親愛的銀行職員們，
您們是銀行工作的最前線人員。在迷你債卷事件上，證監會，銀監會和銀行不看這個產品的風險只是信了投資銀行的一面之詞，给香港市民推銷這麼個打著”跟7個著名公司信貸掛鈎“旗號的有毒產品。然後，政府和銀行管理層一是推卸責任，一是作為(“mis-selling”)不當銷售手段將責任全部推到了前線銷售人員的身上，或者是指責投資者的風險意識。
銀行堅稱銀行是給客戶介紹了產品的真實特徵和風險的，卻絕口不談到底甚麼是產品的真實特徵和風險，連產品究竟是“跟7個著名公司信貸掛鈎”呢還是“跟7＋100多個各種類別的公司信貸掛鈎”都不敢公開講一下，更不敢提抵押品的實質到底是怎麼回事。
現在，香港市民對於銀行的信任已經全部喪失，香港的諸多銀行信譽已經是等同跟“老千”掛鈎， 銀行職員的聲譽也一落千丈，等同跟 ”為錢財出賣良心” 掛鈎。
當夜深人靜的時候，眾多的各式迷你債卷受害人，夜不能寐，悔恨當初不應該相信銀行。
許多有良知的銀行職員們，恐怕也常常是夜不能眠，深受良心譴責，因為您們知道當初您們自己確實是不清楚迷你債卷的真實面目和風險。您們也以為這只是“跟7個著名公司信貸掛鈎”，既不知道甚麼是”First-To-Default“ 更不知道其含義是甚麼。 現在，銀行管理層堅持以謊圓謊，您們也為欺騙了客戶而內心深感不安。您們自己也有家人甚至是年邁的父母都買了迷你債卷或其它打著“跟7個著名公司信貸掛鈎”的旗號來騙人的信貸衍生產品。您們中的許多人的內疚是雙層的：既對不起曾經信任自己的客戶，更加愧對自己的父母或親朋好友。
您們心裡清楚地知道，關於迷你債卷或信貸掛鈎的產品，在過去幾年裡，銀行到底作過些甚麼樣的培訓和銷售指引，
您們心裡清楚地知道，關於迷你債卷或信貸掛鈎的產品，在過去幾年裡，銀行是怎樣曏您們介紹迷你債卷的實質的。
您們心裡清楚地知道，關於迷你債卷或信貸掛鈎的產品，在過去幾年裡，銀行有沒有曏您們提起過迷債抵押品。
您們心裡清楚地知道，在過去幾年裡，您們對於迷你債卷或各式以““跟7個著名公司信貸掛鈎”之名的信貸衍生產品迷債產品的真實面目和風險的瞭解到底是有多少，
迷你債卷的錯誤，主要應該由銀行管理者來承擔。不可以將好的業績歸功於管理層，錯誤歸於職員。讓職員來當替罪羊。
銀行管理者在迷你債卷的事件上一直在說謊，您們是心知肚明的。 您們也不得不跟著說謊或者保持沉默。
您們意識到，您們今天的沉默，實際上是幫助銀行管理者一起欺騙客戶市民。儘管您們的動機是在幫助您們自己保住這份工。
可是，您們的良心始終覺得不安，因為您們是有良知的，您们并不愿意出卖诚信。
孔子云：”人而无信，不知起可也”。
香港致力於成為金融中心。金融業的發展會極大地有力於您們的事業。 香港政府和證監會一直在致力發展的香港成為債卷中心，發展伊斯蘭債卷，而香港過去幾年大量零售的”債卷“就是：迷你債卷，精明債卷， 結構性零售債券（Constellation)等。
如果這次銀行管理層可以利用香港的法律漏洞和銀行的巨資來蒙混過關，逃避責任。
其結果就是造成人們心目中的“香港”和”債卷”的聯繫只是跟“迷你債卷，精明債卷， 結構性零售債券（Constellation)“等騙人產品掛鈎， 只是跟銀行依仗財勢欺壓普通市民的形象掛鈎。金融業靠信譽。失去了市民們對銀行的信任，銀行怎樣發展呢？您們的事業怎樣發展呢？
人們會不會永遠是疑問重重：此”債卷“非”彼債卷“？ 市民們還敢相信您們關於其它理財產品的介紹麼？
當數年後的下一次騙案再次發生的時候，銀行管理層就會更加無所顧忌了。到那時，您們和您們的家人還能安全躲過嗎？到那時，誰來幫助您呢？
銀行只有勇於承認錯誤，才能真正地改正錯誤，讓銀行再次成為香港人可以信任的銀行，而不要讓銀行的信譽一直跟“老千”掛鈎，不要讓銀行職員的信譽跟“老千銀行的職員”掛鈎。
各位有良心講誠信的銀行職員們：
看見銀行管理層見利忘義，為了一己之利，不惜損害公眾利益，來欺騙香港市民，欺騙您們和我們的父老鄉親們，您們是否可以考慮勇敢地站出來，曏社會講明真相？
如果您們可以為了社會公益而勇敢地站出來曏社會講明真相，您們不僅僅是幫助了迷你債卷的受害人，您們也是在幫助包括您們的親朋好友再內的全香港市民可以在將來避免遭遇類似的事件。
您們這樣做，是在幫助香港的諸多銀行恢復已經受損害的信譽，重新成為市民們可以信賴的銀行。
您們這樣做，是在幫助香港成為真正意義上的金融中心，而不是金融騙局中心。
您們這樣做，是有助於香港政府在香港發展債卷中心，發展伊斯蘭債卷的發展，
您們這樣做，是有助於幫助發展香港的金融業和您們的事業。
您們這樣做，是在幫助我們大家，讓香港有個美好的明天。
謝 謝
永亨银行迷你债卷受害人
2009年3月24日 星期二
2009年3月15日 星期日
Open Letter to Legco Lehman Incidence Investigation Committee and SFC
Dear Legco Member, Dear SFC Officer,
We are writing to you to express our questions and disagreements with the “SFC Lehman Brothers Minibonds Incident Report” (“the SFC Report”). We respectfully request that Legco Lehman Incidence Investigation Committee investigates questions below regarding Banks’ wrong-doing in conjunction with the sale of minibonds to retail investors, and moves towards proper compensation for minibond victims. We respectfully request that SFC addresses each question below to the Legco Committee and to the public.
The key issue with Minibond is not about if it declared “principal protected” or not. The key issue is about misrepresentation and omission of the true nature and risk of the so-called “Minibond”. Lehman bankruptcy only triggered an awakening call. It made the public and minibond holders realize that the true nature and risk of minibond was not being disclosed in the past few years.
