[2021 National Audit] Jeong Eun-bo "Reassessment of Market Maker Penalties"

Jeong Eun-bo, Governor of the Financial Supervisory Service, attended the National Assembly's inspection of the Financial Supervisory Service held by the National Assembly's Political Affairs Committee on the 7th and is responding to questions from lawmakers. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Ji Yeon-jin] Jeong Eun-bo, Governor of the Financial Supervisory Service (FSS), stated regarding the notification of hundreds of billions of won in fines to market makers, "We will further examine whether to apply penalties for repeated bid correction cancellations and other market order disturbances to market makers."

Governor Jeong said at the National Assembly's Political Affairs Committee's audit of the FSS, "It is true that fines were preliminarily notified to securities firms functioning as market makers," adding this statement.

He emphasized, "Since fines are imposed to recover unjust and illegal profits, we will readjust the fines within the scope of unfair profits gained by securities firms through the process of bid correction cancellations."

Earlier, the FSS recently notified fines totaling 48 billion won to market maker securities firms including Mirae Asset Securities, Hanwha Investment & Securities, Shinhan Financial Investment, Korea Investment & Securities, Shinyoung Securities, and Bookook Securities, alleging that they influenced market prices through bid corrections.

The market maker system is designed to supply liquidity through securities firms to ensure smooth trading of low-liquidity stocks. Securities firms contracted with the Korea Exchange continuously submit sell and buy bids for contracted stocks, thereby performing the market-making role. The FSS believes that these securities firms influenced market prices through excessive order corrections or cancellations during this process.

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