South Korea’s top financial regulators and the stock exchange operator will launch a joint task force to strengthen oversight of illegal financial transactions, while streamlining the delisting process of non-viable companies, according to their joint statement on Wednesday.
Currently, the country’s regulatory framework for tackling unfair financial trading is fragmented across the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and the Korea Exchange (KRX).
The division of responsibilities has led to jurisdictional gaps and delays in regulatory action.
The FSC, a government financial watchdog, sets financial policies and makes rules, while the FSS supervises financial institutions.
“We will actively utilize administrative sanctions, including payment suspensions, fines, restrictions on financial investment product trading and objections to certain executive appointments,” they said in the statement.
The regulators will apply AI technology to crack down on illegal trading activities, particularly those that exploit social media or false media reports.
HIGHEST-LEVEL PENALTIES AGAINST ILLEGAL SHORT SALES
In cases where controlling shareholders or company executives are involved in serious market misconduct, the regulators will actively disclose their identities to prevent similar harm.
“For serious short selling violations, we will impose the highest level of penalties, including fines of up to 100% of the order amount, along with business suspensions and restrictions on trading financial investment products,” it said.
To remove non-viable companies from the stock market in a timely manner, they will also streamline the delisting process by cutting red tape.
By Yeonhee Kim
yhkim@hankyung.com
