The Financial Services Commission failed to decide on the "final penalty surcharge" over the mis-selling of Hong Kong H-share index equity-linked securities (ELS) and ultimately sent the agenda back to the Financial Supervisory Service (FSS). Some suggest this could be an additional reduction step to ease the burden on banks under the government's push to expand productive finance.
The Financial Services Commission (FSC) held a regular meeting on the 13th to deliberate an agenda on sanctions against banks over the mis-selling of Hong Kong H-share index ELS, but did not reach a final conclusion. The FSC then sent the agenda back to the Financial Supervisory Service (FSS), requesting supplements on certain facts and legal reasoning.
The Financial Services Commission (FSC) said it "requested supplements regarding certain facts in the proposed measures and the applicable statutes and legal principles," adding it "plans to review the case again swiftly and thoroughly once the supplements are made."
The penalty surcharge currently before the FSC amounts to about 1.4 trillion won. The Financial Supervisory Service (FSS) had initially given prior notice of a total penalty surcharge of 1.9326 trillion won. The entities subject to sanctions are KB Kookmin Bank, Shinhan Bank, Hana Bank, NH Nonghyup Bank, and Standard Chartered Bank Korea. However, after three rounds of the sanctions review committee, the penalty surcharge was set at around 1.4 trillion won, about a 20% reduction from the prior notice, in consideration of the banking sector's "compensation efforts" and "preventive efforts" following the ELS mis-selling.