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Photo = FSS |
[Alpha Biz= Reporter Kim Jisun] On the 14th, financial authorities revealed that the Financial Supervisory Service (FSS) has begun an on-site inspection of Shinhan Investment Corp, following recent issues, and has decided to extend inspections to 26 securities firms and major asset management companies with large managed assets.
The FSS sent official documents to these firms, instructing them to conduct internal reviews to identify any potential cases where losses from derivative transactions may have been concealed, and to report their findings to the FSS.
Financial Services Commission (FSC) Chairman Kim Byung-hwan also referenced the Shinhan Investment case, directing the FSS to conduct a thorough investigation. During a meeting with senior officials, Kim expressed concerns, stating, "Various financial accidents, such as embezzlement and fraudulent loans, continue to occur in the financial sector, and recently, significant losses were reported at Shinhan Investment." He emphasized the need for the FSS to thoroughly investigate the incident and take appropriate actions based on the findings.
Shinhan Investment previously disclosed on the 11th that it incurred losses of 130 billion won in its role as a liquidity provider (LP) for exchange-traded funds (ETFs). The loss occurred in the LP division, responsible for maintaining trading volumes in the ETF market by placing buy and sell orders. The issue arose during futures trading, as the department sought to generate additional profits beyond its basic liquidity role.
Although the initial loss amount was not as large, it reportedly grew during efforts to mitigate the situation. Given that this case involves proprietary trading (using the firm's own capital), Shinhan Investment plans to reflect the loss in its accounting, conduct an internal audit, and pursue legal action if necessary.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
