Financial Supervisory Service Accounting Expert Committee Member, to be Reinstated as Deputy Director?

Democratic Party Rep. Kim Hyun-jung Proposes Amendment to the 'Financial Services Commission Establishment Act'
Financial Supervisory Service Deputy Directors Increased to 10
One Deputy Director to Serve as Accounting Expert Review Committee Member

The Financial Supervisory Service (FSS) will establish a legal basis to reinstate the position of accounting expert committee member at a higher level. Following the 2023 audit office's recommendation, the FSS reduced the number of deputy governor positions from 11 to the current 10. As accounting issues have recently come to the forefront and calls to elevate the FSS's status in accounting supervision and inspection have grown louder, Kim Hyun-jung, a member of the Democratic Party of Korea, has proposed related legislation.

According to the financial investment industry on the 16th, Kim Hyun-jung, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, officially proposed a bill on the 16th to increase the number of deputy governors at the FSS from 9 to 10 under current law. The amendment revises Article 29 of the law to change the number of deputy governors at the FSS from "9" to "10" and stipulates that one of the deputy governors shall serve as an accounting expert committee member.

This was proposed to resolve the illegalities pointed out by the audit office in 2023. Article 29, Paragraph 1 of the Financial Services Commission Establishment Act stipulates that the FSS may have up to 9 deputy governors.

In 2020, with the addition of one deputy governor position in the FSS's Financial Consumer Protection Department, the total number of deputy governors, including the accounting expert committee member, reached 10, violating the current law as pointed out by the audit office. In response to the audit office's recommendation, the FSS lowered the rank of the accounting expert committee member, who is the head of accounting supervision, from deputy governor to senior director level.

There have been criticisms that the status of the relevant official has rather declined at a time when strengthening accounting transparency is becoming increasingly important. Lawmaker Kim Hyun-jung explained, "This amendment was proposed to clarify the legal basis that the accounting expert committee member holds the status of deputy governor."

The amendment also newly establishes a legal basis (Article 40, Paragraph 1) allowing the FSS to seal the vaults, ledgers, and items of financial institutions subject to inspection. Until now, the FSS has conducted sealing measures based on the Financial Services Commission's notice, the "Regulations on Inspection and Sanctions of Financial Institutions."

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