The Securities and Futures Commission Imposes Fines on Asset Management Firms for Violating MMF Inclusion Regulations
[Asia Economy Reporter Park Jihwan] Financial authorities have imposed fines on asset management companies that violated regulations by including credit default swap (CDS)-linked asset-backed commercial paper (ABCP) in money market funds (MMFs).
On the 8th, the Securities and Futures Commission under the Financial Services Commission held a regular meeting in the afternoon and imposed fines on 19 asset management companies that included CDS-linked ABCP in their MMFs.
This case emerged during the deterioration of investment sentiment toward ABCP backed by deposits from Qatar National Bank (QNB) amid the US-Turkey trade dispute in August 2018, revealing that domestic asset management companies had incorporated such ABCP into their MMFs, prompting an inspection by the Financial Supervisory Service (FSS).
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The FSS stated, "For MMFs, short-term financial products eligible for inclusion are specified to ensure stability and liquidity, and this ABCP does not meet those criteria."
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