It is not uncommon for banks to find all the possible loophole even lame excuse to hide the truth of minibond sales, in the name of the best interest of Hong Kong as Financial Center or in the name of the best interest of shareholders. The Government must try its best to protect the public's interest, especially when public does not have much legal way to challenge banks. A thorough investigation on the minibond sales will help to restore the tarnished trust in banks, and will be for the best interest of Hong Kong as a financial center in the long term.
Minibond
1. Minibond is “Secured collateral and Swap” per SFC summary.
- Most minibond collateral was AAA-rated securities. The AAA-rated securities waere mostly AAA-rated CDO/Synthetic CDO.
- Swap agreements included Credit Default Swap (CDS) with 5-7 well-known companies as reference entities.
- Most CDO collateral included CDS with 100-155 reference entities whose credit rating in the category of AAA to CCC. It was rated as AAA after enhancement and its average portfolio credit quality was usually at BBB/BBB. A CDO portfolio with 125 reference entities (Series #19 collateral), would lose 100% principal upon the 10th credit event in respect of reference entities.
Product Description and Disclosure
2. Definition of full disclosure by SFC:
(2.1) In the SFC Report Section “2.2. Regulatory Structure”, Section 2.2.1 stated “ …disclosure and suitability. The first of these is the responsibility of SFC - to ensure that, based on the information provided by the product issuer, sufficient information is disclosed in the product documentation by the issuer to enable a reasonable person to make an informed decision. “.
We assume that ‘a reasonable person’ here refers to persons who are not credit derivative product experts such as 黃元山，迷宗.
- As reported in news:“證監會行政總裁韋奕禮表示、證監會角色並非要監察投資產品價格是否穩定, 而是要確保所批核之投資產品, 有全面市場披露”.
(2.2) William Pearson of SFC said in 2005: “(…). We are seeing more complicated products come on to the scene, but I think as long as the disclosure is clear, accurate and not misleading, we will be happy to see that carry on”, in the Asian Structured Products Review 2005, (http://www.pacificprospect.com/downloads/asian_structured_products_review.pdf )
3. The SFC Report failed to point out that the prospectuses misled retail clients with the prominent “credit-linked to 7 reference entities”.
By choosing Synthetic CDO as minibond collateral, the prospectuses should have been fully aware that minibond’s value would be greatly decided by credit risk of its collateral’s portfolio holding. However, the prospectuses never clearly stated that minibond was in fact credit linked with “7 AND MANY Other” reference entities. The prospectuses failed to disclose where the risks truly lie.
Why did the SFC Report fail to find the prospectuses not meeting SFC’s “Clear, Accurate, No misleading” requirement?
