The Financial Supervisory Service's Financial Dispute Mediation Committee acknowledged the 'Discovery US Fintech Global Bond Fund' was sold improperly, and decided that the Industrial Bank of Korea would compensate 80% of the damages, while Shinyoung Securities would pay 59%, it announced on the 23rd.
The FSS explained that it conducted the mediation due to newly identified matters that could influence this dispute mediation, following additional inspections of Discovery Asset Management. The committee had previously recognized allegations of improper sales of the Discovery Fund in May 2021 and decided to compensate investors for 40% to 80% of their losses.
The FSS increased the weighting ratio from the previous 20% to a maximum of 30% based on newly confirmed circumstances regarding additional asset impairment of the fund for the Industrial Bank of Korea. The FSS stated that it considered newly confirmed circumstances, including the additional asset impairment of the fund, which were not reflected during the committee's session regarding the Industrial Bank of Korea, and the lack of attention to the risk checks related to the fund's risks. Shinyoung Securities, having a relatively smaller scale of damage, was subject to a 25% application.
This committee decision concerns compensation issues for two investors. In this dispute case, if the parties, including the applicants and the Industrial Bank of Korea and Shinyoung Securities, accept the mediation proposal within 20 days of submission, the mediation will be established. The same legal effect as a reconciliation in court applies.
The FSS plans to ensure that self-regulation is conducted promptly according to the committee's compensation standards for remaining investors affected. As of the previous day, the number of remaining dispute mediation cases for the Industrial Bank of Korea and Shinyoung Securities stood at 35 and 7, respectively. However, the FSS noted that investors who concluded compensation with the sellers based on the 2021 compensation proposal would not receive additional compensation.
An FSS official said, 'If the subsequent mediation process proceeds smoothly, the damage relief for investors suffering from delays in redeeming the fund will come to an end.'