KAMCO Increases Departments with Stock Trading Restrictions and Issues Business Trip Disclosures... Financial Services Commission Comprehensive Audit Measures

Results of 26 Disposition Requests Including 19 Improvements
Restricted Departments for Stock Trading Increased from 1 to 5
Thorough Disclosure of Overseas Business Trips
Establishment of Detailed Rules for Company Housing Operation Standards

Korea Asset Management Corporation (KAMCO) has expanded the departments restricted from stock trading by its executives and employees and decided to disclose reports on overseas business trips on its website. This completes the measures addressing issues pointed out during the Financial Services Commission's comprehensive audit.

According to the financial sector on the 20th, KAMCO recently submitted a 'Comprehensive Audit Action Report' to the Financial Services Commission. The Financial Services Commission conducted a comprehensive audit of KAMCO in April and requested actions on a total of 26 cases in June (19 improvements, 5 cautions, 1 warning, and 1 recommendation). While a specific audit on the special supply of housing was conducted in April 2022, this comprehensive audit was the first in the past 10 years.

First, KAMCO expanded the departments restricted from stock trading by executives and employees and established measures to strengthen internal controls. The Financial Services Commission issued an improvement order stating that since KAMCO performs tasks that directly or indirectly affect the stock prices of related companies, such as supporting corporate normalization and operating a restructuring platform, it must expand the departments restricted from stock trading to prevent conflicts of interest.

Accordingly, in addition to the Corporate Support Headquarters responsible for the Corporate Restructuring Innovation Fund, KAMCO decided to restrict stock trading in five other departments handling corporate support and management of state-owned securities (Planning and Coordination Office, Corporate Asset Acquisition Office, Corporate Rehabilitation Support Office, Marine Investment Finance Office, and State-owned Securities Management Office). Internal controls on restrictions for trading financial investment products were also strengthened. When transferring to a restricted department, employees must submit a pledge to comply with stock trading restrictions to the person responsible for enforcing behavioral rules and also submit a confirmation of stock holdings and trading related to their duties. Based on materials submitted twice a year, checks are conducted to detect any illicit acquisition using undisclosed information. Upon personnel transfers, the revocation of ‘On-Giup’ administrator rights, which allow access to corporate rehabilitation information, is checked, and education on the Conflict of Interest Prevention Act and related topics is provided to employees in restricted departments.

Measures were also taken regarding the failure to disclose reports on overseas business trips on the website. The Financial Services Commission revealed that among 31 business trips by KAMCO executives and employees from 2021 to last year, three cases did not have overseas trip plans and reports disclosed. Accordingly, KAMCO decided that, according to the ‘Overseas Travel Guidelines,’ if the trip is subject to review, a review committee will be held to evaluate appropriateness, and trip plans and reports will be registered on the website within 30 days after returning, with reports being collected.

Additionally, measures were implemented to comply with standards related to the operation of employee housing. The comprehensive audit pointed out that among 226 employee housing units operated by KAMCO, 116 did not meet the occupancy standards per housing unit. KAMCO decided to establish internal regulations, send cooperation letters, and regularly check the status. Procedures related to dual employment approval were also prepared. For non-profit work, dual employment is allowed with the institution head’s approval; however, from 2021 to this year, among 65 dual employment approvals at KAMCO, one person (an apartment building representative) did not obtain prior approval. KAMCO has established and is implementing detailed standards for the operation and management of the dual employment system. Measures were also completed regarding oversight lapses for overseas commissioned training participants (submission guidance completed) and rationalization of overseas training living expense payment standards (regulations revised reflecting adjusted payment standards).

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