Yoon Seokheon: "Establishing Responsible Management in Financial Companies... Clarifying Scope of Accountability for Responsible Executives" (Comprehensive)

Reviewing Measures to Clarify Executive Responsibility Scope for Tasks Frequently Causing Consumer Harm

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[Asia Economy Reporter Park Sun-mi] The Financial Supervisory Service (FSS) plans to focus on establishing a consumer-centric sales conduct regulatory system this year and induce financial companies to build responsible management systems.

On the 17th, during a briefing to the National Assembly's Political Affairs Committee, Yoon Seok-heon, Governor of the FSS, stated, "To ensure the early establishment of the Financial Consumer Protection Act, we will reorganize the sales conduct supervision system and check the response status of financial companies' compliance with the Act," adding, "We will also focus on inspecting violations of transaction order such as incomplete sales of high-risk financial products, unhealthy sales practices through non-face-to-face sales channels, and evasion of public offering regulations."

There will be focused inspections and examinations related to incomplete sales and management of high-risk products such as private equity funds. Unhealthy sales practices through non-face-to-face sales channels, including platform-type similar insurance solicitation due to competition in non-face-to-face sales and exaggerated investment advertisements, will be inspected. Additionally, inspections on regulatory evasion such as evading public offering regulations related to DLS issuance and indirect payment of insurance solicitation commissions will be strengthened.

He continued, "We will induce financial companies to establish responsible management systems." This means strengthening the management's responsibility for preventing consumer damage and encouraging improvements in internal controls of financial companies to foster a consumer-centric culture.

In this regard, the FSS is currently reviewing measures to clearly define the scope of responsibility of the executive in charge (name and position) in advance for tasks where consumer damage frequently occurs. Furthermore, to promote a consumer-centric responsible management culture, the FSS plans to reorganize the evaluation items and criteria for consumer protection performance. Options under consideration include expanding the evaluation to reflect mystery shopping results and efforts to protect the elderly. Additionally, improvement plans will be reviewed to ensure that internal controls within financial holding companies are systematically operated for core tasks such as consumer protection.

Focus on Overcoming the COVID-19 Crisis and Maintaining Financial Stability This Year

Meanwhile, Governor Yoon said in his opening remarks at the full meeting of the Political Affairs Committee on the same day, "We will overcome the COVID-19 crisis and maintain financial stability."

He added, "While continuing financial support for COVID-19, we will prepare a soft landing plan to prevent cliff effects during the normalization process," and "We will maintain the resilience of the financial system by enhancing financial companies' loss absorption capacity and systematically respond to financial system risk factors such as household debt issues and concentration in high-risk assets."

He also said efforts will be made to establish a fair financial transaction order. While firmly upholding the principle of same function, same regulation, he pledged to strictly deal with market order violations such as illegal short selling and unfair capital market transactions.

Inclusive finance will also be expanded. Governor Yoon stated, "We will prepare measures to include low-credit borrowers in the formal financial sector and actively support the recovery of low-income self-employed individuals by reviewing and improving the debt adjustment system," adding, "We will alleviate insurance premium burdens through rational improvements to national insurance systems such as automobile insurance and indemnity insurance, and strive to expand customized financial education and information provision."

Furthermore, he said efforts will continue to support financial industry innovation and enhance trust in financial supervision. He emphasized, "We will strengthen support for emerging financial service industries and meticulously respond to risk factors arising from the acceleration of digital finance," and "We will also promote digital innovation in financial supervision, secure integrity that meets public expectations through internal reform of the FSS, and rationally improve inspection and sanction procedures."

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