[2021 National Audit] Jeong Eun-bo "Regarding Responsibility of Private Equity Fund Sellers... Will Consider Reestablishing Principles"

Jeong Eun-bo, Governor of the Financial Supervisory Service, attended the National Assembly's inspection of the Financial Supervisory Service held by the National Assembly's Political Affairs Committee on the 7th, responding to questions from lawmakers. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Park Ji-hwan] Jung Eun-bo, Governor of the Financial Supervisory Service (FSS), stated on the 7th that he intends to redefine the existing responsibility principles regarding the accountability of private fund distributors.

On the same day, during the National Assembly's Political Affairs Committee audit, in response to Hong Seong-guk, a member of the Democratic Party of Korea, who pointed out, "Compensation issues related to financial institutions concerning derivative-linked funds (DLF), Lime Fund, and others continue to arise," and said, "From the FSS's standpoint, since these problems keep occurring, it seems like the distributors are being pressured to quickly compensate investors and end the matter," Governor Jung responded accordingly.

Assemblyman Hong emphasized, "We need to properly establish the rules once and for all," adding, "Regarding compensation issues, it is essential to accurately determine whether it was a case of mis-selling or not to prevent the recurrence of similar problems." He further stated, "It appears that the FSS has applied arbitrary standards, and if this continues, the financial market will not develop," and added, "Efforts to clearly define investor responsibility also seem necessary."

In response, Governor Jung Eun-bo said, "I believe that the recent risks have naturally been embedded in the process of creating private funds and selling them in a quasi-public manner."

Governor Jung added, "We will review the overall private fund system once again and examine the principles regarding responsibility when financial accidents occur related to private funds."

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