• SK FSS disciplined Korea Investment Holdings and Korea Investment & Securities.
• Document dated 26 November 2024, received from FSS 27 November 2024, summarized on 29 November 2024.

Korea Investment Holdings

• Imposed KRW 72mn fine for negligence against the firm, issued a caution against one executive/employee, for violating the duties to submit reports and disclose information on internal transactions among subsidiaries under the Financial holding companies act.
• Issued three notes for management concerning the need to conduct regular stress tests for real estate project financing (PF), reflect/expand risk management indicators.
• To improve performance indicators of the head of Ethics Management Support Office.
• Required improvements for two items, including improving the method of preparing the minutes of compensation committee meetings, establishing compensation distribution standards for employees/executives with concurrent positions.

Korea Investment & Securities

• Issued a caution, imposed KRW 170mn penalty surcharge, KRW 950.5mn fine for negligence against the firm; issued a caution against 4 executives/employees.
• Issued a reprimand against 4 executives/employees, indicated illegal/unfair matters for retirees equivalent to a caution against 5 staff and a reprimand against 3 staff.
• Reduced salary of 4 staff for violating ban on extending credit to executives of affiliates, and limit on inclusion of affiliates-issued securities in investment management assets.
• For violating the ban on transactions, profit seeking between proprietary assets, the duty to notify general investors of major conflicts of interest, the ban on guaranteeing payment for corporate bills, the ban on providing unfair financial benefits.
• For violating the ban on recommending high-risk debt securities to general investors, the duty to report an auxiliary business, the ban on using unfair methods to conceal investors' illegal transactions, in addition to the duty to manage conflicts of interest.
• Issued 8 notes for management re strengthening the system of determining interest rates for credit extension, internal control re short selling, risk management for alternative investments, procedures for operating the risk management committee.
• In addition, strengthening credit limit management and the system of auditing the IT sector, improving commission payment structures in the event of forming business partnerships with investment advisors and analysis of liquidity crisis situations.
• Required improvements for 15 items, including calculation and application of interest rates for credit extension, internal control re investment trust asset management.
• Calculation methods for performance-based compensation including real estate PF, clarification of agenda for the risk management working committee, same-person credit limit management methods, internal regulations concerning acquired stocks.
• Ex-post management of security vulnerability analysis and assessment, establishment and operation of computer data protection measures, fault management procedures.