[First Day of the Financial Consumer Protection Act] Financial Authorities Prepare Enforcement Rules and Guidebook... What Are the Remaining Tasks?

Focusing on Updating Q&A to Resolve Legal Interpretation Issues
Financial Authorities Tasked with Establishing Concrete Guidelines by September
Considering Plans for Nonghyup, Suhyup, Forest Cooperatives, and Saemaeul Geumgo

[Asia Economy Reporter Park Sun-mi] On the first day of the enforcement of the Financial Consumer Protection Act (FCPA), the Financial Supervisory Service (FSS) completed preparations for the enforcement by releasing guidance materials on the FCPA for consumers and financial companies and sending official letters containing enforcement rules to financial companies. However, ambiguous issues regarding legal interpretation still exist, and there are many requests for guidelines such as the Standard Investment Recommendation Code and Core Explanation Preparation Guidelines, indicating that the financial authorities have many tasks to resolve even after the law’s enforcement.

According to the financial authorities on the 25th, the FSS sent official letters containing detailed enforcement rules related to the FCPA to financial companies only the day before. The FSS stated that although the enforcement rules are internal regulations stipulating procedures and forms necessary for tasks related to subordinate regulations of the FCPA, they do not affect the rights and obligations of the financial sectors, so presenting them just before the enforcement of the FCPA is not a major issue.

The FSS also released guidance materials for financial consumers and financial companies on its website late in the afternoon the day before. The guidance materials include the background of the FCPA enactment, scope of application, entry regulations, business regulations, prior protection of financial consumers’ rights, post-remedy of financial consumers’ rights, supervision, administrative system, and criminal penalties.

The financial authorities, to ensure that consumers do not fail to exercise their rights guaranteed under the FCPA due to lack of awareness during financial transactions, jointly produced leaflets explaining the FCPA with various financial associations and distributed them to financial company branches. More than 1.5 million copies were distributed nationwide to branches of banks, securities, insurance, savings banks, and credit unions.

What are the remaining tasks for financial authorities after the enforcement of the FCPA?

The financial authorities plan to focus on compiling various voices from the field after the enforcement of the FCPA and updating Q&A to resolve ambiguous legal interpretations. An FSS official explained, "We expect many inquiries regarding legal interpretation from each financial industry after the law’s enforcement," adding, "We have no choice but to resolve this through continuous Q&A updates."

The authorities will also participate in the preparation of the Standard Investment Recommendation Code and Core Explanation Preparation Guidelines being prepared by each financial association to ensure their prompt finalization.

▲ Obligations to establish internal control standards and financial consumer protection standards ▲ Obligations related to recording, maintaining, managing, and inspecting materials related to financial product sales business ▲ Obligations to prepare core explanations ▲ Obligations for direct sellers of financial products to set risk grades for investment products ▲ Registration obligations for advisory firms and sales agency brokers, among other regulations, have been deferred for up to six months. Therefore, preparing detailed guidelines on these before their application in September this year is also a task for the financial authorities.

A financial authority official stated, "By the first half of the year, we plan to establish internal control standards committees within each financial sector association to prepare 'Standard Internal Control Standards.'"

The financial authorities are also considering measures for Nonghyup, Suhyup, Sanlimjoap, and Saemaeul Geumgo, which were excluded from the scope of the FCPA application.

Since October last year, the Financial Services Commission has been reviewing measures to apply the FCPA to Nonghyup, Suhyup, Sanlimjoap, and Saemaeul Geumgo together with related ministries. Currently, related consultations are progressing smoothly, and the plan is to prepare and announce measures promptly with related ministries after the enforcement of the FCPA.

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