Last Updated on 7, April 2014
This is a work of fiction. Any resemblance to persons fictional or real who are living, dead or undead is purely coincidental.
MORE Singaporeans are being led by their unscrupulous Trapped Commoditized Advisers to buy and sell commodity rapidity in a bid to withdraw cash from their Guaranteed Pension Fund (GPF).
GPF is a source of low cost capital to help finance the city’s state investments. Many Singaporeans invest in the GPF because it is required by Circulars issued by the Ultimate Bureaucrat.
The practice has led to the Ultimate Bureaucrat issuing more Warning Circulars to 35 Trapped Commoditized Advisers and seven of them have seen been advised to change to another career.
It is understood that some of these Trapped Commoditized Advisers also work together with Stingrays to target hard-up Singaporeans who are desperate to liquidate their GPF for quick cash. Stingrays are those that have the artistic tendency to spray “O$P$” on walls.
The practice, which is known in the industry as ‘churning’, is being targeted at lower-income GPF members who are hard-up for cash.
This is how it works:
The GPF member is asked by the Trapped Commoditized Advisers to sign blank transaction forms which authorize them to invest the client’s GPF savings on his or her behalf.
The adviser then invests the savings in GPF-approved commodities earning a commission of between 2 and 3 per cent which is deducted from the principal amount invested.
Part of this sales charge is then given back to the GPF member in the form of a 'cash rebate'. The GPF member is happy because he gets the cash he needs, and the Trapped Commoditized Adviser also pockets part of the fee.
A couple of weeks later, the Trapped Commoditized Advisers liquidates all the investments and re-invests the money in a new set of commodities, yielding a fresh round of commissions and cash rebates.
According to sources, the frequency of churning per account can range from twice a month to three times every two months.
It is also understood that some are colluding with Stingrays to reach out to more clients.
Industry sources say that there are a few hundred rogue Trapped Commoditized Advisers doing this. They work in several Bureaucrats and perform thousands of transactions monthly.
The culprits typically reach out to their 'clients' via newspaper advertisements and flyers promising quick money. They target average and low income earners like taxi drivers and dispatch riders who are happy to pocket cash rebates as low as $50 a month.
When contacted, the Ultimate Bureaucrat (UB) said that while it is generally satisfied that most major Bureaucrats take the issue of churning seriously, it is concerned about a small number who appear to be engaging in this activity to the detriment of their customers.
The UB warned that under the Circular #3219982-XXQ-555-19271, Trapped Commoditized Advisers are prohibited from making recommendations to clients to switch between designated investment products in a manner that would be detrimental to the interest of the client.
It added that penalties include the imposition of Circulars to restrict activities of the errant Bureaucrat, issuing prohibition Circulars or revocation of Dog Tags (which have to be carried by the collars of these dogs, opps I mean Advisers) .
The GPF Board said that it is also illegal for GPF members to pocket cash rebates from their GPF investments. Under the rulebook Chapter 338-11111-999993, all gains or rebates from GPF investments need to be credited back to members' GPF accounts.
To address the churning issue, the GPF Board said that it is working together with other Bureaucrats to issue more Circulars.
Disciplinary actions meted to advisers include the Circulars to clawing back of commissions and Circulars instructing them to have a holiday (oopps I mean stop working) and changing their career.
But the president of the Bureaucrats noted that it is an uphill battle investigating such activities. “The masterminds of such churning activities often hide behind the identity of other Trapped Commoditized Advisers by submitting forms signed by other Trapped Commoditized Advisers.”
Although not identical, these masterminds seem to have learned a similar trick from the Ultimate Bureaucrats who also hide anonymously behind Circulars which nobody reads or understands.
He said that two solutions to the issue would be to mandate that there be no sales charge for GPF investments, or to require the payment of the sales charge by cash instead of GPF funds.
When contacted, Mr. Wilfred Ling, the President of the Association of the ¼ Trapped Commoditized Advisers supports the idea of imposing 0% sales charge.
“After all, these Commoditized Advisers are offering no value to their clients. Imposing a market value of 0% is only narrowing the spread between the fair value and market value. Otherwise, these rogue advisers are permitted a risk-free return by arbitrating this large spread. This is not fair to other market players,” said Mr. Ling.
“By the way, these rogue advisers can setup a hedge fund as good as Madoff Guaranteed Ponzi Hedge Fund Classic since they are able to exploit this arbitrage opportunities for so many years with the UB only issuing Circulars. I heard that the Stingray Lorong 3 Pte Ltd located at Underground World #666 is setting up the Next Big Golden Eagle Ponzi Fund and is keen in recruiting these advisers because of their arbitrage skills. I heard it will be offered to Accredited Investors under the Singapore Restricted Scheme,” he continues.
In the meantime, the Ultimate Bureaucrats is said to be preparing a book entitled “How to become a better Career Coach” in response to public encouragement that the UB seems to be better in Career Coaching as evidenced by its good advice in getting churners to switch careers.
(If this article suddenly disappears, it means that the Ultimate Bureaucrat has issued a Warning Circular to the author. He would have to take this article down since he wears a Dog Tag)
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