South Korea's Financial Supervisory Service decided to impose fines in the low-to-mid 1 trillion won range, reduced from the previous level, on 5 banks that sold equity-linked securities (ELS) tied to the Hong Kong H Index (Hang Seng China Enterprises Index).

The watchdog on Feb. 12 convened a third sanctions review committee meeting and tabled and reviewed proposed measures against banks for mis-selling Hong Kong ELS. It set combined fines of 1.3 trillion to 1.4 trillion won for 5 banks, including KB Kookmin, Shinhan, Hana, NH Nonghyup and SC First Bank.

That is about 500 billion to 600 billion won lower than the combined fines of about 2 trillion won that had been notified in advance.

The level of institutional sanctions was also lowered by 1 step, from a business suspension to an institutional warning. Sanctions affecting the status of executives and staff were also revised and approved to reduce them by 1 to 2 levels.

The sanctions review result will be finalized after a vote by the Financial Services Commission.

The watchdog said adjustments were made to the scope and level of sanctions in consideration of circumstances including banks' active efforts to address the issue after the fact and measures to prevent a recurrence.