Financial Supervisory Service Union: "Private Equity Fund Full Investigation Ineffective... Financial Services Commission Eager to Avoid Responsibility"

FSS Union Criticizes FSC Again
"FSC Avoids Responsibility, Evasion-Style Response,
Normalization of Eased Regulations Must Come First"

[Asia Economy Reporter Minji Lee] The Financial Supervisory Service (FSS) labor union has once again launched harsh criticism at the Financial Services Commission (FSC). They stated that the FSC's recently announced "Comprehensive Survey Plan on Private Equity Funds" is nothing more than an ineffective, responsibility-evading measure by the FSC.

On the 6th, the FSS labor union issued a statement saying, "What the FSC should do is not a showy administrative action like a comprehensive survey, but to amend regulations to normalize private equity fund oversight," and criticized, "The FSC caused the private equity fund scandal and is still occupying the control tower while shifting the burden to other institutions."

[Image source=Yonhap News]

Previously, the FSC announced that it would complete a comprehensive survey within three years on about 10,000 private equity funds and 230 private fund management companies. The plan involves a two-track inspection: cross-checking data among management companies, distributors, custodians, and administrative service companies, as well as on-site investigations of private fund managers. The dedicated inspection team will consist of about 30 employees from the Korea Deposit Insurance Corporation, Korea Securities Finance Corporation, Korea Securities Depository, and the FSS.

In response, the FSS labor union argued, "The plan where employees seconded from the Korea Deposit Insurance Corporation and others handle document inspections and the FSS conducts detailed examinations only when abnormalities are detected is a typical responsibility evasion with the FSC completely absent."

The union further pointed out, "Since document inspections alone will take three years, and considering that private equity funds typically liquidate within 3 to 5 years, it is obvious that those involved will have already disappeared, raising doubts about the preventive effect of the comprehensive survey." Moreover, they stated, "Banks, blinded by fee income, deceive customers by selling high-risk products as safe assets, so what meaning does a comprehensive survey have?" and emphasized, "It is more important to amend regulations to normalize the relaxed rules related to private equity funds."

The union also criticized the fact that none of the senior officials at the FSC have directly invested in private equity funds, calling it "beyond common sense." They said, "It is irrational that while the FSC has relaxed private equity fund regulations under the pretext of fostering venture capital, none of the senior officials at the FSC have invested in private equity funds," adding, "This is a double blow to the victims."

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