Daesin Asset Management to Undergo Spot Inspection by Financial Supervisory Service

[Asia Economy Reporter Hwang Yoon-joo] Daishin Asset Management is undergoing an inspection by the Financial Supervisory Service (FSS) for the first time in four years.

According to industry sources on the 19th, Daishin Asset Management submitted preliminary documents related to the ad-hoc inspection to the FSS on the 12th. It is known that they were requested to provide materials covering a wide range of areas including Exchange-Traded Funds (ETF), alternative investments, and internal controls. The main inspection is expected to begin as early as the end of this month.

An FSS official stated, "We cannot disclose specific details of the inspection."

In February, the FSS reorganized its existing comprehensive and sector inspections into regular and ad-hoc inspections. Ad-hoc inspections are usually conducted when special issues arise. Regular inspections review the overall business areas and are typically conducted every 2.5 to 5 years. It is reported that the FSS internally decided to conduct regular inspections for top-tier asset management companies and ad-hoc inspections for small and medium-sized firms depending on the circumstances.

Following the inspection system reorganization, the first regular inspection for an asset management company was conducted in April on Samsung Asset Management, focusing on its entire ETF business. Mirae Asset Management is scheduled for a regular inspection in the second half of the year. For small and medium-sized firms, an ad-hoc inspection was conducted on JB Asset Management, which had experienced issues with halting redemptions of real estate funds.

The series of inspections by the FSS appears to be in line with the emphasis on investor protection since the appointment of FSS Governor Lee Bok-hyun. In May, the FSS announced plans to intensively inspect securities firms and asset management companies that halted redemptions of private equity funds this year. This is to ensure compliance with investor protection regulations in relation to general private equity funds following the Lime and Optimus scandals.

In particular, concerns about a real estate market downturn have increased due to aggressive interest rate hikes in the United States, leading to greater demands for risk assessments in the real estate market. This is why the FSS is examining asset management companies’ overall businesses, including their ETF divisions and alternative investments.

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