Financial Supervisory Service Conducts On-Site Inspection of Shinhan Investment Corp. for 'ETF Management Loss'

Loss of Approximately 130 Billion KRW in Gift Transactions Separate from LP Role

On the 14th, the Financial Supervisory Service (FSS) commenced an on-site inspection of Shinhan Investment Corp. The inspection aims to investigate the circumstances surrounding a loss of approximately 130 billion KRW incurred during futures trading related to exchange-traded funds (ETFs).

According to financial authorities, the FSS began the on-site inspection of Shinhan Investment Corp. from that day. The FSS stated that it will examine the causes of any illegal activities and the adequacy of internal controls.

Between August 2 and the 10th of this month, Shinhan Investment Corp., acting as a liquidity provider (LP) for ETFs, suffered a loss of about 130 billion KRW due to on-exchange futures trading that deviated from its intended purpose during fund management.

It is reported that, beyond its LP role, the company engaged in proprietary trading to gain additional profits through futures trading, which resulted in the large-scale loss.