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[Apha Biz=(Chicago) Reporter Paul Lee] The Financial Supervisory Service convened a foreign securities firm on the 7th as cases of violations of laws related to illegal short selling continued. As 80% of illegal short selling occurs at foreign securities firms, the move is aimed at ordering stricter internal control.
The FSS, presided over by Vice Chairman Kim Jung-tae, held a meeting with compliance officers at foreign securities firms to deliver cases of short selling violations and precautions to prevent illegal short selling, recommending an improvement in unreasonable business practices.
Earlier in June last year, the FSS set up a new public sales investigation team and imposed a fine of 8.7 billion won on illegal public sales this year alone after conducting an intensive investigation.
During the meeting, the FSS stressed the need for foreign securities firms to prevent violations of short selling by checking the process of ordering short selling, such as balance management and stock borrowing, and by maintaining internal control systems and training related executives and employees.
It also called for an internal control system to be checked, including the implementation of additional confirmation procedures for orders that are likely to violate the public sale.
The Financial Supervisory Service also plans to strictly check the appropriateness of securities firms' trust and handling of short stock selling orders during future investigations and inspections.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
