How much were the banks and securities firms fined for mis-selling Hong Kong H Index-linked ELS?

The Financial Services Commission finalized combined penalties of 370 billion won against seven banks and six securities firms. The seven banks accounted for 361 billion won of the total.

Why did investors in Hong Kong H Index-linked ELS suffer losses in early 2024?

The products’ returns were linked to the performance of underlying equities, including a stock index. Buyers suffered heavy losses when Hong Kong’s H Index plunged in early 2024.

What information did regulators say banks failed to provide to customers buying H Index-linked ELS?

The regulator said banks did not provide all necessary information about the products, including their contract terms and associated risks. It ordered banks to compensate customers for part of the losses incurred.

Regulator finalizes $276 mil. penalties on banks, securities firms over mis-selling of HK-tied derivatives

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Summary

The Financial Services Commission finalized 370 billion won in penalties Wednesday against seven banks and six securities firms for mis-selling equity-linked securities tied to Hong Kong’s H Index. The total was reduced from an initial 1.4 trillion won proposed for five banks after the regulator ordered further review of legal issues. Buyers suffered heavy losses when the index plunged in early 2024, and the regulator ordered banks to compensate customers for part of their losses.

Key Facts

The seven lenders received 361 billion won of the finalized penalties.
Banks and brokerages had sold 19.3 trillion won worth of H Index-linked ELS products since 2021.
KB Kookmin Bank sold 8.2 trillion won of the products, the largest amount among the named banks, followed by Shinhan Bank at 2.37 trillion won, NH Nonghyup at 2.13 trillion won and Hana Bank at 2.11 trillion won.
KB Kookmin Bank received the largest penalty at 173 billion won, followed by Hana Bank at 92.4 billion won and Nonghyup at 40.1 billion won.
The regulator said banks failed to provide customers with all necessary information, including contract terms and associated risks.

By Yonhap

Published Nov 4, 2026 5:06 pm KST

Officials work at the Financial Services Commission in Seoul, Sept. 9. Korea Times photo by Hong In-kee

Seven banks and six securities firms were slapped with a combined 370 billion won ($276 million) in penalties by the financial regulator Wednesday over their mis-selling of equity-linked securities (ELS) products tracking Hong Kong's H Index.

The amount is a sharp cut from the initial 1.4 trillion-won fine on the five lenders — KB Kookmin Bank, Shinhan Bank, Hana Bank, NH Nonghyup and SC Korea — which had already suffered massive losses as they had compensated customers over the mishap, according to the Financial Services Commission (FSC).

Seoul's financial regulator finalized the penalty after ordering the Financial Supervisory Service (FSS), the country's financial watchdog, to further review some legal issues.

Earlier, the FSS had proposed a 600 billion-won penalty on the banks.

The regulator imposed 361 billion won in penalties on the seven lenders.

Banks and brokerages had sold a combined 19.3 trillion won worth of ELS products, tracking Hong Kong's H index since 2021, according to earlier data from the watchdog.

KB Kookmin Bank sold the largest amount of HK-tied ELS products worth 8.2 trillion won, followed by Shinhan Bank with 2.37 trillion won, NH Nonghyup with 2.13 trillion won and Hana Bank with 2.11 trillion won.

ELS refers to hybrid securities whose returns are linked to the performance of underlying equities, including a stock index.

In early 2024, HK-tied ELS buyers suffered massive losses as Hong Kong's H index plunged.

KB Kookmin Bank was slapped with the largest amount of penalties at 173 billion won, followed by Hana Bank with 92.4 billion won and Nonghyup with 40.1 billion won.

The financial regulator ordered banks to compensate part of the losses incurred by customers as they failed to provide all necessary information to consumers about products, including contract terms and associated risks.

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