(Bloomberg) -- South Korean prosecutors have indicted BNP Paribas SA for allegedly violating short-selling rules, according to people with direct knowledge of the matter, the latest development in the country’s crackdown on such trades.

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The French bank was charged last week with violating local capital markets law, according to the people, who requested anonymity discussing a private matter. The Seoul Southern District Prosecutors’ Office earlier this month indicted a global investment bank and a global hedge fund for conducting illegal short selling, without naming them, according to a spokesman at the office.

Regal Funds Management Pty Ltd., one of Australia’s largest hedge funds, said last week it was indicted, along with a former employee, for an alleged violation of securities trading regulation in 2019. Regal denied the allegations and said it is “considering its rights under South Korean law.”

BNP Paribas, the prosecutors’ office, and Korea’s Securities and Futures Commission all declined to comment.

The indictment came after Bloomberg News reported in December that Korean financial regulators had imposed a total fine of 26.5 billion won ($19 million) on BNP Paribas, its domestic brokerage unit and HSBC Holdings Plc for naked short selling. HSBC’s Hong Kong unit and three of its traders were indicted by Korean prosecutors on allegations of illegal short selling in March, with the bank vowing at that time to defend its position “vigorously.”

The financial industry has been under increased scrutiny in Korea, which outlawed short selling in its stock market a year ago. Banks including Credit Suisse Singapore Ltd., as well as hedge funds such as Segantii Capital Management Ltd. and Jane Street Group LLC have also faced probes and fines as part of the crackdown.

Korea’s top financial regulator said last month that it plans to lift the ban on short selling at the end of March and will ensure that necessary rule revisions are in place by then. The objective is to allow the strategy across all equities, not just in a limited number of stocks, Financial Services Commission Chairman Kim Byoung-hwan said at that time.

--With assistance from Denise Wee and Michael Patterson.

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