4. The SFC Report Section 16.3.1 made biased observation on the prospectuses.
The SFC Report quoted the declaration of “not principal protected”. But the SFC Report failed to notice the following statements in the page 9 (of Series #27) of the Issue Prospectus:
"Are our Notes principal protected?
Our Notes are not principal protected: if a credit event happens to any one of the 7 reference entities before the maturity date, you will lose part, and possibly all, of your investment”.
Above statements effectively suggested that the “not principal protected” was conditioning on the credit event of 7 reference entities. Banks staff did not offer any other advise on such understanding.
What was the reason that the SFC Report did not identify above inaccurate and misleading statement?
Why were most (or all) banks staff having the similar misunderstanding on the condition of “not principal protected”?
5. The SFC Report Section 16.3.2 made biased observation on the prospectuses.
The SFC Report quoted “Our Notes are not suitable for everyone. (…). Before applying for any of our Notes, you should consider whether our Notes are suitable for you in light of your own financial circumstances and investment objectives. If you are in any doubt, get independent professional advice.” from the Prospectuses.
However, the SFC Report failed to notice the following statements in the page 10 of Issue Prospectus (Series #27):
“Who should buy our Notes? Are they suitable for everyone?
Our Notes are not suitable for everyone. (…).
Our Notes are only suitable for investors who are:
looking for fixed rate quarterly interest income (…),
confident that none of the 7 named reference entities will be affected by a credit event. (….)”.
Above statements in plain English clearly suggested (to retail clients) that, if you were confident on the 7 reference entities, the Notes was for you.
What was the reason that the SFC Report did not identify above misleading and inaccurate statements in the prospectuses?
6. A prospectus must disclose where the money would be invested into and where the interest and repayment of principal would be coming from. The SFC Report failed to identify that the Prospectuses never clearly disclosed such information. Why did the SFC Report consider the prospectuses disclosure as sufficient and acceptable?
The prospectuses only stated that “We use the money which you invest in our Notes to buy a package of assets.” (page 19, “What happens to my money? How can Pacific International Finance Limited pay me back?”).
The brand name of minibond and the term “credit linked to 7 reference entities” gave retail clients false illusion that the minibond money would be invested into debt/loans of 7 reference entities. The truth was that, the Minibond money was not invested into the 7 reference entities or any of the undisclosed 100+ reference entities that comprised of the minibond CDO collateral.
7. The SFC Report failed to identify that the prospectuses omitted CDO collateral related material information.
(7.1) Plenty of credit rating information on the 7 reference entities was disclosed. The prospectuses mentioned the AAA-rating on the CDO. But there was no mentioning on the credit rating information/or guideline on the reference entities that comprised of CDO collateral. The Prospectuses at least should be able to state clearly about credit linked to many other reference entities, and to disclose some guideline on the criteria for selection of the reference entities such as the expected number of reference entities and the expected percentage of reference entities below BBB/or BB /or B-/etc.
(7.2) The prospectuses at least should be able to disclose that a Synthetic CDO usually would experience 100% principal loss when 8% (or less) of the reference entities has default event. It does not need 10% or more of the reference entities to have default event for the 80%-100% principal loss.
The prospectuses did not provide “sufficient information” on minibond, and obviously were way off the “Clear, Accurate and non misleading, Disclosure (全面市場披露 )” requirements. We contend that the prospectuses consistently omitted material fact and gave misleading statement, so that a reasonable person would not be properly informed of the true nature and risk of minibond.
Why did the SFC Report consider the prospectuses disclosure as sufficient and meeting SFC requirements?
Code of Conduct at Point of Sale
The SFC Report Section 2.5 listed requirements on regulated body (banks) or HKMA/SFC registered staffs.
8. The SFC Report failed to identify that banks provided clients with incomplete material information.
The CDO collateral information held the most important material information on the Minibond. The diminished collateral value also proved the criticalness of such collateral information. The prospectuses were only part of minibond information. Detailed Information about the collateral, including evidence of the rating and the terms and conditions of the collateral, would have provided Minibond buyers with a 2nd chance to know what the Minibond was really comprised of.
Such collateral information was not available to minibond purchaser when they signed the purchase agreement. However, such collateral information usually would be made available prior to the issue date. Banks should have requested such information after offer closed. Banks should have sent such CDO collateral information documents /or notice of such documents’ availability to minibond purchasers. Banks are required to provide clients with relevant material information for derivative products, according to SFC’s Code of Conduct. But Banks failed to do so. Why was this not mentioned in the SFC Report?
9. The SFC Report failed to identify that Banks’ due diligence was insufficiently thorough over the past few years’ minibond sale. Evidence is as follows:
- Banks should have cautioned us that minibond was not invested into any debt / bonds issued by any of the 7 reference entities.
