Jeong Eun-bo "Will Establish a Continuous Supervision System for Fund Setup, Sales, and Management in Asset Management Companies"

[Asia Economy Reporter Ji-hwan Park] Jung Eun-bo, Governor of the Financial Supervisory Service (FSS), announced plans to establish a comprehensive, 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 diverse investor demands can be 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 supervisory and inspection directions and major issues at the Kensington Hotel in Yeongdeungpo-gu, Seoul.

The meeting was attended by Governor Jung, Na Jae-cheol, Chairman of the Korea Financial Investment Association, along with CEOs from eight companies including Lee Byung-sung, CEO of Mirae Asset Global Investments; Shim Jong-geuk, CEO of Samsung Asset Management; Lee Hyun-seung, CEO of KB Asset Management; Kim Sung-hoon, CEO of Kiwoom Asset Management; Lee Kyu-sung, CEO of Aegis Asset Management; Song Sung-yeop, CEO of Timefolio Asset Management; Park Se-yeon, CEO of Suseong Asset Management; and Kim Kyu-chul, CEO of Korea Asset Trust.

Governor Jung expressed his intention to pursue a supervisory and inspection direction for the asset management industry based on laws and principles, aiming to balance preventive supervision and ex-post supervision. Specifically, considering the current uncertainties in domestic and international 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 targeting professional investors will reflect operational particularities, and we will actively review improvements regarding regulatory arbitrage issues arising between private new technology associations and private funds."

Regarding asset management inspections, he emphasized that financial authorities will focus on identifying vulnerabilities in advance and encouraging asset managers 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."

Additionally, Governor Jung stressed, "In a changing environment such as digital transformation and expansion of alternative investments, we will support institutional improvements like mergers, specialization, and shortening licensing periods for specialized asset managers to strengthen competitiveness through the growth and specialization of asset management firms."

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 innovative products that meet diverse investor demands can be launched in a timely manner."

Furthermore, Governor Jung stated, "We plan to provide maximum support for the sound growth of the asset management industry, including ensuring the smooth market landing of the revised private fund system following amendments to the Capital Markets Act."

In conclusion, Governor Jung said, "The asset management industry has high growth potential in the future, supported by the acceleration of asset formation from national income and increasing asset management demand according to the life cycle. We must devote ourselves to developing financial products and services that satisfy the investment demands of various social strata and proactively manage consumer protection."

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