 |
Photo courtesy of Korea Investment & Securities |
[Alpha Biz= Paul Lee] Seoul – Korea Investment & Securities has recorded the highest number of regulatory violations among Korean brokerages since 2020, according to data released by lawmaker Kim Sang-hoon of the People Power Party, citing the Financial Supervisory Service (FSS).
Between 2020 and the first half of 2025, regulators identified a total of 73 cases of improper business practices in the securities sector. Korea Investment & Securities accounted for 10 cases, the most among peers, involving breaches such as:
Violations of the ban on improper underwriting practices
Breaches of restrictions on fund distributors giving instructions to asset managers
Linked transactions between trust accounts and proprietary assets to circumvent bans on providing post-sale benefits
Notably, four cases were recorded in the first half of 2025 alone, placing the firm in joint first place with KB Securities (4 cases) for that period.
Other firms cited include KB Securities (9 cases), Meritz Securities (7), Mirae Asset and Hana Securities (6 each), Yuanta, Kyobo, and Eugene Investment & Securities (5 each), Shinhan Investment (4), and SK and iM Securities (3 each). Several others, including Samsung Securities, Hanwha Investment, Kiwoom Securities, and IBK Investment, recorded one violation each.
Implications for Licensing
The findings are particularly sensitive for Korea Investment & Securities, as the firm is currently under review for approval to operate as an Integrated Investment Management Account (IMA) provider, alongside Mirae Asset and NH Investment & Securities.
If approved, IMA licensing would allow brokerages to raise funds up to 300% of equity capital, compared to the current 200% limit under issuance of promissory notes. Korea Investment & Securities is already one of only four licensed note-issuing brokerages in Korea and has been fully utilizing the 200% threshold.
The repeated violations may weigh on regulatory deliberations, raising concerns over compliance standards and risk management practices within Korea’s securities industry.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
