Seoul cracks down hard on for­eign banks, se­cu­ri­ties firms

The Pak Banker - - Front Page -

SEOUL: Korea's fi­nan­cial reg­u­la­tor is tak­ing stricter ac­tion against of­fend­ing global fi­nan­cial in­sti­tu­tions.

In ad­di­tion, it is cross­ing bor­ders, con­duct­ing a probe on Deutsche Bank in Hong Kong on sus­pi­cion of trig­ger­ing a stock mar­ket shock last month.

The Fi­nan­cial Su­per­vi­sory Ser­vice (FSS) has slapped penal­ties on units of Bar­clays Bank, JP Mor­gan Chase, Bank of Nova Sco­tia, OCBC Bank and No­mura Se­cu­ri­ties.

The Bar­clays branch re­ceived a rep­ri­mand, with its four cur­rent and for­mer em­ploy­ees pun­ished last week for vi­o­lat­ing bank­ing rules over for­eign ex­change trad­ing, the FSS said. The nation's fi­nan­cial watchdog said the Bar­clays branch was re­spon­si­ble for in­cur­ring 36.5 bil­lion won ($31.8 mil­lion) in losses for its clients by fail­ing to adopt proper risk-man­age­ment meth­ods when it traded $1.2 bil­lion of cur­rency op­tions with three lo­cal com­pa­nies be­tween June 2006 and Novem­ber 2007.

The FSS also said that it failed to file reg­u­la­tory re­ports with au­thor­i­ties over cur­rency fu­tures. One staff mem­ber at the Seoul branch of JP Mor­gan Chase was also re­cently pun­ished for over­look­ing cor­po­rate clients' high-risk trad­ing of over-the-counter fi­nan­cial de­riv­a­tives worth $189 mil­lion.

The branches of the Canada-based Bank of Nova Sco­tia and Singapore's OCBC Bank each re­ceived a rep­ri­mand and a fine, for re­leas­ing loans in ex­cess of al­low­able lev­els, the reg­u­la­tor said.

The Seoul branch of No­mura Se­cu­ri­ties saw five em­ploy­ees rep­ri­manded for con­vey­ing in­side in­for­ma­tion to over­seas in­sti­tu­tional in­vestors, the FSS said. The reg­u­la­tor said that it is not tar­get­ing the for­eign fi­nan­cial in­sti­tu­tions op­er­at­ing in Korea. -PB News

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