Singapore’s central bank has banned some of the city-state’s biggest financial institutions from selling structured notes after they improperly marketed US$367 million of the bonds that were linked to Lehman Brothers Holdings Inc.
The 10 banks and brokerages can’t sell structured notes for between six months and two years, the Monetary Authority of Singapore said in a statement late on Tuesday.
The 10 banned financial institutions are: DBS Group, UOB Kay Hian, OCBC Securities, ABN AMRO’s Singapore branch, Maybank Singapore, CIMB-GK Securities, Hong Leong Finance, DMG Partners, Phillip Securities and Kim Eng Securities.
The central bank said some of the institutions assigned risk ratings that were inconsistent with warnings stated in the prospectus for the notes, and salespeople were ill trained to sell the notes.
The Lehman collapse last fall led to a default on the dividend payment of some of the bonds, most of which had a maturity of five to seven years and a yield of about 5 percent.
About 10,000 investors bought S$520 million (US$367 million) of the notes, and financial institutions have compensated about 4,000 of them, the central bank said.
Similar structured notes were sold in Hong Kong, Taiwan and Indonesia.
Meanwhile, the opening of Singapore’s first casino has been put back several months because of shortages of labor and materials, the chairman of developer Las Vegas Sands said yesterday.
Sheldon Adelson said Marina Bay Sands would open early next year for its initial phase, after being originally due to welcome its first visitors by the end of this year.
“The opening date we seriously anticipate will be in January or February,” Adelson said at a ceremony marking the finishing of construction of the development’s three 55-story hotel towers.
“We can’t control the flow of sand to make concrete with, we can’t control the availability of steel ... and we can’t control the availability of labor due to other projects that are in the market,” he said.
Adelson yesterday put the total cost of the development at S$8 billion.