- Banks should have cautioned us that AAA-rated securities (or AAA-rated CDO), may not be the same as AAA-rated conventional bond, and should have cautioned us about the nature and risk related to CDO collateral. $10 million cash or cash equivalent is very different from $10 million worth of combined asset value of cash / stock /commercial real estate / residential real estate / machinery
- It was never mentioned to us what CDO was comprised of and what kind of risk CDO may have.
- It was never pointed out to us that the key asset of CDO collateral was CDS with many entities, and its value was decided by the credit risk or default event of its portfolio holding.
- It was never mentioned to us that a AAA-rated Synthetic CDO may have average portfolio credit quality at BBB/BBB-.
- We were never told to be aware that minibond was, in fact, not only credit linked with 7 reference entities, but also credit-linked with many other entities at various rating categories from AAA to CCC. A 8% (or less) default rate in the CDO collateral would result 100% principal loss.
- And, we were never explained about the First-To-Default with the 7 reference entities, nor the credit event redemption amount. Constellation is an example about how crucial to understand such terms prior to purchase.
We contend that, instead of exercising due diligence, Banks in fact collaborated, we would suggest fraudulently, with the minibond issuer, hiding the risk of the Synthetic CDO from the bank's retail clients, with the objective of increasing the sale of the minibonds. Banks such as Shanghai Commercial bank / Wing Hang Bank /etc, rated the minibond as “Medium Risk”, considerably downplaying the product’s risk level, is another proof of banks’ faulty due diligence.
Why did the SFC Report fail to identify this?
10. What was the SFC Report’s conclusion on the banks minibond sales related training and procedures?
- (10.1) What was the understanding of banks staffs regarding all the risks listed in the SFC Report Section “16.4”? Did banks staff explain all these risks to their clients at the point of sale, other than credit-linked to 7 reference entities and no liquidity / long lockup period?
- (10.2) The SFC Report Section 2.3.1 stated “2.3.1 ..... Intermediaries were still under an obligation pursuant to the Code of Conduct to explain the nature and risks of the product they were selling and ensure it was suitable". Does SFC consider that the mentioning of “credit-linked to 7 reference entities and no liquidity / long lockup period” was sufficient for fulfilling such requirements?
- (10.3) The SFC Report Section 2.5.2 stated “2.5.2. The Code of Conduct also imposes obligation on intermediaries to ensure their staff are properly trained and supervised”. To what extent, was this demonstrated by SFC’s investigation?
- (10.4) How would SFC define banks / banks staff’s Honesty and Fairess, Care to their Clients? Should it be defined as:
"For a complex credit derivative product like minibond, the responsibility of Bank's staff is limited to: passing the Issuer Prospectus to the client when being requested, and telling clients with minimum information, even if the minimum information could be misrepresenting and misleading on true nature and risk of the product”?
Respectfully yours,
We are writing to you to express our questions and disagreements with the “SFC Lehman Brothers Minibonds Incident Report” (“the SFC Report”). We respectfully request that Legco Lehman Incidence Investigation Committee investigates questions below regarding Banks’ wrong-doing in conjunction with the sale of minibonds to retail investors, and moves towards proper compensation for minibond victims. We respectfully request that SFC addresses each question below to the Legco Committee and to the public.
The key issue with Minibond is not about if it declared “principal protected” or not. The key issue is about misrepresentation and omission of the true nature and risk of the so-called “Minibond”. Lehman bankruptcy only triggered an awakening call. It made the public and minibond holders realize that the true nature and risk of minibond was not being disclosed in the past few years.
It is not uncommon for banks to find all the possible loophole even lame excuse to hide the truth of minibond sales, in the name of the best interest of Hong Kong as Financial Center or in the name of the best interest of shareholders. The Government must try its best to protect the public's interest, especially when public does not have much legal way to challenge banks. A thorough investigation on the minibond sales will help to restore the tarnished trust in banks, and will be for the best interest of Hong Kong as a financial center in the long term.
Minibond
1. Minibond is “Secured collateral and Swap” per SFC summary.
- Most minibond collateral was AAA-rated securities. The AAA-rated securities waere mostly AAA-rated CDO/Synthetic CDO.
- Swap agreements included Credit Default Swap (CDS) with 5-7 well-known companies as reference entities.
- Most CDO collateral included CDS with 100-155 reference entities whose credit rating in the category of AAA to CCC. It was rated as AAA after enhancement and its average portfolio credit quality was usually at BBB/BBB. A CDO portfolio with 125 reference entities (Series #19 collateral), would lose 100% principal upon the 10th credit event in respect of reference entities.
