Approvals for NH Investment & Securities' integrated investment management account (IMA) and for commercial paper issuance by Samsung Securities and Meritz Securities are all expected to be decided next month. The reviews have wrapped up as the government has announced plans to expand the supply of venture capital.
In particular, Samsung Securities is highly likely to be sanctioned in connection with inspections of its hub branches by the Financial Services Commission.
According to the investment industry on the 27th, the agenda items for NH Investment & Securities' IMA approval and for the commercial paper issuance approvals for Samsung Securities and Meritz Securities are expected to receive final votes at a regular meeting after undergoing review by the Securities and Futures Commission as early as on the 11th of next month.
NH Investment & Securities applied last September to become a comprehensive investment business entity with more than 8 trillion won for the IMA business, following Korea Investment & Securities Co. and Mirae Asset Securities. It has completed an on-site inspection and is awaiting the outcome. Early this month, NH Investment & Securities set up an IMA Management Division and appointed Director Chae Min-gyun, a former senior portfolio manager at the National Pension Service, as head of the division, starting preparations for the business ahead of approval.
Meritz Securities and Samsung Securities have also completed evaluations and on-site inspections by an external review committee and are awaiting the Securities and Futures Commission (SFC)'s decision.
In the industry, there is weight to the possibility that a conclusion will be reached in a similar manner this time, given the precedent at the regular meetings of the Securities and Futures Commission (SFC) and the Financial Services Commission (FSC) in November last year, when the IMA designation items for Korea Investment & Securities Co. and Mirae Asset Securities and the commercial paper designation item for Kiwoom Securities all passed together.
An official at the financial authorities said, "Because approvals for the IMA and commercial paper businesses require political judgment, handling them together is efficient from a work perspective."
Meanwhile, sanctions related to inspections of Samsung Securities' hub branches are also expected to be put on the review agenda. The Financial Supervisory Service selected Samsung Securities last year as a target for inspections of wealth management (WM) hub branches and detected unsound business practices after inspecting the Samsung Town Finance Center and SNI Family Office, among others.
At the Financial Supervisory Service (FSS) sanctions review committee held on the 12th, both institutional sanctions, including a business suspension for branches, and personnel sanctions were approved, but the level of sanctions was reportedly lowered from the original plan. As it was a matter of internal control, Chief Executive Park Jong-moon's penalty was also reduced from heavy discipline in the original plan to light discipline.
The fact that financial authorities are maintaining a policy stance of expanding the supply of venture capital is expected to have an impact between these sanctions and the commercial paper approvals. Some suggest that at the Financial Services Commission (FSC) stage, conditional approvals or further adjustments to the level of sanctions could be made.
In fact, Financial Supervisory Service (FSS) Governor Lee Chan-jin noted in the work plan announcement on the 9th that, regarding the stance on IMA and commercial paper approvals, "In the case of a particular company, licensing and sanctions issues coexist, and we are making careful efforts to ensure that, with respect to venture capital, no obstacles arise to licensing."