Financial Supervisory Service Temporarily Postpones Comprehensive Inspections to October... May Not Conduct Any This Year

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[Asia Economy Reporter Ji-hwan Park] The comprehensive inspection of financial companies conducted by the Financial Supervisory Service (FSS) is expected to be tentatively postponed to mid-October. If the COVID-19 situation does not improve, there is a possibility that no comprehensive inspections will be conducted this year.

An FSS official stated on the 16th, "Although social distancing in the metropolitan area has been downgraded to level 2, this decision was made considering the economic difficulties faced by self-employed individuals rather than a clear decrease in new confirmed cases," adding, "Considering the Chuseok holiday, it seems difficult to proceed with comprehensive inspections this month."

The FSS originally planned to conduct comprehensive inspections in early to mid-last month but postponed them to the end of the month due to the spread of COVID-19. However, as the virus resurged at the end of last month and the government raised the quarantine level in the metropolitan area to 2.5, the FSS comprehensive inspections were delayed again. The FSS has decided to link the timing of the comprehensive inspections to the COVID-19 quarantine situation.

The FSS has not conducted any of the comprehensive inspections planned earlier this year. Hana Financial Group, Hana Bank, and Hana Financial Investment are prioritized targets for the inspections.

The FSS’s future schedule for comprehensive inspections is expected to be no earlier than mid-next month. This is because social distancing at level 2 is maintained until the 27th of this month, and from the 28th, the Chuseok holiday period has been designated as a special quarantine period for two weeks.

Some in the financial sector believe that measures such as lowering social distancing to level 1 must precede before the concrete decision on whether to proceed with comprehensive inspections can be made. A financial authority official explained, "We cannot ignore the situations of the companies under inspection, such as closing the entire building even if one confirmed case appears," adding, "If the spread does not subside, the possibility that no comprehensive inspections will be conducted within this year cannot be ruled out."

Unlike the large-scale manpower-intensive comprehensive inspections, the FSS plans to conduct selective inspections or investigations for 'partial or thematic investigations' and 'serious issues such as large-scale suspension of redemptions.' Currently, a main investigation of about 10,000 private equity funds and approximately 230 private specialized asset management companies has been underway since the end of last month.

An FSS official explained, "Unlike comprehensive inspections that require large-scale manpower, private equity fund inspections involve an average of 5 to 6 investigators per asset management company, about 10 personnel at the inspected companies, and the investigation period is about a week, so the burden is lighter."

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