‘SHV‘ and ‘BIL‘ are at the top of securities firms’ trading volume… Korea Financial Investment Association sends an official letter to member companies asking them to be cautious
Panoramic view of Yeouido, stock market view
[촬영 류효림]
(Seoul = Yonhap News) Reporter Song Eun-kyung = Trading by ‘simple people’ who only buy and sell overseas short-term bond exchange-traded funds (ETFs) with little risk of loss and only take cash from securities company events has recently become noticeable.
Inside the industry, it is pointed out that securities firms are aiding and abetting ‘cherry pickers’ to increase trading volume and increase market share.
According to the financial investment industry on the 21st, since last month, some large securities companies have been holding events to pay customers cash in proportion to the transaction amount.
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Although the specific conditions are different for each securities company, it is generally an event that pays up to several million won depending on the daily transaction amount.
Some investors are buying and selling short-term bond ETFs with small price volatility and small bid-ask spreads to meet conditions and pocket cash. YouTube, blogs, and online communities also share ‘tips for filling transaction amounts’ using events like this.
At this time, the mainly used ETFs are ‘iShares Short Treasury Bond ETF’ (SHV) and ‘SPDR Bloomberg 1-3 Month T-Bill ETF’ (BIL). The underlying assets are U.S. Treasury bonds with a maturity of less than one year or less than 1 to 3 months.
Although it is a trading pattern that clearly deviates from the purpose of the event, some securities companies seem to be ignoring it.
Early last month, KB Securities restricted online purchases after receiving notice from a local broker in the U.S. that signs of abnormal transactions were discovered in stocks such as ‘SHV’ and ‘BIL’, but other large companies are still maintaining similar events. Until recently, it was discovered that U.S. short-term bond ETFs frequently appeared among the top trading volume stocks at these securities firms.
Securities industry officials say that the abnormal phenomenon of a surge in U.S. short-term bond ETF trading volume occurred every year-end and continued for two consecutive years from last year to this year.
An official from a securities company said, “Events where cash is given depending on the transaction amount are mainly concentrated in September and October, and this is the time when securities companies settle the year’s performance ahead of executive appointments.” He added, “Securities companies are trying to prevent customers from ‘using cash’. “Isn’t it like he was aiding and abetting it even though he knew about it?” he said.
As cases like this became more frequent, the Korea Financial Investment Association sent an official notice to its member companies early this month.
According to the Financial Services Commission’s ‘Financial Investment Business Regulations’, the scope of money, goods, and benefits provided by securities companies to investors in connection with the conclusion of investment sales and brokerage contracts must not be contrary to the level of ordinary understanding of the general public.
The Korea Financial Investment Association said, “If the size of the economic value of the benefit provided exceeds the level commonly understood by the general public due to reasons such as not setting a cumulative limit (offering prize money) to the same person, it may be judged to be an unfair property advantage.” “There is,” he pointed out.
He continued, “If property benefits in proportion to the transaction amount are repeatedly provided, which may lead to frequent and excessive trading by investors, there may be a possibility of a conflict of interest between the company and the investor.”
norae@yna.co.kr
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2024/10/21 06:03 Sent
