NH Investment & Securities dropped from NPS global bonds trading list

NH Investment & Securities was the only company to be excluded from the 2020 National Pension Service (NPS)’s global bonds trading securities firms, the Yonhap infomax reported on Wednesday.

According to a report released by the NPS on June 4, NH Investment & Securities was the only company to be eliminated from the list of 62 trading securities firms as of the end of the first quarter of this year.

Hana Financial Investment was new on the list. Mirae Asset Daewoo and Shinhan Investment maintained their status as trading securities firms.

The NPS selects trading securities firms twice a year – in the first and second half. They are divided into domestic stocks, domestic bonds, global stocks, global bonds and short-term fund sectors. If a company is excluded from the list, that status is usually maintained for half a year.

As NH Investment & Securities was removed from the list as of the end of the first quarter, it is likely that the company will not be on the list in the second quarter.

The removal was reportedly due to disciplinary action by the Financial Services Commission (FSC). 

The FSC imposed fines on the company last November, saying it had violated a regulation that bans providing credit to its global affiliates.

There are no items related to observance of the law in the NPS’s criteria for selecting global bond trading securities companies disclosed by the NPS in April 2018. “The criteria for selection do not have to be disclosed according to the guidelines,” a NPS Service official said. “We frequently announce change of the criteria for domestic assets but for global assets we do not.”

In the criteria for selecting domestic bond trading securities firms, the supervisory agency’s measures can take five points out of 100 points for each type of transaction. If NH Investment & Securities is confirmed to be penalized by the FSC, this could have affected the decision.

“It is difficult to comment on the outcome of the selection as the company is in a position to be evaluated by the NPS,” an NH Investment & Securities official said.

Korea Investment & Securities, the only one excluded from the list of domestic stocks and bond trading securities firms as of the end of the first quarter, was also reportedly affected by the Financial Supervisory Service (FSS)’s warning last year regarding unfair loans of issued note. 

As of the end of the first quarter of this year, the NPS has invested a total of 34.7 trillion won ($28.5 billion) in global bonds. The ratio of investments to total assets is 5 percent. (Reported by Hyewon Chang)