Financial Supervisory Service Union: "Private Equity Fund Redemption Suspension Crisis Due to Financial Services Commission's Reckless Deregulation"

[Asia Economy Reporter Park Jihwan] The Financial Supervisory Service (FSS) labor union on the 25th claimed that "the fundamental cause of the recent large-scale redemption suspension incident involving Optimus Asset Management is the Financial Services Commission's reckless deregulation."

On the same day, the FSS labor union issued a statement criticizing, "The recent series of private equity fund incidents were a foreseeable disaster due to the relaxation of investment requirements, easing of approval conditions, and abolition of the fund review system."

The union pointed out that the Financial Services Commission's △relaxation of the qualified investor requirement for private equity funds from 300 million KRW to 100 million KRW △reduction of the minimum capital requirement for professional private equity collective investment business operators from 4 billion KRW to 2 billion KRW and then to 1 billion KRW △and the change from a prior fund review system to a post-registration system are the fundamental causes of the recent controversial private equity fund incidents.

The union sharply criticized, "The worst was changing the prior fund review system to a post-registration system, claiming the former was excessive regulation," adding, "An important mechanism to recognize and warn of risks in advance has disappeared."

Regarding Financial Services Commission Chairman Eun Sung-soo's recent mention of a full investigation of over 10,000 private equity funds in connection with the Optimus Asset Management redemption suspension, the union pointed out, "This is nothing but a shallow tactic to shift the blame to the FSS and cover up the Financial Services Commission's original sin." It was noted that the FSS Asset Management Inspection Division, consisting of only five teams and 32 people, would take decades to thoroughly inspect more than 10,000 funds.

The union stated, "Deregulation inevitably leads to accidents, but bureaucrats have so far been granted immunity for their policy decisions."

They also argued, "This incident should serve as an opportunity to fulfill the president's pledge to separate financial policy and supervisory functions," adding, "If the Financial Services Commission continues to control both financial policy and supervisory functions as it does now, the adverse effects of deregulation will inevitably continue to occur."

This content was produced with the assistance of AI translation services.