Product Description and Disclosure
2. Definition of full disclosure by SFC:
(2.1) In the SFC Report Section “2.2. Regulatory Structure”, Section 2.2.1 stated “ …disclosure and suitability. The first of these is the responsibility of SFC - to ensure that, based on the information provided by the product issuer, sufficient information is disclosed in the product documentation by the issuer to enable a reasonable person to make an informed decision. “.
We assume that ‘a reasonable person’ here refers to persons who are not credit derivative product experts such as 黃元山，迷宗.
- As reported in news:“證監會行政總裁韋奕禮表示、證監會角色並非要監察投資產品價格是否穩定, 而是要確保所批核之投資產品, 有全面市場披露”.
(2.2) William Pearson of SFC said in 2005: “(…). We are seeing more complicated products come on to the scene, but I think as long as the disclosure is clear, accurate and not misleading, we will be happy to see that carry on”, in the Asian Structured Products Review 2005, (http://www.pacificprospect.com/downloads/asian_structured_products_review.pdf )
3. The SFC Report failed to point out that the prospectuses misled retail clients with the prominent “credit-linked to 7 reference entities”.
By choosing Synthetic CDO as minibond collateral, the prospectuses should have been fully aware that minibond’s value would be greatly decided by credit risk of its collateral’s portfolio holding. However, the prospectuses never clearly stated that minibond was in fact credit linked with “7 AND MANY Other” reference entities. The prospectuses failed to disclose where the risks truly lie.
Why did the SFC Report fail to find the prospectuses not meeting SFC’s “Clear, Accurate, No misleading” requirement?
4. The SFC Report Section 16.3.1 made biased observation on the prospectuses.
The SFC Report quoted the declaration of “not principal protected”. But the SFC Report failed to notice the following statements in the page 9 (of Series #27) of the Issue Prospectus:
"Are our Notes principal protected?
Our Notes are not principal protected: if a credit event happens to any one of the 7 reference entities before the maturity date, you will lose part, and possibly all, of your investment”.
Above statements effectively suggested that the “not principal protected” was conditioning on the credit event of 7 reference entities. Banks staff did not offer any other advise on such understanding.
What was the reason that the SFC Report did not identify above inaccurate and misleading statement?
Why were most (or all) banks staff having the similar misunderstanding on the condition of “not principal protected”?
5. The SFC Report Section 16.3.2 made biased observation on the prospectuses.
The SFC Report quoted “Our Notes are not suitable for everyone. (…). Before applying for any of our Notes, you should consider whether our Notes are suitable for you in light of your own financial circumstances and investment objectives. If you are in any doubt, get independent professional advice.” from the Prospectuses.
However, the SFC Report failed to notice the following statements in the page 10 of Issue Prospectus (Series #27):
“Who should buy our Notes? Are they suitable for everyone?
Our Notes are not suitable for everyone. (…).
Our Notes are only suitable for investors who are:
looking for fixed rate quarterly interest income (…),
confident that none of the 7 named reference entities will be affected by a credit event. (….)”.
Above statements in plain English clearly suggested (to retail clients) that, if you were confident on the 7 reference entities, the Notes was for you.
What was the reason that the SFC Report did not identify above misleading and inaccurate statements in the prospectuses?
6. A prospectus must disclose where the money would be invested into and where the interest and repayment of principal would be coming from. The SFC Report failed to identify that the Prospectuses never clearly disclosed such information. Why did the SFC Report consider the prospectuses disclosure as sufficient and acceptable?
The prospectuses only stated that “We use the money which you invest in our Notes to buy a package of assets.” (page 19, “What happens to my money? How can Pacific International Finance Limited pay me back?”).
The brand name of minibond and the term “credit linked to 7 reference entities” gave retail clients false illusion that the minibond money would be invested into debt/loans of 7 reference entities. The truth was that, the Minibond money was not invested into the 7 reference entities or any of the undisclosed 100+ reference entities that comprised of the minibond CDO collateral.
7. The SFC Report failed to identify that the prospectuses omitted CDO collateral related material information.
(7.1) Plenty of credit rating information on the 7 reference entities was disclosed. The prospectuses mentioned the AAA-rating on the CDO. But there was no mentioning on the credit rating information/or guideline on the reference entities that comprised of CDO collateral. The Prospectuses at least should be able to state clearly about credit linked to many other reference entities, and to disclose some guideline on the criteria for selection of the reference entities such as the expected number of reference entities and the expected percentage of reference entities below BBB/or BB /or B-/etc.
(7.2) The prospectuses at least should be able to disclose that a Synthetic CDO usually would experience 100% principal loss when 8% (or less) of the reference entities has default event. It does not need 10% or more of the reference entities to have default event for the 80%-100% principal loss.
