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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Penalty reduced by 15%; institutional sanctions lowered from business suspension to warning
South Korea’s Financial Supervisory Service (FSS) has finalized administrative fines totaling approximately KRW 1.4 trillion against five banks for mis-selling Hong Kong H-Index-linked equity-linked securities (ELS).
According to financial industry sources on Feb. 12, the FSS confirmed the penalties during its sanctions review committee meeting covering KB Kookmin Bank, Shinhan Bank, Hana Bank, NH NongHyup Bank, and SC First Bank Korea.
The regulator reduced the previously notified fines—initially set at around KRW 1.9 trillion—by roughly KRW 500 billion, lowering the total to about KRW 1.4 trillion. The applicable penalty rate was cut by approximately 15 percentage points, from 65% to 50%.
Institutional sanctions were also downgraded. While the FSS had initially proposed partial business suspensions for the five banks, it lowered the measure to an institutional warning. Disciplinary actions against individual employees in charge of the Hong Kong ELS products were also reduced from suspension to salary reduction or lighter penalties.
The FSS said the adjustments reflected the banks’ voluntary compensation efforts, remedial measures taken after the incidents, and steps implemented to prevent recurrence.
As the final decision rests with the Financial Services Commission (FSC), further debate is expected during the commission’s deliberation process.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
