Business | Banking
DFSA sees no early resolution to Lehman fiasco
The Dubai Financial Services Authority (DFSA) has issued a statement emphasising that the recent closure of investment bank Lehman does not result from any action from DFSA.
- Staff Report
- Published: 17:29 September 16, 2008
Dubai: The Dubai Financial Services Authority (DFSA) has issued a statement emphasising that the recent closure of investment bank Lehman does not result from any action from DFSA.
DFSA said that it does not expect an early resolution to the current situation of Lehman Brothers.
Lehman Brothers International (Europe) is an investment bank domiciled in the United Kingdom and supervised by the UK Financial Services Authority (FSA).
On August 18, 2006 Lehman established a branch operation in the Dubai International Financial Centre (DIFC) under licence from the DFSA.
"On September 15, 2008 Lehman was placed under administration in the United Kingdom. The effect of that action was to place control of Lehman and all its operations, including its DIFC branch operation, under control of the administrators Price Waterhouse Coopers. Until and unless the administrators determine otherwise, Lehman (including the DIFC branch) is precluded from conducting business," DFSA said in the statement.
DFSA said that the "events leading up to the appointment of administrators were not connected with Lehman DIFC branch operations and that "Lehman has not been in breach of DFSA's requirements."
"The difficulties encountered by Lehman relates to its operations elsewhere. The closure of Lehman does not result from any action of the DFSA. It is the legal consequence of administration proceedings instituted in the United Kingdom by Lehman itself," DFSA said.
According to the statement, there is now client money that is being held by the DIFC branch of Lehman, while any money invested in the Lehman UK funds are regulated by the UK Financial Services Authority and are required by it to be segregated from assets of Lehman.
The UK FSA, which is the lead regulator of Lehman, has been in active dialogue with the administrators regarding the bank's future.
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