Financial Supervisory Service Governor Lee Chan-jin said the agency will conduct on-site inspections of securities firms where workouts are delayed or whose business practices are problematic to normalize real estate project financing (PF) business sites. He also stressed the need for securities firms to build internal control systems and actively supply venture capital.
The Financial Supervisory Service held a roundtable of securities firm chief executive officers (CEOs) at the Korea Financial Investment Association in Yeouido, Seoul, on the afternoon of the 10th. Financial Supervisory Service Governor Lee Chan-jin, Korea Financial Investment Association Chairman Hwang Sung-yeob, and CEOs from 23 securities firms attended the roundtable.
The event was organized to discuss pending issues and direction in the securities industry and to hear the industry's recommendations.
Lee said "the 'KOSPI 5000 era' reflects marketwide confidence that our economy can continue dynamic, upward growth," but added there are several requests to ensure these results take root as a springboard for a leap forward.
First, Lee called for an aggressive reduction, saying securities firms' balances of nonperforming real estate PF loans remain higher than those of other sectors such as banks and insurers. "In the process of normalizing real estate PF, there must be no unfair handling of business that exploits a superior position," Lee said. "The Financial Supervisory Service will launch on-site inspections of securities firms where workouts are delayed or whose business practices are problematic."
He also said firms must build internal control systems based on autonomy and responsibility, not coercion and regulation. "This year, as the 'accountability map' is expanded to small and midsize securities firms, internal controls must operate effectively. The Financial Supervisory Service will continue to check how securities firms are running the system so it can be stably established," Lee said.
In addition, he urged speeding up the supply of venture capital so startups and venture companies can raise funds smoothly, building a sophisticated risk management system, and rigorously vetting high-risk products from the planning stage to ensure they are acceptable from investors' perspectives.
Attendees at the roundtable said they would make financial consumer protection the top value in management and that CEOs would closely examine internal controls.
In response, Lee said, "when efforts to protect customer interests and investors are reflected in a balanced way in key performance indicators (KPI), investor-friendly thinking can be felt," adding, "we will listen to on-the-ground difficulties with an open mind and spare no support as we think together about developing the capital market."