Archive for January, 2010
New HDB rule to protect new flat owners
Posted by: admin in Real Estate on January 14th, 2010
From 1 Feb this year, flat owners who sublet rooms in their HDB flats will have to register with HDB within 7 days of doing so.
For tenancies beginning before 1 Feb, owners have a six-month grace period from that date to register.
Owners also have to inform HDB when they renew or terminate the subletting of rooms and when there are changes to tenants’ particulars.
There is no need to seek prior approval for the subletting of rooms.
HDB announced this yesterday in support of the efforts of the Ministry of Home Affairs to stamp out loan shark activities.
It hopes the move will help to address the problem of new flat occupiers being harassed by loan sharks while the borrowers are untraceable.
The additional information will enable MHA to trace such borrowers.
Flat owners can register their sub-letting of rooms online or at HDB branch offices.
A maximum penalty of $3,000 will be imposed for non-compliance.
Flat owners who repeatedly fail to comply with the new regulation may have their flat acquired by HDB.
Source: TNP 13th January 2010
CPF warns: Stiff fines for rebate scams
Posted by: admin in General, Unit Trust on January 2nd, 2010
By Lorna Tan, Senior Correspondent
CENTRAL Provident Fund members have been warned they face fines of up to $10,000 if they take part in a scam that has just come to light.
The CPF Board issued the stern warning after a report in The Straits Times yesterday exposing a practice adopted by unscrupulous financial advisers who plunder members’ CPF investment funds.
Some CPF members who are desperate for fast cash have agreed to take part in the scam, which involves the rapid buying and selling - or ‘churning’ - of investment products using CPF money.
The members dip into their retirement savings to buy and sell investment products under the CPF Investment Scheme - and in doing so they become eligible for cash rebates used as a carrot by errant financial advisers.
The advisers get to pocket healthy commissions.
CPF rules prohibit members from pocketing such cash rebates. All gains or rebates from CPF investments must be put back into members’ CPF accounts, to ensure they have enough for their golden years.
A CPF Board spokesman said: ‘CPF members found guilty of working with errant financial advisers to pocket cash rebates which amount to premature withdrawals of CPF monies may be fined up to $2,500. For second or subsequent convictions, the fine may be up to $10,000.’
The scam typically involves frequent buying and selling of unit trusts and investment-linked insurance policies for no good reason. In the process, the customer gets hit with charges while the financial adviser pockets extra commissions. Over an extended period of churning activity, the customer suffers as the savings in his CPF account - used for the transactions - inevitably dwindle, particularly in a falling or flat market.
Advisers typically entice CPF members to ‘churn’ by investing their retirement funds in return for monthly cash rebates. In most cases, CPF members are given blank forms to sign, authorising the advisers to transact these products on their behalf.
The cash rebates come from the sales charges tied to each transaction. The sales charge works out to 2 per cent to 3 per cent of the sum invested, of which the customer receives a cut. The balance is pocketed by the adviser, a person who may have introduced the member to the adviser, and the investment firm.
Singapore Insurance Institute council member, Mr Stanley Jeremiah, urged CPF members to be more careful about safeguarding their retirement funds.
‘People should be aware that by participating in churning they are cheating themselves because they are dissipating their retirement funds and committing a criminal offence,’ he said.
Mr Jeremiah said that even if a CPF member wants to take a chance, he would be making a big mistake because if he is caught, the penalties would be bigger than most of the cash rebates. With continued churning, the fines can be very substantial.
This article was first published in The Straits Times.
Source: AsiaOne Business
Unit Trust fees SLASHED!
Posted by: admin in Unit Trust on January 2nd, 2010
DBS, Fundsupermart among those which now charge just 1%
A PRICE war seems to have broken out in the unit trust industry in Singapore, with at least three fund distributors now slashing their sales charges to just 1 per cent.
DBS Bank started the ball rolling in early October when it cut its sales charge on all unit trusts to 1 per cent - a move the bank says has already resulted in a two-fold increase in unit trust sales.
Last Tuesday, online fund distributor Fundsupermart.com reduced its sales charge for its 11 best performing funds over a period of three years to 1 per cent.
And The Straits Times has learnt that even though it has not advertised this, Standard Chartered Bank (Stanchart) is also offering a 1 per cent sales charge to selected customers quietly.
Unit trusts are typically sold by banks, insurers, stockbrokers and other independent financial advisers.
These distributors levy an upfront sales charge, which is deducted straightaway from the principal amount an investor puts into a unit trust.
Read the full story in Saturday’s edition of The Straits Times @ Dec 19, 2009
By Sylvia Paik