FSS to Begin On-Site Inspections of Responsibility Structure Chart Operations at Holding Companies and Banks from August 21

44 Financial Holding Companies and Banks to Be Inspected First
On-site Inspections for 8 Institutions Starting August 21
Written Inspections for Remaining Financial Firms in September

Starting in August, the Financial Supervisory Service will conduct inspections on the operational status of responsibility structure charts at financial holding companies, banks, financial investment firms, and insurance companies.

On August 11, the Financial Supervisory Service announced that it will begin inspections on the operation of internal control systems based on responsibility structure charts, which have been in full-scale implementation since this year, starting from August 21.

The inspections will cover 44 financial holding companies and banks that have already adopted responsibility structure charts. Eighteen institutions that are subject to this year's regular inspections by the Bank Examination Department are excluded. The scope includes six financial holding companies, 15 banks, and 23 foreign bank branches.

Taking into account factors such as sector (holding company/bank), size (major/regional/foreign bank branch), and participation in pilot operations, on-site inspections will be sequentially conducted on eight financial institutions starting from August 21. For the remaining companies, checklists and other materials will be prepared based on the results of the on-site inspections, and written inspections will be carried out in September.

The inspection items include the implementation status of the CEO's overall management duties for internal control and the obligation to report to the board of directors. In addition, the adequacy of the internal control supervision system through the board of directors, such as the Internal Control Committee, will also be examined.

Major financial investment firms and insurance companies will undergo on-site inspections in the second half of the year. For large financial investment firms and insurance companies, considering that this is the initial stage of implementation, the inspections will focus on whether key recommendations from prior consultations have been faithfully reflected and on the status of establishing internal control infrastructure, such as internal regulations and systems.

So far, each sector remains in the early stages of establishing internal control systems based on responsibility structure charts, so it is expected to take considerable time before the new system is effectively implemented.

The Financial Supervisory Service stated, "For any deficiencies identified during this inspection, we will recommend improvements and supplements to financial companies, continuously monitor the progress of their implementation, and share major common deficiencies and best practices through internal control workshops and industry briefings by sector. We will continue to communicate with the industry to ensure that responsibility structure charts are firmly established in the field."

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