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Lee Chan-jin, Governor of the Financial Supervisory Service. (Photo: Yonhap News Agency) |
[Alpha Biz= Ellie Kim] Lee Chan-jin, head of South Korea’s Financial Supervisory Service, said penalties related to the mis-selling of Hong Kong H-index-linked equity-linked securities (ELS) will be reduced to below KRW 1 trillion.
Speaking after a Financial Supervisory Advisory Committee meeting in Seoul on May 15, Lee indicated that the final penalty amount would not reach the trillion-won level, marking a further reduction from the current proposal.
His remarks came just two days after the Financial Services Commission requested revisions to the sanction plan, highlighting concerns over the scale of penalties.
Lee noted that the FSS had already acknowledged that the initial penalty levels were excessive when submitting the proposal to the FSC, and that internal discussions are ongoing regarding how to further adjust the fines. He added that a senior deputy governor attended FSC meetings to address the issue.
The regulator aims to finalize the revised measures by the end of May, though the timeline could be extended by up to two weeks.
The FSC had previously reviewed the sanctions on May 13 but refrained from making a decision, instead sending the case back to the FSS for additional clarification on facts and legal interpretations—an uncommon move at that stage of deliberation.
The current penalty proposal stands at around KRW 1.4 trillion, already reduced from an initial pre-notified level of approximately KRW 2 trillion after multiple rounds of internal review.
The FSC is understood to have raised concerns about the proportionality of penalties and requested clearer standards for inspections across banks and securities firms, as well as refined legal reasoning on the simultaneous application of disclosure obligations and unfair solicitation rules under financial consumer protection laws.
The FSS is expected to revise its methodology for calculating penalties and resubmit the proposal for final approval.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
