South Korea's top financial regulator on Wednesday imposed a three-month partial business suspension and a fine of 100 million won ($92,000) on the local unit of Australia-based asset manager Macquarie Funds Group for engaging in illegal bond trading.

In November, the Financial Supervisory Service, the financial overseeing body, put forth the penalty for Macquarie Investment Management Korea Co., formerly known as ING Investment Management Korea, accusing it of involvement in "parking" bonds at brokerages in 2012 and 2013, or not immediately recording bond purchases on the balance sheets of funds under management.

On Wednesday, the Financial Services Commission endorsed the penalty, saying that it will notify the Macquarie's unit of its decision in two to three days. the company's business in new discretionary investment contracts will be suspended immediately, it said.

The business practice has been rampant here as fund managers can buy bonds in advance exceeding the limit through verbal agreements with brokerages and artificially manipulate their funds' returns.

When bond prices are on the rise, both asset managers and brokerages can rake in profits, but brokerages face the risk of suffering losses when bond yields surge.

Macquarie Funds Group took over ING Investment Management Korea from ING Group in 2013.

The FSC said it also approved FSS's punitive decisions on Shinyoung Securities Co., Kiwoom Securities Co. and five other brokerages for their involvement in the malpractice. (Yonhap)