[Source: Financial Supervisory Service]
South Korean financial watchdog may ease the fines or penalty scope on brokerage houses for alleged irregular market-making practices which have been virtually stopped in the local bourses after the rare sanction was alerted.
Financial Supervisory Service (FSS) Governor Jeong Eun-bo during his meeting with representatives of brokerages on Tuesday said the government will “respect self-correcting measures by securities companies after communications over the investigation results.”
The meeting was attended by Na Jae-cheol, chairman at Korea Financial Investment Association, Choi Hyun-man, vice chairman at Mirae Asset Securities, and Jung Il-moon, chief executive of Korea Investment & Securities.
Most of the 14 brokerages designated as market markers chose to surrender their role since September after nine were warned of a combined fine of 48 billion won ($41 million) for disturbing market order through unsuitable bids and offers.
Market-making brokerages act to stimulate a target stock’s trade by making two-way quotes or indicating bid and offer price of the stock during trade hours on the exchanges.
He emphasized that the FSS will improve its around-the-clock, on-site audit system to help risk vulnerable sectors detect risks in advance and tackle them effectively.
Jeong also discussed with the heads how the FSS can help improve the country’s retirement pension profitability by actively supporting financial firms in finding better solutions to improve profitability.
By Moon Ji-woong and Lee Eun-joo
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