FSS to Expand Consulting Inspections at Financial Investment Companies...Strengthening Investor-Protection Internal Controls

Meeting with Auditors and Compliance Officers of Securities and Futures Companies
"A Time When Greater Proactivity from Auditors and Compliance Officers Is Needed"

The Financial Supervisory Service (FSS) will expand its compliance consulting inspections to help financial investment companies establish internal control systems focused on investor protection.

At the "Meeting with Auditors and Compliance Officers of Securities and Futures Companies" held at 10:00 a.m. on February 11 at Bulls Hall of the Korea Financial Investment Association in Yeouido, Seoul, FSS Senior Deputy Governor Seo Jaewan stated, "The investor protection responsibility of financial investment companies, which serve as a bridge between the capital market and investors, has become even more significant."

Under the consulting inspection, an inspection team reviews the investor protection framework throughout the processes of product design, sales, and management, identifies weaknesses, and communicates them to the company. The financial investment company then communicates with the inspection team and voluntarily establishes measures to strengthen internal controls.

In addition to expanding consulting inspections, the FSS plans to conduct intensive inspections of internal controls at each stage of product handling, and to carry out swift and agile inspections of conduct that causes investor harm.

The FSS also requested the support of auditors and compliance officers to ensure that investor-protection-centered internal control systems take root. Senior Deputy Governor Seo said, "Recent inspection results show that, in some quarters, business practices that prioritize short-term profit over investors' interests still persist," and added, "I ask auditors and compliance officers to take a more proactive role so that investor-protection-centered internal control becomes embedded as a company-wide culture."

He also said, "The introduction of the accountability map can serve as a new turning point in strengthening reporting to investors by financial investment companies and in spreading a culture of responsibility for internal controls. I ask you to make special efforts to ensure that the allocation and operation of responsibilities do not remain mere formality or procedure, but are managed and supervised effectively."

At the meeting, participants reviewed, item by item, the results of the recently conducted accountability map assessment for large financial investment companies, and shared best practices as well as cases requiring improvement.

Starting with this meeting, the FSS plans to continue communication with the industry so that preemptive investor protection can take root as part of the internal control culture.

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