Korea Investment & Securities loses trust of retail investors

Korea Investment & Securities loses trust of retail investors

Korea Investment & Securities’ headquarters on Yeouido, Seoul / Yonhap

By Lee Min-hyung

Korea Investment & Securities is rapidly losing market confidence amid growing criticism from private investors for inappropriate short cells that lasted more than three years until May 2020.

Earlier this year, following sales here, top brokerage firms “wrongly” shorted more than 140 million shares of 938 companies for three years and three months from February 2017, with a billion won (1 billion won). He was fined ($ 769,000). The company has not notified the Korea Exchange of the fact that the transaction is not selling well.

But private investor anger peaked after the company said it was just an employee’s mistake. They increased criticism of the company, saying authorities should increase punishment for what they describe as “unfair” trading practices by institutional investors.

“Large investment companies make huge profits of over 1 trillion won each year, but the penalty of 1 billion won is too small even if the authorities consider it a mistake of the company,” said a private investor here.

Individual investors, institutional and foreign investors can only benefit from the dominant influence of the market, so through a review of the rules governing stock sales, a competitive arena in the local stock market. Has long sought the need to level.

However, the government is not accepting requests from private investors because some form of short cell is accepted in the stock markets of many developed countries.

After the recent dispute accused South Korea’s investment securities, financial authorities and the Korea Exchange held a meeting to improve policy and end illegal and unsold transactions. “By imposing stricter sanctions on financial institutions that violate short-term sales rules, promises should come true,” said another private investor.

The data of Rep. Yoon Chang-hyun, the power of the ruling party, further damaged the image of the investment company.

Between 2016 and the first quarter of 2022, nine major South Korean investment companies reported a total of 98 internal ethical violations. According to lawmakers, Korean investment securities account for almost one-third of the cases and the largest proportion.

However, amid concerns about the outflow of foreign capital, the government cannot make significant changes to existing short-term sales policies.

“We can make some small changes to protect investors from illegal short sales, but at this point the stock market is still sluggish and there are concerns about foreign capital outflows, so the government Is unlikely to take strong steps against short sales. It is selling, “said industry insiders.


Credit/Source : KoreaTimes

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