Article Summary: Korea's Financial Supervisory Service (FSS) plans to impose fines totaling about 600 billion won on five banks including Standard Chartered for improper sales of HSCEI-linked ELS.
According to Korean media reports, the Financial Supervisory Service (FSS) has decided to impose fines totaling approximately 600 billion won (about 3.07 billion HKD) on five banks, including Standard Chartered (2888), for losses related to equity-linked securities (ELS) linked to the Hang Seng China Enterprises Index.
FSS Revisits Sanctions: Total Fine About 600 Billion Won
On Thursday (4th), the FSS held a sanctions review to rediscuss the sanctions for improper ELS sales, ultimately setting the total fine for the five banks—KB Kookmin, Shinhan, Hana, NH Nonghyup, and Standard Chartered Korea—at around 600 billion won.
Fine Reduced: From Over 1.4 Trillion Won to Less Than Half
The fine has been reduced from over 1.4 trillion won proposed by the FSS in February this year to less than half. Compared to the FSS's initial estimate of about 4 trillion won after the incident, the current scale is even less than one-sixth.
Regulatory Allegations: Systemic Failures and Compliance Issues
In early 2024, the FSS confirmed that five Korean banks and six securities firms had serious regulatory non-compliance and systemic failures when selling complex financial products linked to the HSCEI. The FSS also noted that if the HSCEI remained at early 2024 levels, related ELS retail investors would lose 5.8 trillion won (then about 34.5 billion HKD), with many retail investors being retirees.
The FSS stated at the time that it would determine fines and other regulatory actions based on financial companies' compensation to customers and efforts to restore customer confidence.
(Reporter Lin Defen)
