The Financial Supervisory Service conducted a full inspection of 1,942 similar investment advisory businesses and administratively canceled unqualified firms ex officio.
The FSS said on the 25th that it canceled ex officio 105 unqualified similar investment advisory firms, including three that violated financial-related laws and regulations.
A similar investment advisory business is a business model that provides investment advice on financial investment products to an unspecified number of people for a certain fee. Unlike investment advisory businesses, there are almost no entry requirements, and sole proprietors can also engage in it. As the low threshold for similar investment advisory businesses led to a continued increase in the number of firms, the number has recently decreased after setting the validity period of notifications to five years in 2019.
In accordance with the ex officio cancellation system introduced at the time, the FSS asked related agencies such as the police, the prosecution, the National Tax Service, and the Fair Trade Commission to verify the facts for similar investment advisory businesses and confirmed grounds for ex officio cancellation. As a result, it deleted the notifications for a total of 105 unqualified firms. Three were due to violations of financial-related laws and regulations, and the remaining 102 were due to business closures.
The FSS said, "We will periodically check whether similar investment advisory businesses have closed and whether they have histories of violating laws and regulations to promptly remove unqualified operators," and added, "As regulations on business conduct for similar investment advisory businesses have recently been strengthened, we will continue education and legal guidance for operators."