South Korea's financial regulator has slapped a record high fine on Goldman Sachs Group's subsidiary for violating the country's short-selling rules.

The Financial Services Commission said Wednesday, it decided to impose a seven-point-five billion won fine on Goldman Sachs International for its short selling activities without securing underlying assets.

A short selling transaction was made by Goldman Sachs in late May, but about one-point-three million shares worth some six billion won were not delivered for settlement until two days later.

At that time, Goldman Sachs issued a sell order of stocks worth 40-point-one billion won without borrowing the stocks, a practice known as naked short selling. 

Short selling, which is legal in South Korea, refers to the sale of borrowed shares in the hope of making a profit from a price fall by buying the shares back at a lower price.

Naked short selling, which is not legal, is the practice of short selling without first borrowing shares.