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[Alpha Biz=(Chicago) Reporter Paul Lee] The Financial Supervisory Service confirmed that the former executive in charge of the difference settlement transaction (CFD) of Kyobo Securities committed breach of trust while in office. Kyobo Securities is the first securities company to introduce CFD to the domestic market in 2015 and has the largest balance of CFD transactions.
According to the financial investment industry on the 26th, the Financial Supervisory Service confirmed that an executive in charge of CFD at Kyobo Securities committed a business breach of trust by transferring marketing money from a foreign securities firm, the other party to the back-to-back transaction, to Kyobo Securities in connection with the CFD business, to the developer of the local CFD trading system.
The Financial Supervisory Service is trying to figure out the circumstances of the act and provided the prosecution with reference to the investigation. The Financial Supervisory Service is also checking the payment process by confirming cases in which foreign securities firms paid large fees to CFD system developers.
The back-to-back trading contract is a method of over-the-counter derivatives trading with other trading partners (mainly foreign financial firms) on almost the same terms as derivatives issued by securities firms. Domestic securities firms sign CFDs, which are over-the-counter derivatives, with customers, while re-signing on similar terms with foreign securities firms such as SG Securities for risk hedging. Some large companies that can afford equity may choose to digest themselves.
"The FSS audit confirmed that there was a breach of trust and submitted all related data to the supervisory authorities," a Kyobo Securities official said.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
