South Korea's Financial Supervisory Service (FSS) will tighten regulations to prevent the improper selling of high-risk financial products, following major losses in equity-linked securities associated with Hong Kong's H Index, Yonhap News reported Wednesday.

Banks will be advised to sell such products only through licensed staff at designated outlets and enhance internal controls to prevent future mishaps, the report said.

The move follows 4.6 trillion won in losses at five banks, with compensation already underway for affected investors, it said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)