Gabriel has correctly identified a gap in Singapore's laws.
"I would like the authorities to explain the regulatory framework governing all forms of investments where money is collected from Singaporeans and invested overseas.
We have solid regulations governing finance firms, financial advisers, securities, futures, fund management and so on.
Yet we have heard of how many Singaporeans have lost money investing in overseas properties sold in Singapore.
We have strong regulations governing financial advisers who want to sell even $1,000 of unit trust investments. Do we have the same for companies set up here to collect money from Singaporeans for investments in their own country?"
In general, you can be quite confident that in Singapore, your insurance agent or financial adviser holds the proper licence to do his job. Also, banks and insurance companies all have to get a MAS licence, before they can do business here.
And if you buy land or property in Singapore, government bodies such as the HDB, the URA, the BCA and the Singapore Land Authority all do their part to ensure that the system is reasonably reliable.
But some other types of investments fly almost completely under the regulatory radar.
I have personally come across two examples. The first is fine wines. The second is foreign land. I'll just discuss the latter.
I once received a call from a telemarketer. She invited my wife and I to high tea at a 5-star hotel. She also promised that in return for our attendance, we would be given $100 worth of shopping vouchers (I think it was Tangs or Metro) .
The requirement? We had to sit through a 60-minute presentation. No obligation to buy anything. But we had to sit and listen for a full hour.
My wife and I attended. The conference hall was crowded, filled with many Singaporeans like ourselves. As we enjoyed our high tea, a lady came to our table and did her presentation. She carried a laptop, ran a Powerpoint slide show and discussed various brochures, maps and legal documents with us.
It was all about investing in a certain big, empty piece of land in the United Kingdom.
You didn't have to be super rich to participate either. The entry level was not high. Here's how the investment scheme worked.
The land in question was neatly divided into thousands of parcels (think of a grid of many, many small squares, superimposed on a big map). You could choose the specific parcels of land you wanted to buy.
Suppose the average price of one parcel was $5,000. If you wanted to invest just $5,000, you would buy just one parcel of land. If you wanted to invest $10,000, you would buy two parcels. And if you were very rich, you could plonk down. say, $5 million and buy 1,000 parcels of the land.
You could buy as many or as few parcels as you wanted.
I was told that the company was marketing this scheme to people in Singapore, Malaysia and Taiwan. The whole idea of the exercise was to round up enough Asians to collectively pool their money and buy the entire piece of land. One fine day (and it could be many years later) the company would help them to sell the land for a good price, and each investor would then get his or her share of the profit.
I didn't invest any of my money.
I did ask lots of questions. My wife and I are both lawyers, and we found it interesting trying to work out the legal structure. The sales lady couldn't answer some of our questions, but she did get her boss to come and explain. He was a European businessman (a Finn, I believe), sophisticated and knowledgeable, and he gave reasonably good, clear answers.
Anyway, in the end, while we understood the legal structure, we felt that we didn't understand the market risks well enough. (I personally know nothing about land anywhere except in Singapore).
So we finished our coffee and snacks, and said, "Thank you, we will not be investing in this. Now can we have our free shopping vouchers?". We duly collected our free $100 shopping vouchers and left.
I should add that at this event, there was no hard sell. Right from the start, they had said that they would not use any unscrupulous tactics to pressure us to buy, and this was true - there were no unscrupulous tactics.
Nevertheless, the incongruity is undeniable.
You can't sell a $5,000 unit trust investment to an uneducated grandmother in Singapore, unless you hold the necessary licence and comply with all the MAS rules and regulations. The licence, and the rules and regulations, are to help safeguard the grandmother's interests.
But you can sell the same grandmother a $5,000 parcel of land, situated in a country far, far away, under a complex collective land ownership scheme. You don't need any licence. Nor does the Singapore government seem to know or care whether the land really exists; or what you tell or do not tell the grandmother; or what documents you ask her to sign.
Some potential for a disaster there. Right?