Retail investors wanting to buy into Bank of East Asia's yuan-denominated bonds will have to go through a longer subscription process than in previous sales as new rules tightening banks' sales practices became effective yesterday.
Banks must make more detailed risk presentations to customers and record sales activities to avoid a repeat of the controversy over the sales of Lehman Brothers-linked minibonds.
Frederick Chan Hoi-kit, a general manager at Chong Hing Bank, one of the placing banks for BEA's bonds, said the sales process had increased from previous yuan bond sales.
'Our staff have to take more time to explain to customers about the product and [make audio recordings of] the sales process,' he said.
Bank of East Asia (China), the mainland unit of BEA, will issue 3 billion yuan (HK$3.4 billion) worth of bonds to retail and institutional investors. The retail offering began on Tuesday and runs until July 17 and is available from 18 placing banks.
Standard & Poor's yesterday assigned an A-minus rating to the bonds.
The bond is the first big investment offering apart from mutual funds launched after the Securities and Futures Commission and the Hong Kong Monetary Authority tightened the rules following the Lehman incident.
