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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] The Financial Supervisory Service (FSS) held the first regulatory hearing on December 18 regarding the mis-selling of Hong Kong H-Index Equity-Linked Securities (ELS) by five major Korean banks. The banks under review include KB Kookmin, Shinhan, Hana, NH Nonghyup, and SC Jeil.
Although the hearings have commenced, no final decisions on penalties have been reached. Following additional hearings at the FSS, the case will proceed to the Financial Services Commission’s Securities and Futures Committee, with final fines expected to be confirmed between February and March next year.
The FSS had pre-notified the banks of total potential fines of approximately KRW 2 trillion. Estimated fines per bank vary based on the volume of sales, with KB Kookmin facing over KRW 1 trillion, Shinhan and Hana around KRW 300 billion each, NH Nonghyup KRW 200 billion, and SC Jeil KRW 100 billion.
Banks reportedly emphasized their efforts to compensate affected investors during the hearings. Under the revised Financial Consumer Protection Act, post-incident compensation can reduce fines by up to 50%, with additional preventive measures potentially increasing reductions to 75%.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