The prospectuses did not provide “sufficient information” on minibond, and obviously were way off the “Clear, Accurate and non misleading, Disclosure (全面市場披露 )” requirements. We contend that the prospectuses consistently omitted material fact and gave misleading statement, so that a reasonable person would not be properly informed of the true nature and risk of minibond.
Why did the SFC Report consider the prospectuses disclosure as sufficient and meeting SFC requirements?
Code of Conduct at Point of Sale
The SFC Report Section 2.5 listed requirements on regulated body (banks) or HKMA/SFC registered staffs.
8. The SFC Report failed to identify that banks provided clients with incomplete material information.
The CDO collateral information held the most important material information on the Minibond. The diminished collateral value also proved the criticalness of such collateral information. The prospectuses were only part of minibond information. Detailed Information about the collateral, including evidence of the rating and the terms and conditions of the collateral, would have provided Minibond buyers with a 2nd chance to know what the Minibond was really comprised of.
Such collateral information was not available to minibond purchaser when they signed the purchase agreement. However, such collateral information usually would be made available prior to the issue date. Banks should have requested such information after offer closed. Banks should have sent such CDO collateral information documents /or notice of such documents’ availability to minibond purchasers. Banks are required to provide clients with relevant material information for derivative products, according to SFC’s Code of Conduct. But Banks failed to do so. Why was this not mentioned in the SFC Report?
9. The SFC Report failed to identify that Banks’ due diligence was insufficiently thorough over the past few years’ minibond sale. Evidence is as follows:
- Banks should have cautioned us that minibond was not invested into any debt / bonds issued by any of the 7 reference entities.
- Banks should have cautioned us that AAA-rated securities (or AAA-rated CDO), may not be the same as AAA-rated conventional bond, and should have cautioned us about the nature and risk related to CDO collateral. $10 million cash or cash equivalent is very different from $10 million worth of combined asset value of cash / stock /commercial real estate / residential real estate / machinery
- It was never mentioned to us what CDO was comprised of and what kind of risk CDO may have.
- It was never pointed out to us that the key asset of CDO collateral was CDS with many entities, and its value was decided by the credit risk or default event of its portfolio holding.
- It was never mentioned to us that a AAA-rated Synthetic CDO may have average portfolio credit quality at BBB/BBB-.
- We were never told to be aware that minibond was, in fact, not only credit linked with 7 reference entities, but also credit-linked with many other entities at various rating categories from AAA to CCC. A 8% (or less) default rate in the CDO collateral would result 100% principal loss.
- And, we were never explained about the First-To-Default with the 7 reference entities, nor the credit event redemption amount. Constellation is an example about how crucial to understand such terms prior to purchase.
We contend that, instead of exercising due diligence, Banks in fact collaborated, we would suggest fraudulently, with the minibond issuer, hiding the risk of the Synthetic CDO from the bank's retail clients, with the objective of increasing the sale of the minibonds. Banks such as Shanghai Commercial bank / Wing Hang Bank /etc, rated the minibond as “Medium Risk”, considerably downplaying the product’s risk level, is another proof of banks’ faulty due diligence.
Why did the SFC Report fail to identify this?
10. What was the SFC Report’s conclusion on the banks minibond sales related training and procedures?
- (10.1) What was the understanding of banks staffs regarding all the risks listed in the SFC Report Section “16.4”? Did banks staff explain all these risks to their clients at the point of sale, other than credit-linked to 7 reference entities and no liquidity / long lockup period?
- (10.2) The SFC Report Section 2.3.1 stated “2.3.1 ..... Intermediaries were still under an obligation pursuant to the Code of Conduct to explain the nature and risks of the product they were selling and ensure it was suitable". Does SFC consider that the mentioning of “credit-linked to 7 reference entities and no liquidity / long lockup period” was sufficient for fulfilling such requirements?
- (10.3) The SFC Report Section 2.5.2 stated “2.5.2. The Code of Conduct also imposes obligation on intermediaries to ensure their staff are properly trained and supervised”. To what extent, was this demonstrated by SFC’s investigation?
- (10.4) How would SFC define banks / banks staff’s Honesty and Fairess, Care to their Clients? Should it be defined as:
"For a complex credit derivative product like minibond, the responsibility of Bank's staff is limited to: passing the Issuer Prospectus to the client when being requested, and telling clients with minimum information, even if the minimum information could be misrepresenting and misleading on true nature and risk of the product”?
