It has been found that local financial companies are continuing with internal transaction for fund sale. Under the circumstances, the Financial Services Commission is going to implement the so-called 50% rule as soon as possible. It can be defined as a compulsory restriction to prevent excessive internal transaction.
According to industry sources, no less than eight out of the 16 financial companies with a fund amount of at least one trillion won recorded an increase in internal transaction within the past one year. The pace of growth has not slowed down despite the financial authorities’ announcement to put a brake on the practice.
It was Hanwha Investment & Securities that posted the highest rate of increase. The ratio of Hanwha Asset Management’s funds in it surged from 16.9% to 36% between late 2011 and the end of November last year. The growth rate amounted to over 10% for Kookmin Bank and the Industrial Bank of Korea during the same period, too. In the banking sector, Shinhan Bank was the only one whose rate of increase dropped with respect to its subsidiary, Shinhan BNPP Asset Management.
In the meantime, the percentage dropped for most securities companies except for Mirae Asset Securities. Samsung Securities’ ratio of sale of Samsung Asset Management’s funds decreased from 66.4% to 56.6% and Korea Investment & Securities’ percentage declined from 50.1% to 44.2%. In the insurance sector, Samsung Life Insurance’s ratio fell slightly from 74.2% to 73.8% during the period whereas Mirae Asset Life Insurance’s figure increased from 87.7% to 91.8%.