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Source:
www.mas.gov.sg |
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Opening Remarks by Mr Heng Swee
Keat, Managing Director MAS, at the Launch of the Financial Industry
Disputes Resolution Centre (FIDReC), 31 August 2005 |
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An Excerpt |
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Hitherto, disputes relating to banking
matters have been dealt with by the Consumer Mediation Unit (CMU) while
those relating to insurance are handled by the Insurance Dispute
Resolution Organisation (IDRO). These schemes have worked well. |
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However, we are now witnessing the launch of
more new financial products that cut across traditional boundaries of
banking, insurance and capital markets. |
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In addition, as we step up our efforts to
encourage greater participation in financial market, more retail
investors will enter the market. |
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To keep up the confidence of investors,
apart from a greater focus on investors' education, we need to provide a
simple and cost-efficient way to handle disputes. |
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I am therefore pleased that the industry has
come together to create FIDReC, by merging the Consumer Mediation Unit
(CMU) and the Insurance Dispute Resolution Organisation (IDRO). Capital
markets disputes will also, for the first time, be brought under a
dispute resolution scheme. |
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MAS fully supports this initiative, and has
provided funding for the set-up cost from the Financial Sector
Development Fund. The recurrent cost will be borne by the industry, in
proportion to the usage of the resources of the scheme. |
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FIDReC's governance structure, membership
and terms of reference were finalized after public consultation. FIDReC
will be governed by a Board of 7 Directors, of whom one each will be
from the banking, insurance and capital market sectors. |
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FIDReC will be chaired by a very eminent and
public-spirited individual, Mr Goh Joon Seng, former Chairman of CMU and
IDRO, and a former Supreme Court Judge. |
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FIDReC will use mediation as the main way of
resolving disputes. Mediation involves having an impartial third party
to resolve the disputes in an amicable, consultative way. |
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Statistics from CMU and IDRO show that about
95% of disputes are resolved through mediation. If mediation fails, the
dispute then enters into adjudication. |
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FIDReC has 3 important features to enable it
to serve as an effective dispute resolution body. |
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First, by handling all disputes that relate
to forms of financial transactions, it provides consumers the
convenience of a one-stop centre. |
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Second, FIDReC is staffed with independent
professionals including former judges, lawyers and industry
professionals who understand the business practices and nature of
products in the financial industry. |
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Third, FIDReC is affordable. To ensure easy
access, mediation services will be free. If current trend continues, it
means that 95% of all cases handled by FIDReC will be free. Should
adjudication be needed, consumers will pay just $50. |
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The setting up of FIDReC is a strong signal
of the industry's commitment to enhance fair dealing with its customers
and raise the standard of professionalism. |
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As of today, more than 380 financial
institutions have subscribed to FIDReC. |
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Source:
www.mas.gov.sg Press Release 31 Aug
2005 |
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Financial Industry Disputes Resolution Centre launched
