Following Hantoo Securities, Shinhan Investment Corp. also fined for short-selling regulation violations
[Asia Economy Reporter Lee Jung-yoon] It has been confirmed that Shinhan Financial Investment was also fined for violating short-selling regulations.
According to the Financial Supervisory Service's electronic disclosure system on the 28th, Shinhan Financial Investment disclosed in its first-quarter report that it was fined 72 million KRW by the Financial Services Commission in February for violating short-selling restrictions. The actual payment amount was reduced by 20% to 57.6 million KRW.
Shinhan Financial Investment was found to have violated the uptick rule, a system that prohibits submitting short-selling bids below the previous price to prevent price declines due to short selling. A Shinhan Financial Investment employee placed bid orders below the previous transaction price once each in 2018 and 2019. The total order amount was approximately 200 million KRW.
Meanwhile, Korea Investment & Securities was fined 1 billion KRW on February 23 by the Securities and Futures Commission for violating Article 180, Paragraph 1 of the Capital Markets Act, which contains short-selling restriction regulations. This fine is the largest since Goldman Sachs International was fined 7.548 billion KRW in 2018 for naked short selling, and it is the largest amount among domestic securities firms.
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According to short-selling data obtained by the Korea Federation of Investment Associations through a request for information disclosure from the Financial Supervisory Service, Korea Investment & Securities sold approximately 140 million shares of about 900 companies without marking them as short sales for about three years and three months from February 2017. Article 208 of the Enforcement Decree of the Capital Markets Act stipulates that investors who entrust the sale of securities must inform the brokerage firm whether the sale is a short sale, but this was violated. Among the shares traded as regular sales despite being short sales, Samsung Electronics had the largest volume at 25.52 million shares, followed by SK Hynix (3.85 million shares) and Mirae Asset Securities (2.98 million shares).
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