Securities firms post record $1.35 bil. profit from overseas stock brokerage

The headquarters of the Financial Supervisory Service in Seoul, July 30, 2021 / Korea Times photo by Bae Woo-han

Major securities companies here have raised a record high commission income of nearly 2 trillion won ($1.35 billion) from overseas stock brokerages this year, the state financial regulator said Friday, urging the firms to refrain from excessive promotion of investment in foreign stock markets.

The top 12 securities firms reported a combined profit of 1.95 trillion won in commission income from overseas stock brokerages in the first 11 months of this year, already surpassing their annual total of 1.25 trillion won in 2024, which marked an all-time high, according to the Financial Supervisory Service (FSS).

The 2025 figure is also more than three times higher than the 581 billion won profit recorded in 2023.

The FSS said the securities firms raised record profit from overseas stock trading but nearly half of individual investors recorded losses from overseas stock accounts due to increased volatility in global markets.

From January to October, retail investors saw a combined loss of 373.5 billion won from overseas securities.

Local securities firms have aggressively attracted investors for foreign stock trading, but have not provided sufficient information on risks associated with overseas investment, such as exchange rate fluctuations and differences in tax systems, the FSS said, vowing stern measures against any irregularities in the companies' activities related to overseas stock trading.

Securities firms may face serious penalties, including suspension of business operations for foreign stock trading, should they be found to have provided exaggerated advertisements, insufficient explanations of investment risks or investment recommendations unsuitable for investors' risk tolerance levels, the regulator stressed.

The FSS said it has begun inspections on a number of securities firms to see if they have taken sufficient investor protection measures, and that it will also push for measures to ban business practices that induce individual investors' excessive investment in overseas securities.