FTC investigating securities companies for price fixing

Finance

Published: 21 Jun. 2023, 18:01

FTC investigating securities companies for price fixing

Offices of brokerage companies in Yeouido, western Seoul [YONHAP]

Korea’s antitrust agency has launched an investigation into local securities companies over allegations that they are involved in price fixing in determining commission rates for their financial products.

The Fair Trade Commission (FTC) dispatched on-site investigators on Tuesday to the offices of Samsung Securities, Meritz Securities, Kiwoom Securities and KB Securities, seizing documents on decisions related to interest rates for margin loans and brokerage fees.

The probe could possibly spread to other brokerage companies as local firms have been blamed for charging rates of 9 percent or above for margin loans, a type of lending that uses the customer's securities in their account as collateral.

The move came as President Yoon Suk Yeol called for strengthened oversight of financial and telecommunication companies, saying that the companies' excessive profit-taking could translate into financial burdens on the public.
“Telecommunications and financial services are indispensable for people’s livelihoods,” Yoon said in February.
“If fair competition is not guaranteed in the sectors, the damage will directly affect people on the street,” he said.

Following the February remarks, the FTC began an on-site inspection of six major banks — KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup and Industrial Bank of Korea — to verify whether they engaged in collusion or price-fixing.

In May, the FTC took aim at insurance companies by launching an investigation against Hyundai Marine & Fire Insurance, DB Insurance, Meritz Fire & Marine Insurance and Heungkuk Fire & Marine Insurance.

The regulator was probing whether they colluded in deciding coverage standards for their health insurance plans.

BY PARK EUN-JEE, JEONG JIN-HO [park.eunjee@joongang.co.kr]