Respectfully yours,
2009年3月3日 星期二
恒生因唔 明 白CDO, 就 唔 做CDO, 避過次按災難
1. 標題: 恒生因「無知」避過次按災難 股價遠遠跑贏「阿媽」 (2007-12)
數 今 年 金 融 圈 最 大 鑊 新 聞 ， 莫 過 於 次 按 問 題 ， 咪 以 為 呢 單 係 美 國 ， 你 睇 獅 子 銀 行 股 價 就 知 。 尤 其 上 個 月 仲 宣 佈 ， 將 兩 家 SIV 公 司 上 身 ， 獅 子 銀 行 股 價 即 時 大 跌 。 華 華 當 然 好 留 意 控 （ 005 ） 旗 下 生 銀 行 （ 011 ） 有 冇 俾 次 按 拖 累 。
曾 遇 巨 大 壓 力
噚 日 同 生 副 董 事 長 兼 行 政 總 裁 柯 清 輝 傾 開 ， 華 華 問 ： 「 生 有 冇 受 次 按 影 響 ？ 」 柯 大 俠 並 唔 似 得 渣 打 銀 行 大 中 華 及 日 本 區 環 球 市 場 主 管 彭 智 樂 （ Patrick Gillot ） 咁 大 聲 話 ： 「 次 按 對 集 團 零 影 響 。 」 柯 大 俠 答 案 係 ─ ─ 「 影 響 一 定 有 ， 因 為 信 貸 市 場 缺 水 ， 都 會 影 響 生 住 票 據 價 值 。 不 過 ， 集 團 次 按 『 零 exposure 』 。 」 意 思 係 ， 生 冇 投 資 落 次 按 生 意 。
就 正 如 當 年 科 網 熱 咁 ， 見 到 其 他 公 司 係 咁 易 過 網 站 出 ， 話 涉 足 科 網 界 ， 股 價 都 聲 升 ， 你 做 上 市 公 司 主 席 拒 絕 搞 網 ， 睇 壓 力 幾 大 。 前 幾 年 ， 美 國 樓 市 大 旺 ， 明 知 做 次 按 風 險 高 ， 但 有 錢 賺 喎 ， 梗 做 啦 ， 當 個 個 都 做 ， 連 遠 到 祖 國 大 陸 中 國 銀 行 （ 3988 ） 都 投 資 次 按 資 產 ， 生 當 然 有 壓 力 。
柯 大 俠 話 ： 「 曾 經 有 段 時 候 壓 力 真 係 好 大 ， 當 時 我 特 登 額 外 撥 一 筆 備 用 資 金 畀 Treasury 部 門 。 」 華 華 以 為 ， 最 怕 上 頭 唔 批 錢 ， 點 知 Treasury 部 門 居 然 唔 知 點 算 ， 「 Treasury 部 門 阿 頭 當 時 搵 投 資 銀 行 ， 想 睇 CDO （ 債 務 抵 押 證 券 ） 下 面 資 產 係 乜 ， 但 解 唔 明 ， 咁 唔 明 白 最 後 就 唔 做 。 」
故 事 講 到 呢 度 ， 你 明 點 解 生 次 按 零 exposure ， 亦 因 為 咁 執 番 身 彩 。 市 場 一 向 認 為 生 保 守 ， 但 華 華 覺 得 「 保 守 」 其 實 係 「 穩 建 」 ， 值 得 學 習 ！蘋果日報 李華華
2. 睇唔明次按文件 恒生避一劫 (2007-12-6)
2007年最大的國際金融新聞恐怕非次按莫屬，香港最大銀行匯豐控股(0005)近月來股價一直疲不能興，正係因為受到次按拖累。作為匯豐附屬機構恒生銀行(0011)卻成功避開次揭衝擊，股價近日已遠遠跑贏「阿媽」。昨日收市時，更創下了歷來最高收市價，達到158.8元，比前日上升了9.2元或6.2％，恒生的總市值亦因而猛漲至2860億元，成績十分驕人。
知情者透露，恒生大班柯清輝加入恒生後，曾經買入了不少恒生股份，如今即使唔計期間的股息收入，帳面亦應有巨額利潤了。
昨日柯大俠宴請傳媒時透露，有一段時間由於全球利息低迷，該行也曾差被迫要投資於次按。佢話，當時由於利息低，該行的財資部(treasury)面對很大壓力去投資息口較高的次按，以期為銀行賺取更高的回報，因為當時差唔多所有大銀行都有投資呢工具，於是佢地高層壓力下曾經批准了財資部購買次按的上限。
恒生財資部收到order後，自然要照辦，包括向投資銀行了解次按的詳情，但點知財資業務部主管張泰強睇完之後，睇唔清楚究竟呢投資工具背後的資產係乜東東，於是向投資銀行查詢，但對方點講都講唔清楚，只知呢工具有好高的信貸評級。
