 |
(Photo=Shinyoung Securities) |
[Alpha Biz= Reporter Kim Minyoung] According to financial authorities, Shin Young Securities was fined for operating film and cultural content funds at the direction of film distributors, which violates the Capital Market Act.
On the 8th, the Securities Futures Commission under the Financial Services Commission decided on corrective measures based on recent spot inspection results regarding Shin Young Securities.
The Financial Supervisory Service concluded, based on inspections last year, that Shin Young Securities set up funds under the same operational conditions after receiving business proposals containing specific fund operation details from investors.
From June 2017 to June 2022, Shin Young Securities operated private funds investing in films and other cultural content. Even securities firms, not just asset management companies, can directly manage hedge funds if they register as general collective investment businesses with the Financial Supervisory Service.
Inspection results showed that Shin Young Securities received proposals from investors detailing specific investment targets such as certain films. The proposals included instructions to manage index funds that invest in films distributed by the distributing company at a certain percentage, along with specifics on investment amounts and durations.
Shin Young Securities indeed set up funds under the same operational conditions as specified in these proposals.
Under Article 85 of the Capital Market Act, management of collective investment property based on investor requests, known as Original Equipment Manufacturing (OEM) fund management, is prohibited. This is to ensure the independence of fund management by preventing investor involvement.
However, Shin Young Securities argued before the Securities and Futures Commission that due to the nature of funds investing in films, it was unavoidable.
Unlike other financial investment products, films lack publicly disclosed information. Therefore, without receiving information such as scenarios and cast members from the film distributor acting as the investor, investment in films would be fundamentally impossible. Shin Young Securities maintained that it received all relevant film information from investors and made selective investments accordingly.
In particular, to align the interests of operators and fund beneficiaries, Shin Young Securities first involved film distributor investors as fund beneficiaries. They emphasized that no one involved in this fund suffered losses or illegally gained profits.
The Securities and Futures Commission acknowledged that Shin Young Securities made some effort to independently review fund setup and operations. Consequently, they decided to reduce the initial fine of 40 million KRW imposed by the Financial Supervisory Service to 30 million KRW.
AlphaBIZ Kim Minyoung(kimmy@alphabiz.co.kr)
