Standard Chartered's HK Unit To Pay HK$1.48 Bln To Buyers Of Lehman-Linked Products

HONG KONG (Dow Jones)--The Hong Kong banking unit of Standard Chartered PLC (2888.HK) will pay about HK$1.48 billion to many of its customers who had bought a Lehman Brothers-linked structured derivatives product, Hong Kong regulators said Tuesday.

The agreement between Standard Chartered Bank (Hong Kong) Ltd. and the Securities and Futures Commission and Hong Kong Monetary Authority underscores the territory's regulators' efforts to improve oversight of the sale of complex structured products after Lehman Brothers collapsed in 2008, wiping out investments made by many buyers of products linked to the U.S. bank.

Under the agreement, Standard Chartered's Hong Kong unit will repurchase 95% of the outstanding transactions of Lehman Brothers-related equity linked structured notes.

The bank's Hong Kong unit hasn't admitted to any liability as part of the resolution.

"(Financial) intermediaries have an obligation to ensure suitability when making a recommendation or advising on securities," Securities and Futures Commission Chief Executive Martin Wheatley said in a statement.

-By Fiona Law, Dow Jones Newswires; 852-2802-7002; fiona.law@dowjones.com