South Korea’s Financial Services Commission is aiming to finalize sanctions against five banks that sold Hong Kong H-index equity-linked securities (ELS) at its regular meeting next month, expected in late September. The commission’s subcommittee will review the case this week and assess final penalty amounts and possible reductions. If members fail to reach agreement, another subcommittee meeting will be held before the final session. The Financial Supervisory Service initially proposed total penalties of 1.4 trillion Korean won in February, but the commission returned the proposal in May for further clarification on the facts, applicable laws and legal principles. The revised proposal, resubmitted after additional review, reduced the total to 600 billion Korean won. Banks are seeking further cuts, arguing that the first six months after the Financial Consumer Protection Act took effect should not be included in penalty calculations. Some banks have already recorded the proposed penalties as reserves, meaning reductions could lead to excess amounts being recognized as other income. Authorities are also weighing recent losses in litigation over financial-sector sanctions, while concerns are growing that repeated reductions could weaken the penalties’ effectiveness.