The joint response team to eradicate stock price manipulation was launched on the 30th of last month. Staff members from relevant authorities and organizations related to the crackdown and punishment of stock price manipulation and unfair trading activities began working in a space set up at the Korea Exchange in Yeouido, Seoul, including the Financial Supervisory Service and the Korea Exchange.
However, it seems there has been some noise from inside and outside even before the formal start of operations. A post that appeared on the anonymous community Blind sparked the issue. The post, presumed to have been written by a Korea Exchange employee, included content claiming that "during the process of installing the market surveillance war room, there were outbursts and disturbances related to meals, gyms, parking passes, and office space."
After the post was uploaded, it looked like a proxy battle was underway, with comments pouring in from the FSS and the exchange, as well as employees from financial companies. A confrontational stance was formed where the exchange and commercial financial institutions banded together to criticize the FSS.
Inside and outside the FSS and the exchange, there were rumors regarding the unusually high partitioning of the joint response team's office. Kwon Dae-young, the vice chairman of the Financial Services Commission (FSC), remarked at the plaque ceremony commemorating the launch of the joint response team on the 30th of last month that "we have collapsed the spatial separation, information barriers, and distribution of authority that stood in the way of the three agencies to operate as one team," even though the physical partitions of the offices were reportedly quite high.
The relevant authorities stated that the information is not accurate. The FSS stated that it never requested separate welfare for dispatched staff of the Korea Exchange and that discussions are ongoing about sharing the costs incurred from the use of space where the joint response team is set up. The exchange's side said, "We understand that the post was made by an unrelated employee of the joint response team, with false information uploaded on an anonymous bulletin board."
While the Blind incident seems to be ending as a mere mishap, the fact is that the controversy was anticipated. The three organizations that formed the joint response team are coordinating to respond to unfair trading, but the FSS and the exchange also establish a special relationship as supervisory and supervised institutions, respectively.
The post that caused the controversy also included such content. The author expressed dissatisfaction regarding the disciplinary action taken by the FSS after it conducted an inspection related to the Korea Exchange's IT failures.
The exchange was designated as a public interest organization under the Public Official Ethics Act after it was released from public institutions in 2015. The FSS cannot inspect the exchange directly, but can do so at the request of the FSC. The FSS conducted a comprehensive inspection of the exchange in 2021 and initiated an inspection of the exchange following the IT failure in the securities market earlier this year.
An industry insider noted, "While cooperating, the exchange, which must also undergo inspections by the FSS, cannot help but engage in a subtle psychological game with the FSS."
Although a mishap occurred immediately after its launch, the responsible parties have shown a willingness to produce results given that a new organization has been established.
The FSS said, "The three institutions have discussed the composition of personnel and the working environment of participating employees in depth for a considerable period to ensure the prompt and smooth launch of the joint response team and these discussions were conducted through close consultation among the members of each organization rather than in a unilateral manner. The three institutions are putting in their best efforts together as one team with the shared goal of eradicating unfair trading."