[2020 Asia Fund Awards] Yukwangyeol, Senior Deputy Governor of FSC, "Industry Needs Diverse and Innovative Public Offering Funds"

Congratulations on the 11th Asia Fund Awards

Yoo Kwang-yeol, Senior Deputy Governor of the Financial Supervisory Service

[Asia Economy Reporter Park Jihwan] "When the interests of the company and customers conflict, a sales principle prioritizing the investor's position must be established."

On the 13th, Yoo Gwang-yeol, Senior Deputy Governor of the Financial Supervisory Service, stated in his congratulatory speech at the 11th Asia Fund Awards, "When asset management companies, as fiduciaries entrusted with customers' assets, fulfill their so-called Fiduciary Duty by doing their best for investors, they can earn investors' trust and market confidence."

As of the end of last year, the assets under management by domestic asset management companies reached 1,137 trillion KRW, with 292 companies operating. The investment regions and targets are also diversifying, including overseas fund setups of 199 trillion KRW and alternative investment funds such as real estate and special assets totaling 192 trillion KRW.

Senior Deputy Governor Yoo pointed out, "Despite the growth of the asset management industry, issues such as losses from derivative-linked funds (DLF) and large-scale redemption suspensions by Lime Asset Management have raised concerns and criticisms about whether financial companies have been negligent in risk management and internal controls, and these concerns have not been fully resolved."

He added, "The industry must solidify risk management and internal control functions and strengthen self-inspections to prevent similar incidents from recurring in the future. The Financial Supervisory Service will also make every effort to protect financial consumers by investigating the causes of these incidents and focusing on institutional improvements."

He also mentioned the current situation where domestic fund products have not established themselves as means for the public to prepare for retirement and accumulate wealth in the aging society. Senior Deputy Governor Yoo said, "It is necessary for the asset management industry to launch diverse and innovative public funds so that funds can become an important means of wealth accumulation for the public."

Finally, he emphasized, "In a situation where volatility in domestic and international financial markets is increasing, the task of providing stable income sources to the public and securing growth drivers for the domestic economy is both a challenge and a destiny faced by the asset management industry. If the industry arms itself with thorough preparation and pioneering spirit, I believe there will be an opportunity for the domestic fund industry to take a step forward as a global advanced industry."

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