'Kkamkkami Hoeui' Out... Financial Services Commission Becoming Transparent

Financial Services Commission Chairman Ko Seung-beom is delivering opening remarks at the meeting between the Financial Services Commission Chairman and the insurance industry held on the 3rd at Lotte Hotel in Jung-gu, Seoul. On this day, Chairman Ko Seung-beom meets with insurance company CEOs and experts from related organizations to discuss the development direction of the insurance industry and key issues. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji Yeon-jin] The Financial Services Commission's subcommittee, which had been criticized as a "black box meeting," has decided to start preparing minutes of its meetings.

The Financial Services Commission announced on the 5th that it plans to announce a regulatory change in the "Partial Amendment Notice of the Financial Services Commission Operating Rules" by the 9th of this month. The amendment includes provisions to prepare detailed minutes of the FSC subcommittee meetings to enhance transparency and accountability in financial administration.

The FSC makes decisions on major financial-related agendas at regular meetings attended by nine members, including the Chairman of the FSC and the Governor of the Financial Supervisory Service. However, due to the large number of agendas and complex interests involved, most agendas are pre-coordinated in subcommittees before being brought to the regular meetings. The agenda subcommittee consists of two standing members of the FSC, non-standing members, and four members including standing members of the Securities and Futures Commission. Since the meeting agendas and materials are confidential and no minutes are kept, the subcommittee has been criticized as a "closed-door meeting."

According to the "Status of Agenda Processing by the FSC Agenda Subcommittee" received by People Power Party lawmaker Kang Min-guk, a member of the National Assembly's Political Affairs Committee, through the Financial Supervisory Service ahead of this year's audit, a total of 37 agendas submitted by the Financial Supervisory Service to the FSC agenda subcommittee have been discussed more than twice from 2019 to August this year. Among these, eight agendas are still under review. These include disciplinary measures against financial companies involved in the Lime Fund and Discovery Fund scandals.

In particular, the Financial Supervisory Service's disciplinary proposal against the three Lime Fund distributors (Shinhan Financial Investment, Daishin Securities, KB Securities) was first submitted to the agenda subcommittee on February 26 of this year. Although it has been discussed three times in total, the review has not been completed for over 200 days, causing controversy. The disciplinary proposal against the Discovery Fund company was first submitted on June 18 and, after two discussions, has only been repeatedly reviewed. Additionally, the unpaid cancer hospitalization insurance claim case involving Samsung Life Insurance and nursing hospitals has also been stalled for over 200 days. The delay in disciplinary agendas is attributed to the confidential operation of the agenda subcommittee holding onto these proposals. Lawmaker Kang criticized, "This stems from the irrational operation method lacking transparency and the composition of the agenda subcommittee," adding, "The subcommittee consists of only four members, and all meeting agendas and materials are confidential with no minutes."

The longer the agenda processing is delayed, the higher the likelihood of lobbying by the targeted financial companies. Many former FSC officials are employed at law firms representing financial companies, raising concerns about lenient punishments. Justice Party lawmaker Bae Jin-gyo said at last month's audit, "Even if the inevitability of the agenda subcommittee's operation and the need for coordination are fully acknowledged, the subcommittee seems to act as a shield, delaying necessary disciplinary actions, which is problematic," and added, "I believe transparency and accountability in the decision-making process must be strengthened and improved."

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