The Financial Services Commission lowered the level of sanctions related to Samsung Securities(016360)'s hub branches from the originally proposed level. This has lit a green light for Samsung Securities' issuance of promissory notes approval.
According to the securities industry on the 31st, the Financial Services Commission at its regular meeting that day reviewed the sanctions plan related to unfair business practices at Samsung Securities' hub branches and resolved to issue an institutional warning.
This measure is lighter than the heavy sanctions initially recommended by the Financial Supervisory Service. Earlier, the Financial Supervisory Service inspected business practices at hub branches catering to ultra-high-net-worth VIP clients in Apr. last year and recommended heavy sanctions, including partial suspension of business, against Samsung Securities.
With this decision, approval for Samsung Securities' promissory note business is set to speed up. Samsung Securities was designated in 2017 as a "comprehensive investment broker with equity capital of 4 trillion won or more," a requirement for the promissory note business, but new approvals for promissory notes were effectively halted because sanctions related to hub branches had not been finalized. Under the Financial Investment Services and Capital Markets Act, receiving sanctions of business suspension or higher can constitute grounds for disqualification from approval for short-term finance.
If Samsung Securities obtains approval to issue promissory notes, it will become the eighth operator after Korea Investment & Securities Co., NH Investment & Securities, KB証券, Mirae Asset Securities, Kiwoom Securities, Hana Securities, and Shinhan Investment Corp.