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[Apha Biz=(Chicago) Reporter Paul Lee] Financial authorities are considering imposing fines on the Korea Exchange.
According to the office of Yoon Young-deok of the Democratic Party of Korea on the 16th, the Securities and Futures Commission under the Financial Services Commission will discuss the imposition of fines on the Korea Exchange at its 18th meeting scheduled for the 25th.
It is the first time in two years since the FSS conducted a sector (September 28-October 5) and a comprehensive inspection of the Korea Exchange (November 8-December 31) at the end of 2021. The sanctions agenda includes the market creator, short stock selling, and insufficient parts found in the operation of interest rate-related systems found through a comprehensive inspection. The sanctions agenda was first introduced at the 16th meeting of the Securities and Futures Commission held on the 20th of last month. We could not reach a conclusion at the time and decided to deliberate once more this month.
It is said that there is a high possibility that the Securities and Futures Commission meeting will conclude the imposition of fines.
Financial authorities expect the Korea Exchange sanctions process to be concluded as early as the end of this year. It has been six years since the sanctions were imposed in 2017. The Korea Exchange was inspected by the Financial Supervisory Service from May 25 to May 31, 2017, and was subject to sanctions, including management attention, for the delay in supplementing weaknesses in the information processing system on August 14 of the same year.
On November 8, 2021, the FSS launched a comprehensive inspection of the Korea Exchange, drawing keen attention from the industry. Because it was the first comprehensive examination in 11 years. The last comprehensive inspection of the Korea Exchange was conducted from November 15, 2010 to December 10 of the same year. At that time, the Korea Exchange was designated as a financial public institution, so it was natural to undergo a comprehensive inspection by the FSS.
However, when it was removed from public institutions in 2015, it changed its affiliation to a public organization. However, various tasks such as the opening and operation of the stock market, development and calculation of various indexes, listing and exit of companies, and market monitoring were commissioned by the government and inspected by the FSS when requested by the Financial Services Commission.
Calls for a comprehensive inspection of the Korea Exchange have been steadily raised since 2019. This is due to problems such as the appropriateness of the system operation of the Korea Exchange as the operator of the short selling system and the invocation of belated market measures during the Exchange Traded Note (ETN) crisis, which was criticized for degenerating into an investment board. However, it was delayed for about two years as the Financial Services Commission did not conclude the comprehensive inspection.
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