FSS to Tackle Finfluencer and Exaggerated Ads... Improvement Plan for Financial Investment Company Advertising by Q3

The Financial Supervisory Service (FSS) is inspecting the current state of false and exaggerated advertisements by financial investment companies and is promoting institutional improvements.

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On the morning of April 23, the FSS launched the "Task Force for Improving Advertisement Regulations for Financial Investment Companies" at the Korea Financial Investment Association in Yeouido, Seoul, and discussed the direction of improvements to the advertisement review system for financial investments.

Seo Jaewan, Deputy Governor of the FSS, stated, "The recent instances of false and exaggerated advertisements can undermine trust in the domestic capital market," and added, "We plan to promote improvements to the advertisement system and strengthen inspections of advertising practices."

As stock investment has expanded recently, competition among financial investment companies for advertisements has intensified, leading to a surge in false and exaggerated advertisements. Mandatory disclosures such as fee standards and investment risks have been omitted, and prohibited actions such as loss compensation and profit guarantees have not been observed. For instance, advertisements often use definitive expressions regarding returns, such as "you can receive steady monthly income like rent" for dividend investments.

Although there are separate regulations for advertisements by financial investment companies, the need for regulatory supplementation has been raised due to the rapidly changing advertising environment, including social networking services (SNS). In particular, the review system is insufficient for advertisements conducted through "finfluencers."

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The FSS plans to gather opinions from industry stakeholders and establish the final improvement measures during the third quarter of this year.

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