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In response to media enquiries on Lehman minibonds investors' meeting today (July 26), a spokesman for the Financial Services and the Treasury Bureau said:
"The Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and 16 distributing banks of Lehman Brothers minibonds have reached an agreement on July 22 whereby the distributing banks will make a repurchase scheme to eligible minibonds investors.
"The repurchase scheme provides a practicable way to relieve the distress suffered by some 29,000 investors in the Lehman Brothers incident during the past months. The vast majority of investors who accept the scheme can get back 70% or more of their investment principal.
"The decision of the regulators was taken after a thorough and fair investigatory process, reflecting that an effective channel exists in our regulatory structure to ensure that investors' interests are protected.
"The agreement also requires the distributing banks to appoint independent professionals to review the banks' internal control and compliance systems, particularly the procedures for handling customers' complaints.
"The Government has all along been urging the HKMA and the SFC to complete as early as possible their investigations of mis-selling complaints. The regulators will not tolerate any mis-selling conducts. On the condition that the vast majority of investors accept the offer, resources from the two regulators could focus on mis-selling complaints of other non-minibond structured products. For example, mis-selling complaints of equity-linked products are still being investigated by the Hong Kong Monetary Authority on a case-by-case basis.
"Nevertheless, we will learn from experiences gained in the Lehman Minibonds issue and improve our regulatory system so that investor protection can be further strengthened."
Ends/Sunday, July 26, 2009
Issued at HKT 17:37
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