就係因為「唔明白」，令恒生冇「落注」，逃過「一劫」，如今股價可以遠遠跑贏「阿媽」。明報
數 今 年 金 融 圈 最 大 鑊 新 聞 ， 莫 過 於 次 按 問 題 ， 咪 以 為 呢 單 係 美 國 ， 你 睇 獅 子 銀 行 股 價 就 知 。 尤 其 上 個 月 仲 宣 佈 ， 將 兩 家 SIV 公 司 上 身 ， 獅 子 銀 行 股 價 即 時 大 跌 。 華 華 當 然 好 留 意 控 （ 005 ） 旗 下 生 銀 行 （ 011 ） 有 冇 俾 次 按 拖 累 。
曾 遇 巨 大 壓 力
噚 日 同 生 副 董 事 長 兼 行 政 總 裁 柯 清 輝 傾 開 ， 華 華 問 ： 「 生 有 冇 受 次 按 影 響 ？ 」 柯 大 俠 並 唔 似 得 渣 打 銀 行 大 中 華 及 日 本 區 環 球 市 場 主 管 彭 智 樂 （ Patrick Gillot ） 咁 大 聲 話 ： 「 次 按 對 集 團 零 影 響 。 」 柯 大 俠 答 案 係 ─ ─ 「 影 響 一 定 有 ， 因 為 信 貸 市 場 缺 水 ， 都 會 影 響 生 住 票 據 價 值 。 不 過 ， 集 團 次 按 『 零 exposure 』 。 」 意 思 係 ， 生 冇 投 資 落 次 按 生 意 。
就 正 如 當 年 科 網 熱 咁 ， 見 到 其 他 公 司 係 咁 易 過 網 站 出 ， 話 涉 足 科 網 界 ， 股 價 都 聲 升 ， 你 做 上 市 公 司 主 席 拒 絕 搞 網 ， 睇 壓 力 幾 大 。 前 幾 年 ， 美 國 樓 市 大 旺 ， 明 知 做 次 按 風 險 高 ， 但 有 錢 賺 喎 ， 梗 做 啦 ， 當 個 個 都 做 ， 連 遠 到 祖 國 大 陸 中 國 銀 行 （ 3988 ） 都 投 資 次 按 資 產 ， 生 當 然 有 壓 力 。
柯 大 俠 話 ： 「 曾 經 有 段 時 候 壓 力 真 係 好 大 ， 當 時 我 特 登 額 外 撥 一 筆 備 用 資 金 畀 Treasury 部 門 。 」 華 華 以 為 ， 最 怕 上 頭 唔 批 錢 ， 點 知 Treasury 部 門 居 然 唔 知 點 算 ， 「 Treasury 部 門 阿 頭 當 時 搵 投 資 銀 行 ， 想 睇 CDO （ 債 務 抵 押 證 券 ） 下 面 資 產 係 乜 ， 但 解 唔 明 ， 咁 唔 明 白 最 後 就 唔 做 。 」
故 事 講 到 呢 度 ， 你 明 點 解 生 次 按 零 exposure ， 亦 因 為 咁 執 番 身 彩 。 市 場 一 向 認 為 生 保 守 ， 但 華 華 覺 得 「 保 守 」 其 實 係 「 穩 建 」 ， 值 得 學 習 ！蘋果日報 李華華
2. 睇唔明次按文件 恒生避一劫 (2007-12-6)
2007年最大的國際金融新聞恐怕非次按莫屬，香港最大銀行匯豐控股(0005)近月來股價一直疲不能興，正係因為受到次按拖累。作為匯豐附屬機構恒生銀行(0011)卻成功避開次揭衝擊，股價近日已遠遠跑贏「阿媽」。昨日收市時，更創下了歷來最高收市價，達到158.8元，比前日上升了9.2元或6.2％，恒生的總市值亦因而猛漲至2860億元，成績十分驕人。
知情者透露，恒生大班柯清輝加入恒生後，曾經買入了不少恒生股份，如今即使唔計期間的股息收入，帳面亦應有巨額利潤了。
昨日柯大俠宴請傳媒時透露，有一段時間由於全球利息低迷，該行也曾差被迫要投資於次按。佢話，當時由於利息低，該行的財資部(treasury)面對很大壓力去投資息口較高的次按，以期為銀行賺取更高的回報，因為當時差唔多所有大銀行都有投資呢工具，於是佢地高層壓力下曾經批准了財資部購買次按的上限。
恒生財資部收到order後，自然要照辦，包括向投資銀行了解次按的詳情，但點知財資業務部主管張泰強睇完之後，睇唔清楚究竟呢投資工具背後的資產係乜東東，於是向投資銀行查詢，但對方點講都講唔清楚，只知呢工具有好高的信貸評級。
就係因為「唔明白」，令恒生冇「落注」，逃過「一劫」，如今股價可以遠遠跑贏「阿媽」。明報
訂閱：
文章 (Atom)
