South Korea’s financial watchdog has recommended imposing a fine of at least 10 billion won ($7.67 million) each on HSBC Holdings and BNP Paribas for naked short selling, Bloomberg News reported on Wednesday citing two people familiar with the matter.

The five-member commission led by Financial Services Commission (FSC) Vice Chairman Kim So-young discussed the fines during a meeting on Wednesday but could not reach a conclusion, the report said, adding that the final amount may change during discussions later.

FSC is a government agency with the statutory authority over financial policy and regulatory supervision.

Naked short-selling of stocks - in which an investor short sells shares without first borrowing them or determining they can be borrowed - is banned by the Capital Markets Act in South Korea.

“We are investigating financial companies involved in naked short-selling, but we cannot comment whether fines have been finalized,” an FSC official said.

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HSBC and BNP Paribas did not immediately respond to Reuters’ request for comment.

Last month, South Korea reimposed a full ban on short-selling until the end of June 2024 to create a “level playing field” for retail and institutional investors.