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Product Due Diligence And The Suitability Of Minibonds: Taking The Benefit Of Hindsight, Christopher Chao-Hung Chen
Product Due Diligence And The Suitability Of Minibonds: Taking The Benefit Of Hindsight, Christopher Chao-Hung Chen
Christopher Chao-hung Chen
This article focuses on some problems arising from applying the product due diligence requirement of the suitability rule to complex financial products. The article draws several conclusions. First, the ‘not unsuitable’ test should be adopted to reduce legal uncertainty. Second, the comparative risk approach is a better choice in assessing the suitability of investment products. However, there must be further elaboration of the classification of product risk. Third, there must be a balance between risk and return to avoid risk mismatches in product design. Fourth, what have been termed minibonds raise the problem of documentation suitability. Though it is difficult …
Contractual Structure Of Structured Notes And Legal Characterisation Of Non-Discretionary Trust, Christopher Chao-Hung Chen
Contractual Structure Of Structured Notes And Legal Characterisation Of Non-Discretionary Trust, Christopher Chao-Hung Chen
Christopher Chao-hung Chen
This article argues that if a structured product is documented as “notes”, it should be deemed as “securities” under the Securities Exchange Act in Taiwan. It should be regulated issuance, purchase or brokerage activities under securities regulations, if a structured note is issued directly in Taiwan or if a domestic investor authorized a securities broker to have it purchased in a foreign country on his behalf,. In addition, even if one invests in structured notes issued by a foreign company via a non-discretionary trust with a commercial bank, this activity should still constitute sales of foreign securities; and thus it …