FSS Strengthens Protection for Investors in High-Risk Overseas Products... Holds Meeting with Securities Firms

The Financial Supervisory Service announced on December 9 that, in response to the spread of high-risk overseas investment products, it held a meeting with Chief Customer Officers (CCOs) and compliance officers of securities companies to strengthen the protection of individual investors.

The meeting took place at the Korea Financial Investment Association’s main conference room and was attended by CCOs and compliance officers from major securities firms, including KB, NH, Samsung, Mirae Asset, Meritz, Shinhan, Toss, and Hana. The session was also attended by Lim Kwonsun, Director General of the Capital Markets Supervision Bureau at the Financial Supervisory Service, officials from the Financial Consumer Protection Bureau, and Jeong Hyungyu, Head of the Self-Regulatory Division at the Korea Financial Investment Association.

The Financial Supervisory Service requested that securities companies establish internal controls focused on protecting financial consumers in relation to high-risk overseas investment products and strengthen their risk management practices.

The agency urged companies to reinforce risk analysis at the product launch stage, including risks related to overseas capital markets and exchange rate volatility, and to review their risk management and performance compensation (KPI) systems to prevent excessive concentration in specific products. It also called for restraint in advertising and promotional events for high-risk overseas products that could encourage excessive trading.

Additionally, the Financial Supervisory Service asked companies to conduct self-assessments of their preparations for the pre-education system for overseas derivatives, which is scheduled to take effect on December 15, and to ensure thorough implementation.

The Korea Financial Investment Association also plans to strengthen advertising reviews related to the launch of financial products from an investor protection perspective prior to the implementation of the overseas derivatives education system.

The Financial Supervisory Service will provide immediate guidance for improvement to institutions found to have inadequate investor protection management systems through ongoing on-site inspections of securities companies. It also plans to continue its efforts to establish sales practices centered on investor protection by further improving internal controls at securities firms.

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