[2020 National Audit] Yudongsu: "Exchange is a Blind Spot for FSC Inspection"

[Asia Economy Reporter Park Jihwan] The Korea Exchange has been pointed out to be in a blind spot of inspection by the Financial Supervisory Service.

According to data submitted by the Korea Exchange to Yoo Dong-su, a member of the Democratic Party of Korea, on the 13th, the Financial Supervisory Service's inspection record of the Korea Exchange over the past six years was only one case.

Compared to the fact that the Financial Supervisory Service conducted inspections more than four times on securities-related institutions other than the Korea Exchange, supervision of the exchange is virtually being neglected. Currently, under Article 410 of the Capital Markets Act, the authority to conduct inspections of the Korea Exchange lies with the Financial Services Commission.

Yoo Dong-su stated, "The Financial Services Commission did not entrust the Financial Supervisory Service with inspections of the Korea Exchange," and added, "Even the one case that was entrusted was not an inspection of overall management and operations but rather a check on IT security and information protection safety."

Yoo pointed out, "Since 2015, the number of inspections entrusted by the Financial Services Commission to the Financial Supervisory Service has been only one case, and even that was a check on IT security and information protection safety rather than an inspection of overall management and operations. Therefore, there is a need for the Financial Supervisory Service to closely examine the Korea Exchange's overall market management duties."

Yoo also raised concerns about Mirae Asset obtaining a three-month exclusive usage right from the exchange during the development of the KRX BBIG K-New Deal Index as a private New Deal fund.

Yoo said, "Considering that the usual period for granting exclusive usage rights during index development in the ETF market is six months, the reduction of the exclusive usage right period is unusual," and added, "In the ETF market, market preemption is important, and past cases of leveraged ETFs confirm the influence of market preemption."

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