UPDATE 1-Australia bourse suspends Lehman Brothers

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SYDNEY, Sept 15 (Reuters) - The Australia Securities Exchange has suspended U.S. investment bank Lehman Brothers LEH.N as a participant initially for up to one month, the ASX said in a statement on Monday.

Lehman is not a clearing or settlement participant, and does not participate in ASX's daily settlement process, the ASX said. But it had third-party clearing arrangements under which its on-market trades were settled by Citigroup Securities and local broker Berndale Securities, a unit of Merrill Lynch MER.N.

The two brokerages terminated their arrangements with Lehman, forcing the ASX to temporarily suspend Lehman Brothers. Berndale and Citigroup would meet all unsettled on-market trade obligations. Lehman filed for bankruptcy protection on Monday, becoming Wall Street's most high profile bankruptcy since junk bond specialist Drexel Burnham Lambert collapsed in 1990. [nWEN8027].

An ASX spokesman said the decision to suspend Lehman was a rare event. (Reporting by Denny Thomas and Jonathan Standing)