Postponement of FSC Comprehensive Inspection Again Due to COVID Resurgence "Concerns Over Private Equity Fund Investigation Too"

Yoon Seok-heon, Governor of the Financial Supervisory Service, attended the plenary session of the National Assembly's Political Affairs Committee on the 29th and is seen talking with officials. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kangwook Cho] Due to the resurgence of the novel coronavirus infection (COVID-19), the Financial Supervisory Service (FSS) will postpone the comprehensive inspections again. The schedule for the comprehensive inspections, originally planned for the end of this month, has been postponed from the first half to the second half of the year and is currently undecided.

According to the financial sector on the 30th, the FSS decided to delay the comprehensive inspections, which had already been postponed until the end of this month, once more.

This is because the government decided to raise the quarantine level in the metropolitan area to 2.5, equivalent to level 3, from midnight today until midnight on the 6th of next month.

Previously, the FSS planned comprehensive inspections for 17 financial companies this year. They had detailed plans by sector, including 3 financial holding companies, 3 banks, 3 securities firms, 3 life insurance companies, 3 non-life insurance companies, 1 credit-specialized company, and 1 asset management company. However, no inspections were conducted in the first half of the year due to COVID-19.

So far, Hana Financial Group, Hana Bank, and Kyobo Life Insurance are among the targets for comprehensive inspections.

However, due to the resurgence of COVID-19, the government raised social distancing to level 2 in Seoul and Gyeonggi Province on the 16th, and accordingly, FSS Governor Yoon Seok-heon postponed the comprehensive inspections until the end of August at the executive meeting on the 18th. Subsequently, on the 23rd, social distancing level 2 was expanded nationwide, and from today, level 2.5 has been applied.

An FSS official said, "We have established a principle to decide the timing of comprehensive inspections in connection with the COVID-19 quarantine situation," adding, "It is inevitably burdensome to proceed with comprehensive inspections, which require a large number of personnel and a long period, during the phase of COVID-19 resurgence."

Because of this, questions have been raised in the financial sector as to whether the comprehensive inspections will not be realized at all this year due to the repeated postponements.

However, the FSS maintains its position to proceed as scheduled with the main investigation of about 10,000 private equity funds and around 230 private specialized asset management companies starting this week. This decision also considered the large-scale redemption suspension incidents involving Lime Asset Management and Optimus Asset Management private equity funds, as well as the fact that this is an important investigation schedule that has been prepared for nearly two months since early last month.

Nevertheless, some express concerns that this too might be canceled due to the trend of strengthening guidelines from quarantine authorities.

A financial sector official said, "Unlike comprehensive inspections that require a large number of personnel, the number of inspectors per asset management company is on average 5 to 6, so on-site investigations are possible, but given the current atmosphere, it is questionable whether the investigations can be properly conducted."

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