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[Alpha Biz=(Chicago) Reporter Paul Lee] In the case of stock price plunge and manipulation from Societe Generale Securities (SG), the difference settlement transaction (CFD), which was abused as a stock price manipulation channel, will be completely reorganized. Securities firms' CFD marketing will be banned altogether, and transaction requirements and disclosures will be strengthened in all directions.
According to the Financial Services Commission on the 29th, Kim So-young, vice chairman of the Financial Services Commission, held a meeting with the Financial Supervisory Service, the Korea Exchange and the Korea Financial Investment Association on the 26th, and finalized the 'plan to supplement the CFD regulation', which includes △ Enhancing information transparency △ Enhancing regulatory profits △ Strengthening risk management △ Enhancing the protection of individual professional investors.
According to the plan, securities firms' CFD sales practices, which have been under controversy for "overheated marketing," will be improved. All recommendations are prohibited, such as providing incentives in the course of sales to induce the designation of CFD individual investors. Securities firms are required to ensure that professional investor requirements are continuously met every two years.
If you do not have sufficient investment experience in high-risk financial investment products, investment in over-the-counter derivatives such as CFD will be restricted. Transaction requirements will also be strengthened (holding more than 50 million won in average balance at the end of the month → holding more than 300 million won). Non-face-to-face transactions will be abolished when designating individual investors and signing over-the-counter derivatives contracts, and investors will be identified face-to-face.
Strengthen risk management by including CFD in the credit limit of securities firms that were applied only to credit loans. It will be promoted as a measure to limit the short stock selling balance report and participation in paid-in capital increase to CFD selling investors. To that end, the Financial Services Commission will submit an amendment to the Capital Markets Act to the National Assembly in August.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
