Financial Supervisory Service to Create "Easier Public Offering Fund Prospectus"

The Financial Supervisory Service has officially begun work to make prospectuses for public offering funds easier for general investors to understand.

On May 12, the Financial Supervisory Service launched the “Task Force for Improving Public Offering Fund Disclosure Requirements” to develop a “Standardized Key Fund Risk Table” that clearly explains the investment risks associated with public offering funds. This is a follow-up measure to the “Financial Consumer Protection Improvement Roadmap” announced in December of last year.

There have been ongoing criticisms that fund prospectuses are difficult for ordinary consumers to understand. According to a survey conducted by the Financial Supervisory Service between February and March targeting 119 general consumers, 49.6% of respondents said the prospectuses did not sufficiently explain investment risks. Additionally, 58.0% replied that the simplified prospectuses did not adequately reflect the key investment risks.

The improvements developed by the task force will be finalized after gathering opinions from consumer advocacy groups and will ultimately be reflected in the official disclosure forms. The task force consists of members from the Financial Supervisory Service, the Korea Financial Investment Association, and the asset management industry, and will operate until next month.

An official from the Financial Supervisory Service stated, “We will continue our efforts to protect consumer rights and enhance trust in the capital market.”

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