 |
Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korea’s financial regulators have imposed fines totaling ₩3.97 billion on six domestic and foreign financial firms, including Shinhan Asset Management, for illegal short selling.
On January 19, the Securities and Futures Commission (SFC) under the Financial Services Commission announced that it had sanctioned financial firms that violated short-selling regulations in October last year.
Domestic sanctions: Shinhan Asset Management was the only South Korean firm penalized. In March 2023, Shinhan Asset Management sold 5,000 shares of Ecopro, worth approximately ₩1.85 billion, without holding the underlying stock, violating short-selling rules. The company was fined ₩370.6 million.
Foreign sanctions: Among overseas firms, Norway’s Pareto Securities faced the largest penalty of ₩2.26 billion for selling 178,879 Samsung Electronics common shares, worth about ₩10.9 billion, without owning them in November 2022. Other fined foreign firms include:
Alberta Investment Management (Canada): ₩546.9 million
Invesco Capital Management (USA): ₩532.3 million
Norton Trust (Hong Kong): ₩141.7 million
GIC Private Limited (Singapore): ₩120.6 million
Many of these cases were identified following a comprehensive inspection of illegal short-selling by global investment banks conducted by regulators ahead of the March 2023 short-selling resumption.
Industry experts interpret the fines as a signal of the regulators’ firm stance against illegal short selling. The financial authorities operate a real-time short-selling monitoring system (NSDS) to continuously supervise short-selling transactions.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
