Special Police for the Capital Market to Launch Criminal Investigations for All Cases Starting Next Month

Starting next month, the special judicial police (Special Police) under the Financial Services Commission and the Financial Supervisory Service will be able to convert investigations of unfair practices in the capital market into criminal investigations without having to file a complaint with the prosecution.

On March 16, the Financial Services Commission and the Financial Supervisory Service announced a notice of regulatory change for the amendment to the "Special Judicial Police Rules for the Capital Market," which includes these provisions. The notice period runs from today until March 26, and the changes are scheduled to take effect next month following resolution by the Financial Services Commission and other necessary procedures.

Through this regulatory notice, the Special Police for the capital market will be able to independently convert investigative cases into criminal investigations. Previously, this process required a complaint to the prosecution by the Securities and Futures Commission, after which the prosecution would determine whether to initiate an investigation. Going forward, the Financial Services Commission's Investigation Review Committee will have the authority to convert investigative cases into formal investigations.

The composition of the Investigation Review Committee will also be reorganized to prevent abuse of investigative powers in advance. While the number of committee members will remain at five, two members will be selected by the Governor of the Financial Supervisory Service from among the heads of investigation departments or legal advisors at the Financial Supervisory Service. Previously, one member was designated by the Deputy Governor for Disclosure and Investigation of the Financial Supervisory Service or a standing member of the Securities and Futures Commission.

The requirements for convening the Investigation Review Committee are either the request of at least two committee members or when the committee chairperson deems it necessary. An agenda can be proposed if at least two members agree, or the chairperson may unilaterally submit an agenda.

When the Investigation Review Committee convenes, it must decide on the conversion to a criminal investigation on the same day. If an in-person review and resolution are difficult, the chairperson may conduct a written resolution with an attached statement of reasons.

An official from the Financial Services Commission stated, "If investigations into unfair trading in the capital market are expedited, it is expected to contribute to establishing a fair trading order and restoring trust in the capital market."

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