Financial Supervisory Service Announces 48 Billion KRW Fine to 9 Securities Firms for 'Market Disruption' Allegations
[Asia Economy Reporter Ryu Tae-min] The Financial Supervisory Service (FSS) has announced plans to impose fines totaling 50 billion KRW on nine domestic and international securities firms for market disruption activities.
According to the financial investment industry on the 3rd, the FSS notified Mirae Asset Securities, Hanwha Investment & Securities, Shinhan Financial Investment, Korea Investment & Securities, Shin Young Securities, Bukook Securities, and others that they would be fined 48 billion KRW for disturbing market order. These securities firms are suspected of influencing market prices as market makers.
The market maker system refers to a system where securities firms supply liquidity to stocks with insufficient liquidity to facilitate smooth trading. Securities firms contracted with the Korea Exchange perform market making by continuously submitting sell and buy quotes for the contracted stocks.
The FSS believes that during this process, the securities firms excessively modified or canceled orders, thereby influencing market prices. Accordingly, Mirae Asset Securities and Hanwha Investment & Securities were fined over 8 billion KRW each, while Shinhan Financial Investment, Korea Investment & Securities, and Shin Young Securities received fines ranging from 1 to 4 billion KRW.
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On the other hand, the securities firms maintain that they performed their roles lawfully as part of normal market making activities and deny any market disruption. This fine notification is preliminary, and the final penalty will be determined after a hearing process. The FSS plans to hold a Capital Market Investigation Deliberation Committee meeting to discuss the level of sanctions.
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