THERE are obvious lessons to be learnt from the Lehman Minibond Notes case, even as the debacle is yielding some consolation for several thousand investors who will recover part of their money. The Monetary Authority of Singapore (MAS) has welcomed the receivers' announcement of a payout. Based on the value of underlying collateral liquidated, the distribution ranging from 21.5 per cent to 70.8 per cent of the principal is as fair a settlement as any that could be determined in the circumstances. It is not yet, however, a case of all's well that ends well. Those who lost most of their life savings can be expected to fight on. Legal recourse remains an option.

This has been a dispiriting and a costly experience. More important than salvaging residual value from complete loss, however, is mending the damage done to trust in financial markets and the standing of financial institutions' sales staff. Further steps need to be taken to improve investor education and awareness. MAS is putting the onus on banks to check if customers have the financial knowledge and experience before selling them structured notes as well as unit trusts and investment-linked insurance products. It wants firms to train sales staff and require them to pass a product knowledge test before assigning them complex investments to sell. It is proposing that product highlight pages spell out key features and risks.

These measures will address some obvious deficiencies that set the stage for the Minibond and similar fiascos in the financial meltdown of 2008. These concerned mis-selling or over-selling of products to retirees and others who were unfamiliar with them or had little appetite for risk. Instead of resorting to a thorough regulatory overhaul, MAS is focusing sharply on weaknesses relating to the level of investor sophistication. In doing so, it obviously recognises that the balance should not be tipped so onerously against financial institutions as to harm product innovation or normal business flow.

Nevertheless, the requirements, to be backed by enhanced civil penalties against false or misleading advertisements or marketing statements, will help in protecting customers. Investors, however, will again court disaster if they think regulation will offer them all the protection they need. It would not. To help them assess risk, they should seek independent expert advice. In the final analysis, 'buyer beware' is still the caution to heed. No rules can safeguard their money if they do not do due diligence. Neither buyers nor sellers should henceforth plead or feign ignorance.