The Financial Supervisory Service to Hold Lime Asset Management Disciplinary Hearing Next Month... Cancellation of Registration Expected

[Asia Economy Reporter Park Jihwan] The Financial Supervisory Service (FSS) will hold a disciplinary review committee next month to sanction asset management companies and sales firms involved in the Lime Asset Management private fund redemption suspension incident. Lime Asset Management and Shinhan Financial Investment, who continued sales despite knowing the products were defective, are expected to face severe disciplinary actions.

The FSS plans to hold the disciplinary review after completing the transfer of Lime fund's bridge management company (bad bank), scheduled for the end of next month.

The amount of suspended redemptions in Lime Asset Management's private funds reaches 1.6679 trillion KRW (across 4 mother funds and 173 sub-funds). It was revealed that Lime Asset Management and Shinhan Financial Investment continued selling the funds by changing management methods to conceal the defects even after recognizing the fund's insolvency in November 2018.

Earlier, the FSS Dispute Mediation Committee ruled that sales firms must refund the full principal to investors who subscribed to the Pluto TF-1 fund after November 2018.

The disciplinary level for Lime Asset Management is expected to be a severe sanction, including cancellation of registration. In the case of Shinhan Financial Investment, severe disciplinary measures are also inevitable, and attention is focused on whether sanctions will extend to the management.

Securities firms that sold the funds, including Daishin Securities, as well as sales banks such as Shinhan Bank and Woori Bank, are also expected to face disciplinary hearings for issues related to incomplete sales.

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