Rep. Lee Yong-woo: "Costs Related to Non-performing Loans Increase, Securities Firms Must Strengthen Risk Management"
The estimated size of unsettled receivables from Contract for Difference (CFD) transactions related to eight stocks involved in the Soci?t? G?n?rale (SG) Securities-driven stock price crash amounts to 250 billion KRW.
According to data titled 'Estimated Size of CFD Unsettled Receivables Related to Eight Stocks by Securities Company,' submitted by the Financial Supervisory Service to Rep. Lee Yong-woo of the National Assembly's Political Affairs Committee on the 8th, as of the 4th of last month, the total size of CFD unsettled receivables across 12 securities firms was calculated at 252.1 billion KRW.
Securities Company A recorded the largest amount of unsettled receivables at 68.5 billion KRW. Including this company, six securities firms were found to have unsettled receivables exceeding 10 billion KRW. The securities firm with the smallest amount of unsettled receivables was estimated at 860 million KRW.
There were 13 securities firms providing CFDs, but one firm did not have any unsettled receivables. The relevant stocks include Samchully, Seoul Gas, Seonkwang, Daesung Holdings, Sebang, Dow Data, Daol Investment & Securities, and Harim Holdings.
The CFD products, identified as the main cause of the SG Securities-driven crash, generate unsettled receivables when investors fail to settle losses, and ultimately, the securities firms bear the burden. This is expected to lead to a decline in the securities firms' future earnings.
Rep. Lee Yong-woo emphasized, "Costs related to CFD unsettled receivables due to the SG incident are expected to increase," adding, "Securities firms must strengthen their risk management efforts."
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