Jeong Eun-bo "Establishing a Continuous Supervision System for Asset Management Inspection Covering Fund Setup, Sales, and Operation"

[Asia Economy Reporter Park Jihwan] Jung Eun-bo, Governor of the Financial Supervisory Service (FSS), announced plans to establish a comprehensive and continuous supervision system covering the entire process of fund establishment, sales, and management related to asset management inspections. He also emphasized that institutional improvements will be made to ensure that innovative products meeting the diverse demands of investors are launched in a timely manner to revitalize public funds.

On the 2nd, Governor Jung and CEOs of the asset management industry held a communication session regarding supervision and inspection directions and major issues at the Kensington Hotel in Yeongdeungpo-gu, Seoul. Attendees included the FSS Governor, Na Jae-cheol, Chairman of the Korea Financial Investment Association, and representatives from Mirae Asset, Samsung, KB, Kiwoom, Aegis, Timefolio, Suseong Asset Management, and Korea Asset Trust.

On this day, Governor Jung expressed his intention to pursue a supervisory and inspection direction for the asset management industry based on laws and principles, aiming for harmony and balance between preventive supervision and ex-post supervision. Specifically, considering the uncertainty of economic conditions, he emphasized focusing on proactive risk management and concentrating supervisory capabilities on strengthening financial consumer protection to restore investor trust.

Governor Jung stated, "To ensure the asset management industry maintains resilience even in crisis situations, we will encourage potential risk management by preparing for increased volatility in interest rates and asset prices through measures such as liquidity stress tests." He added, "We will strive to establish industry practices where private funds are treated as private, and public funds as public. Private funds for professional investors will reflect the unique characteristics of their management, and we will actively review improvement measures regarding regulatory arbitrage issues arising between private new technology associations and private funds."

In particular, regarding asset management inspections, he emphasized that financial authorities will focus on identifying vulnerabilities in advance and encouraging management companies to improve them independently. Governor Jung said, "To this end, the FSS will establish a comprehensive continuous supervision system covering fund establishment, sales, and management, and will promote the advancement of a continuous monitoring system based on IT technology and data."

Furthermore, Governor Jung emphasized, "In a changing environment such as digital transformation and expansion of alternative investments, we will support efforts to strengthen competitiveness through the enlargement and specialization of management companies by shortening the approval period for mergers, specialized, and professional management companies."

He also shared his thoughts on revitalizing the public fund market, which has recently experienced sluggishness. Governor Jung said, "To revitalize public funds, we will provide institutional support such as operating a Fast-Track procedure for innovative product reviews to ensure that innovative products meeting the diverse demands of investors can be launched in a timely manner."

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