The balance of derivatives-linked securities (DLS) in South Korea, which are not principal-protected, plunged to KRW12.7 trillion (US$10 billion) as at the end of June 2020 from its record high of KRW18.4 trillion a year prior as a result of the mis-selling crisis.
South Korean investors continue to suffer damage from DLS with basic underlying assets like funds, urging the regulators to further identify risk factors and take countermeasures, stated the Financial Supervisory Service (FSS) in a report released on 10 February . The watchdog aims to implement a series of new DLS-related regulatory guidelines in 2021, according to the report. New issuance is projected to largely decrease in the near future due to the restrictions of trust products sale
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