Bloomberg: "FSS Recommends 10 Billion KRW Fine Each for HSBC and BNP Paribas for Naked Short Selling"

Financial Supervisory Service, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

The Financial Supervisory Service plans to impose fines totaling 20 billion KRW, with 10 billion KRW each on BNP Paribas and HSBC for naked short selling, Bloomberg reported.

On the 21st, Bloomberg cited two well-informed sources who requested anonymity to report this. It was conveyed that the Financial Supervisory Service recommended this to the Financial Services Commission's Securities and Futures Commission.

Naked short selling refers to short selling without borrowing the stocks in advance. It means selling first and then borrowing the stocks later, but under the domestic Capital Market Act, all short selling except for borrowed short selling is prohibited.

Additionally, one of the sources said that the commission discussed the amount of the fines at a meeting the previous day but did not reach a conclusion.

Earlier, the Financial Supervisory Service detected that BNP Paribas' Hong Kong branch conducted naked short selling worth 40 billion KRW on 101 stocks, including Kakao, from September 2021 to May last year.

Hong Kong HSBC was also found to have conducted naked short selling worth approximately 16 billion KRW on 9 stocks, including Hotel Shilla, from August to December 2021.

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