Watchdog cracks down on China-linked notes

Ongoing probe: Screens showing the Hang Seng stock index outside Exchange Square in Hong Kong. South Korean authorities are attempting to determine if there is any wrongdoing over the sale of equity-linked securities that are tied to the Hang Seng. — Reuters

SEOUL: South Korea’s regulator is launching a wider probe into local banks and brokers that sold exotic notes linked to Chinese stocks amid concerns that the securities may saddle investors with heavy losses.

Authorities have started investigating 12 institutions to determine if there was any wrongdoing over the sale of equity-linked securities that are tied to the Hang Seng China Enterprises Index (HSCEI), according to a statement from the Financial Supervisory Service (FSS).