Financial Supervisory Service Comprehensive Inspection Postponed Again...Private Equity Fund Full Survey to Proceed as Scheduled

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[Asia Economy Reporter Ji-hwan Park] The Financial Supervisory Service (FSS) has recently decided to postpone the comprehensive inspection schedule for financial companies, which had already been delayed until the end of August due to the resurgence of COVID-19. However, the full-scale investigation of private equity funds will commence this week, considering that it does not require a large workforce.

According to financial authorities on the 30th, the FSS originally planned to conduct comprehensive inspections within this month but postponed the schedule as COVID-19 cases surged and quarantine measures were tightened. The decision was based on the assessment that it would be difficult to carry out comprehensive inspections while the nationwide social distancing level remains at Level 2.

The government decided to raise the quarantine level in the metropolitan area to Level 2.5, equivalent to Level 3, from midnight today until midnight on the 6th of next month. The FSS stated that the timing of the comprehensive inspections will be determined in accordance with the COVID-19 quarantine situation. Currently, Hana Financial Group, Hana Bank, and Kyobo Life Insurance are subject to the comprehensive inspections.

However, the full-scale investigation of approximately 10,000 private equity funds and around 230 private specialized asset management companies will proceed as scheduled starting this week. Unlike comprehensive inspections that require a large number of personnel, the average number of inspectors per asset management company is about 5 to 6, so on-site investigations can be conducted without difficulty.

The recent series of large-scale redemption suspensions involving private equity funds, from Lime Asset Management last year to Optimus Asset Management recently, as well as the fact that this is an important investigation schedule that has been prepared for nearly two months since early last month, also influenced the decision.

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