FSS to Directly Inspect Voting Rights Practices at 77 Asset Management Firms

The Financial Supervisory Service (FSS) will conduct a focused inspection of asset management companies’ processes for exercising shareholder rights, including whether they have established organizations dedicated to stewardship activities and whether conflict-of-interest management systems are in place when exercising voting rights. While the FSS has previously reviewed the public disclosure of each asset manager’s internal guidelines for exercising voting rights, it now plans to conduct a deeper examination of the guidelines themselves.

On April 14, the FSS announced that it will inspect the shareholder rights exercise processes of public asset management companies that disclosed their voting records to the Korea Exchange from April 1, 2025, to March 31, 2026. The inspection targets 77 public asset management firms that have disclosed voting records and have a significant impact on general investors.

Through this inspection, the FSS will specifically check the internal guidelines related to voting rights exercised by each asset management company. The inspection items include whether shareholder rights exercise processes—such as standards for exercising voting rights—have been established, whether there are dedicated organizations and personnel systems for stewardship activities, and whether conflict-of-interest management is in place to ensure the independence of voting rights exercise.

This inspection will be conducted in addition to the ongoing review of voting rights exercise and related disclosures. Previously, the FSS only reviewed the voting rights exercise and disclosure status of both public and private asset management companies that disclosed their voting activity. This approach, which focused on disclosures, made it difficult to ascertain the specific standards for exercising voting rights and whether related organizations had been established by each asset manager.

The review of voting rights exercise and disclosure status will cover approximately 500 public and private asset management companies this year. The inspection items include the reasons for exercising or not exercising voting rights, disclosure of internal guidelines, and the standards for preparing disclosure forms.

An official from the FSS stated, “We plan to thoroughly review all disclosures related to the exercise of voting rights and, starting this year, will additionally inspect whether processes for exercising shareholder rights have been established, so that sound practices for exercising voting rights can become established among asset management companies.” The official added, “We will announce the results regarding top-performing and underperforming asset management companies at the end of June and share exemplary cases in July.”

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