The Financial Supervisory Service will overhaul how it runs supervision and inspections of securities firms, shifting from a focus on ex-post detection to strengthening ex-ante prevention.
The FSS held a "securities firm audit workshop" at the main conference hall of the Korea Financial Investment Association in Yeouido, Seoul, on the 10th and emphasized and said it would strengthen "ex-ante preventive investor protection." Attending the workshop were Seo Jae-wan, assistant governor for the capital markets sector at the FSS, along with FSS executives and employees and auditors and audit officers from 23 securities firms.
Assistant Governor Seo said, "The top priority of capital market supervision and inspections is investor protection," adding, "We will completely overhaul our supervision and inspection operations to center on investor protection."
He also said, "We ask that the audit organizations of investment firms boldly break away from the existing ex-post detection mindset," and added, "Strengthen 'ex-ante preventive audits' by making investor protection the top internal control standard."
He also said that cases where securities firms prevent investor harm through their own audits will be actively taken into account in future inspections and sanctions. Assistant Governor Seo emphasized, "If the supervisory authority uncovers lenient, poor audits that turn a blind eye to investor harm, we will conduct strict inspections and impose sanctions."
The FSS said, "Through this workshop, we expect to redefine the internal audit organizations and work systems of securities firms from the perspective of 'ex-ante preventive investor protection' and to make all-out efforts to strengthen internal control capabilities," adding, "We will continue to examine the adequacy of internal control system operations going forward."