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Bloomberg says the Monetary Authority of Singapore has lifted a ban on the sale of structured notes for DBS Bank and the Singapore branches of Malayan Banking Bhd. and the Royal Bank of Scotland Group Plc effective tomorrow.
The three lenders put in place measures to strengthen their internal processes and procedures for offering financial advisory services across all investment products, according to a statement from the central bank today.
The three lenders put in place measures to strengthen their internal processes and procedures for offering financial advisory services across all investment products, according to a statement from the central bank today.
DBS and Royal Bank were among 10 financial institutions in Singapore that were banned in July from selling structured notes following claims by investors that they were misled on products tied to Lehman Brothers Holdings Inc.
The ban, which ranged from six months to two years, will only be lifted after the central bank is “satisfied” the institutions have taken steps to improve their processes for offering financial advisory services, the regulator said in July.
DBS has assured the regulator it won’t sell structured notes to retail customers across the region until it has put in place better measures and sales processes in all its key markets, the central bank said in its statement today.
The Singapore branches of ABN Amro Holding NV, DBS, Maybank, DMG & Partners Securities Pte and UOB Kay Hian Pte were the five banks that got the six-months ban. Maybank is Malaysia’s biggest lender, while UOB Kay Hian is a unit of Singapore’s United Overseas Bank Ltd. DMG and UOB Kay Hian have asked for additional time, the central bank said.
PAYOUT
The central bank said last week that investors who held Lehman-backed products, known as “minibonds,” can expect payouts ranging from 21.5% to 70.8%. This will be on top of any compensation they may have already received from the financial institutions that sold them the investments.
Singapore’s banks have offered to compensate about $105 million to more than 3,600 people who complained about the sales. Investors bought $508 million of Lehman-linked structured notes that lost most or all of their value when the firm, once the No. 4 U.S. securities company, filed in September 2008 for the largest bankruptcy in U.S. corporate history.
Hong Leong Finance, based in Singapore, decided to stop selling structured notes following the ban, according to the central bank.
