Financial Services Commission to Discuss DLF Sanctions for the First Time at Today's Securities and Futures Commission Meeting

The Securities and Futures Commission to Discuss Fines Imposed on Woori and Hana Banks
Financial Supervisory Service Imposes 6-Month Partial Business Suspension and Fines of 23 Billion and 26 Billion Won on Woori and Hana Banks, Respectively.

Eun Sung-soo, Chairman of the Financial Services Commission, is giving opening remarks at the CEO meeting of specialized credit finance companies held on the 29th at the Government Complex Seoul in Jongno-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kangwook Cho] The Securities and Futures Commission under the Financial Services Commission will hold its first review on the 12th regarding institutional sanctions on Woori Bank and Hana Bank related to overseas interest rate-linked derivative-linked funds (DLF).

Amid recent controversies over the heavy disciplinary decisions by the Financial Supervisory Service and Woori Financial Group, the financial sector's attention is focused on which side the Financial Services Commission will support.

According to financial authorities and the financial sector, the Securities and Futures Commission, meeting at 2 p.m. that day, plans to discuss the fines imposed on Woori Bank and Hana Bank related to DLF. This follows the Financial Supervisory Service's recommendation on the 30th of last month at the 3rd DLF Disciplinary Review Committee to impose a six-month partial suspension of business and fines of 23 billion KRW and 26 billion KRW respectively on Woori Bank and Hana Bank.

In the case of DLF-related sanctions, disciplinary actions against the CEO are finalized with the approval of the Financial Supervisory Service chief, but institutional sanctions such as partial suspension of business and fines require the resolution of the Financial Services Commission. The Securities and Futures Commission and the Financial Services Commission hold regular meetings biweekly on Wednesdays. Typically, the procedure involves review by the Securities and Futures Commission followed by resolution at the Financial Services Commission's regular meeting.

The Securities and Futures Commission, chaired by Son Byung-doo, Vice Chairman of the Financial Services Commission, consists of standing member Choi Jun-woo and non-standing members including Professor Lee Sang-bok of Sogang University, Professor Lee Joon-seo of Dongguk University, and Professor Park Jae-hwan of Chung-Ang University.

Particularly, the timing of the Financial Services Commission's decision and notification is the biggest point of interest as Son Tae-seung, Chairman of Woori Financial Group, has expressed his intention to file an administrative lawsuit against the Financial Supervisory Service's heavy disciplinary decision. The disciplinary effect occurs once the institutional sanctions are finalized and notified at the Securities and Futures Commission and the full meeting of the Financial Services Commission. In other words, if the institutional sanctions are confirmed at the Securities and Futures Commission and the full meeting of the Financial Services Commission in February before the shareholders' meeting, the sanctions will take effect before the meeting, casting a red light on reappointment.

Moreover, the recent strong expression of reappointment intention by Chairman Son and the Woori Financial Group board's support for it have complicated the Financial Supervisory Service's stance, which is another reason why the Financial Services Commission's decision is being closely watched. Amid the confrontation between the Financial Supervisory Service and Woori Financial Group, criticism is even being raised that the higher authority, the Financial Services Commission, is not showing its presence.

Regarding this, Eun Sung-soo, Chairman of the Financial Services Commission, told reporters after a luncheon meeting with CEOs of foreign financial companies held at the Conrad Hotel in Yeouido, Seoul on the 10th, "If the institutional sanctions part is transferred to the Financial Services Commission, we will do our work within the given time to avoid misunderstandings as much as possible."

The Financial Services Commission expects the procedures, including review by the Securities and Futures Commission, the Financial Services Commission agenda review subcommittee, and prior notification to the parties involved, to be completed as early as the beginning of next month.

This content was produced with the assistance of AI translation services.