Hong Kong depositors have more protection against the mis-selling of investment products under new rules to tighten banks' sales practices following the Lehman Brothers Holdings minibond scandal, but they have to spend more time to buy an investment product from the lenders.
From yesterday, retail banks are required to physically separate retail investment activity from ordinary banking business transactions at branches.
The rules ban bank tellers from selling investment products over the counter to avoid misconceptions that the investments are simply an alternative to time deposits.
Since July, banks have also been required to keep audio recordings of sales conversations with customers.
Most banks have signs differentiating their general banking area, where customers deposit or withdraw money, from their investment zones.
Banks have to conduct a suitability test on investors before any sale can proceed, even though the sale process for the yuan-bond launched by the Ministry of Finance has been simplified, compared with other investment products.
