Financial Services Commission Imposes 2 Billion KRW Fine on NongHyup Bank for Selling 'OEM Funds'
[Asia Economy Reporter Park Ji-hwan] The Securities and Futures Commission under the Financial Services Commission has finalized a fine of 2 billion KRW against NongHyup Bank for failing to submit a securities registration statement related to its "Original Equipment Manufacturer (OEM) funds" (violation of disclosure obligations).
On the 24th, the Financial Services Commission held a plenary meeting and announced that it decided to impose a fine of 2 billion KRW on NH NongHyup Bank. This is the first sanction case related to the failure of a distributor to submit a securities registration statement.
On the same day, the Securities and Futures Commission imposed fines of 1 billion KRW and 477.2 million KRW respectively on Fine Asia Asset Management and Aram Asset Management, and also decided to impose a surcharge of 1 billion KRW on both companies.
The Financial Services Commission stated, "In accordance with the deliberation results of the Securities and Futures Commission, which considered the legal status of NongHyup Bank and the surcharge amounts imposed on Fine Asia Asset Management and Aram Asset Management, who are obligated to submit the securities registration statement, the original proposal by the Financial Supervisory Service was revised and approved." Initially, the Financial Supervisory Service proposed a fine of 10.5214 billion KRW on NongHyup Bank to the Securities and Futures Commission, but it was reduced to about one-fifth of that amount.
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According to the Financial Services Commission, from 2016 to 2018, NongHyup Bank ordered and produced OEM funds from Fine Asia Asset Management and Aram Asset Management and then sold them. NongHyup Bank is accused of violating the Capital Markets Act by splitting the funds into private equity funds with fewer than 49 investors (series funds) to evade regulations on public offering funds, such as submitting securities registration statements.
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