South Korea’s financial firms will face severe punishments if they are found to be engaged in incomplete sales of financial products, which cause multiple victims

Financial firms to face suspension of operations over incomplete sales

Lee Eun-ah, Park Yong-beom

2013.11.21 17:48:39

South Korea’s financial firms will face severe punishments if they are found to be engaged in incomplete sales of financial products, which cause multiple victims. These punishments include suspension of operation and cancelation of business approval. When it comes to 10 malpractices including financial firms’ undue support for their majority shareholders or affiliates, the authorities will impose the strictest penalty stipulated by the relevant law. The measures to prevent the repeat of Tong Yang scandal were unveiled by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) Thursday. Chung Chan-woo, vice chairman of the FSC noted, “if financial firms are caught violating laws and inflicting harms to the public including unfair support for large shareholders and financial affiliates, they will be subject to the most strict punishments stipulated by relevant laws.” The government is set to toughen criteria on relevant regulations
The FSC categorized 10 violations to be under close monitoring which include unfair transaction of stocks, illegal private financial business, illegal trade of foreign currency and illegal and illegal debt collection in addition to incomplete sales of financial product and unfair support of affiliated companies. An official at FSC said, “they’ve received warnings for engaging in incomplete sales, but suspension of operation was the most harsh restrictions they’ve faced so far,” adding “we`ll strictly deal with the violators.”
The authorities will issue comprehensive regulations on act of offering indirect support for underperforming affiliates via financial units.
As for credit lending arms belonging to conglomerates, the FSC, not a municipality, will be in charge of registration, oversight and punishment.
Meanwhile, Shin Je-yoon, chairman of the FSC noted that it will undertake an intensive restructuring for underperforming brokerage firms.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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