Market regulator Singapore Exchange Regulation (SGX RegCo) has banned UOB Kay Hian from undertaking new mandates to act as an issue manager or full sponsor for SGX Mainboard and Catalist initial public offering (IPO) and reverse takeover (RTO) submissions for the time being.
The ban does not include any existing IPO and RTO submissions which UOB Kay Hian agreed to act as issue manager or full sponsor before Aug 31.
There was no stop date specified by the SGX RegCo.
In addition, UOB Kay Hian will be “subject to certain requirements” imposed by SGX RegCo in respect of its introducing activities as a full sponsor.
Finally, the brokerage has to “satisfactorily” address and fulfil all “recommendations, conditions, and directions” that SGX RegCo has imposed on UOB Kay Hian.
Failure to comply with the regulations will result in potential disciplinary action, says SGX RegCo on Dec 27.
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The market regulator’s announcement comes after the Monetary Authority of Singapore (MAS) imposed a $375,000 “composition penalty” on UOB Kay Hian Private Limited (UOBKH) on Aug 31.
The brokerage was said to have failed to comply with business conduct requirements under the Securities and Futures (Licensing and Conduct of Business) Regulations and anti-money laundering and countering the financing of terrorism requirements under MAS Notice SFA04-N02. UOB Kay Hian has since paid the penalty in full.
According to MAS, UOB Kay Hian failed to “implement adequate controls for its corporate finance (CF) business and failed to ensure that its CF business was subject to internal audit” between September 2012 and June 2018.
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The brokerage also breached MAS’s anti-money laundering and countering the financing of terrorism requirements due to a “a result of material lapses in its control processes” between December 2016 and August 2017.
At the time, MAS said, “UOB Kay Hian’s breaches of anti-money laundering and countering the financing of terrorism requirements exposed it to the risk of being used as a conduit for financial crime. UOB Kay Hian has taken remedial measures to enhance their internal policies and controls. In addition, MAS has required UOB Kay Hian to appoint an independent external party to validate the implementation and effectiveness of its remediation measures and report the findings to MAS.”
