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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] Shinhan Investment Corp. has reported a significant operating loss of approximately 130 billion KRW related to trading in exchange-traded funds (ETFs).
According to a disclosure made on October 13, the loss stemmed from trading and clearing of futures contracts that took place on October 11. The company revealed that an ETF liquidity provider (LP) engaged in trading activities that deviated from its intended purpose, leading to substantial losses. To obscure this, the firm allegedly misclassified these transactions as swap trades.
An ETF LP is responsible for continuously quoting buy and sell prices, which helps maintain stable trading and price formation. However, in this case, it appears the LP conducted excessive trades outside of this role, resulting in significant losses. The period of these questionable trades has been identified from August 2 to October 10. Notably, August 2 marked the beginning of market volatility due to concerns over a U.S. recession, and on August 5, Asian markets, including the KOSPI, experienced a sharp decline, known as "Black Monday."
Shinhan Investment Corp. confirmed that it identified the misclassification of swap trades through its internal control system. Following an internal investigation, the company reported the findings to the Financial Supervisory Service (FSS).
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
