'Chinezeweol' Financial Investment Firms' Autonomous Operation...Strict Post-Sanctions in Case of Failure

[Asia Economy Reporter Ji Yeon-jin] The information barrier system (Chinese Wall) of financial investment companies will be transitioned to be operated autonomously by the companies.

The Financial Services Commission announced on the 11th that it approved the amendment to the "Capital Market Act Enforcement Decree" containing this content at the Cabinet meeting. It is scheduled to be implemented from the 20th along with the Capital Market Act revised in May last year.

The Chinese Wall, introduced at the time of the Capital Market Act enforcement in February 2009, was directly regulated in detail by law, leading to excessive regulatory burdens and difficulties in reflecting the company's uniqueness and autonomy.

Accordingly, through the revision of the Capital Market Act in May last year, only the basic principles of the Chinese Wall are stipulated in the law, allowing companies to design and operate detailed contents themselves through internal control standards tailored to their respective situations.

Financial investment companies must establish internal control standards to restrict the exchange of undisclosed important information and customer asset-related information, specifying the blocked departments, prohibited acts, and exceptional exchange requirements and procedures. They must designate a Chinese Wall chief officer, comply with employee training, and post-violation responsibilities such as criminal penalties and fines have been strengthened.

A Financial Services Commission official stated, "If a high level of internal control standards is prepared and operated, supervisors' responsibilities can be reduced in case of violations, so companies need to faithfully operate internal control standards on their own."

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