South Korea's securities regulator fines foreign financial firms for violations

South Korea's Securities and Futures Commission on Feb. 24 approved a combined fine of 685 million won on 10 unnamed financial institutions based overseas for violating a ban on naked short selling under the Financial Investment Services and Capital Markets Act.

The companies inadvertently or intentionally violated the naked shorting ban while trading 16 stocks between January 2018 and July 2019, the securities regulator said.

The country's Financial Services Commission said a separate short-selling investigation is ongoing, targeting market makers.

The FSC also plans to tighten short-selling regulation with new rules, including criminal penalties, coming into force April 6. Severe short-selling violations will be subject to a jail term of one year or longer and a punitive fine that amounts to five times the short-selling gains.

In addition, stock lending and borrowing transaction records should be kept for a mandatory five years, effective April 6.

As of Feb. 24, US$1 was equivalent to 1,109.43 South Korean won.