, according to Grundy.

The online community has also rallied behind Snowden, organizing a White House petition demanding a presidential pardon that has already attracted more than 61,000 signatures, while a separate campaign was launched to help pay for Snowden’s expenses.

Facebook employee Dwight Crow donated $1,000 of his own money to help Snowden with legal fees, hotel bills or flight costs. Facebook is one of the companies that has denied links to the NSA’s Prism program.

Crow wrote: “I’d imagine Snowden’s fate is going to be determined by forces larger than legal bills, but have heard he’s stuck in HK with frozen accounts. Figured a little cash might help significantly.”

Obsession over Snowden’s personal life highlights a major flaw of the establishment media: the tendency to fixate on minute details while completely missing the big picture, namely the US government’s vast spying program.

While the media speculates about Snowden’s motives and allegiances and salary and pontificates about his dancer girlfriend and if she’s feeling lonely, Snowden’s supporters seem to grasp that this story is about something bigger.

“Anyone who uses the internet and expects some privacy should be concerned about what was said in [Snowden’s] interview, so I imagine we will get a good turnout,” said Grundy.

© 2013 The Nation

Allison Kilkenny is the co-host of the progressive political podcast Citizen Radio (wearecitizenradio.com) and independent journalist who blogs atallisonkilkenny.com. Her work has appeared in The American Prospect, the L.A. Times, In These Times, Common Dreams, Truthout and the award-winning grassroots NYC newspaper The Indypendent.

Think the big banks should be broken up? You're in good company.

HCA 495/2011 Morgan Stanley Octave Notes sold by Bank of China HK

The judge blasted Bank of China lawyer from Clifford Chance to read about the case before coming to court, the lawyer cannot give the judge of using high price mediators for this case, and the judge told this stupid female lawyer to answer his question of the reason of mediation frauds of bank of China which disgrace the court.

New Lehman case should be judged to be conducted in Mandarin :

香港特別行政區高等法院
日期: 2013年05月16日 (星期四)
聆案官聆訊案件表
Date : Thursday, 16th May 2013
IN THE HIGH COURT
MASTER’S DAILY CAUSE LIST
第38庭2字樓

⋯⋯ Court No. 38(2/F)
龍劍雲司法常務官

Mr. Registrar K.W. Lung


內庭聆訊(公開)

Chambers Hearing (Open to Public)

The wife of Ronnie Tong is working in Clifford Chance that help the bank to cover bank frauds in Lehman cases :

上午10:00 am
內庭聆訊(公開)
Chambers Hearing (Open to Public)
民事訴訟
HCA 495/2011
Lehman case against Bank of China (HK)
Case Management Summons
無律師代表
In Person
高偉紳律師行
Clifford Chance

Watchdog to arm investors

The Securities and Futures Commission proposed to raise the bar for professional investors, who now will have to undergo a suitability test before making investments.
The watchdog is seeking to revamp the code of conduct for brokerages and wealth management firms during a three-month public consultation period starting yesterday.
Its move was sparked off by the 2008 Lehmanminibond saga.
The SFC recommends that intermediaries, when offering investment products to individual professional investors, conduct the so- called suitability test. This includes conducting product due diligence to ensure the products they are recommending match the clients' current conditions.
Intermediaries would have to meet such requirements when selling any financial product to professional investors.
They can, however, still take part in private placements.
The watchdog will require the suitability requirements be detailed in contracts signed between professional investors and financial institutions. The contracts will also have to list actual services provided by intermediaries to the client.
Stephen Po Wai-kwong, senior director for intermediaries supervision at the SFC, said the amendments would not raise compliance cost for financial institutions as most of the procedures are already being implemented.
It will ``give investors better protection, as they would be in better positions to claim upon misconduct because the responsibilities of the intermediaries will be written in black and white,'' Po said yesterday.
Individuals, together with their investment vehicles and family trusts, are considered professional investors if their total portfolio is worth HK$8 million or more.