The Financial Supervisory Service said securities and futures firms must run their duty maps effectively after adoption, and that it will actively expand consulting inspections to help companies voluntarily strengthen their internal control systems.
The Financial Supervisory Service (FSS) held a roundtable on the morning of the 11th at the Korea Financial Investment Association in Yeouido, Seoul, for auditors and compliance officers at securities and futures firms. The meeting was attended by Associate Vice Governor Seo Jae-wan of the capital markets division, as well as the Korea Financial Investment Association and auditors and compliance officers from 63 securities and futures firms.
At the event, the Financial Supervisory Service (FSS) briefed attendees on recent key inspection findings and this year's inspection priorities, and guided firms to build internal control systems focused on "preemptive investor protection." It also shared the results of its review of the adoption and operation of duty maps across all securities and futures firms and called for the system to take firm root.
Associate Vice Governor Seo Jae-wan said, "Investor interest and expectations for our capital market have grown more than ever," adding, "The 'responsibility to protect investors' of financial investment firms, which serve as a bridge between the capital market and investors, has also become weightier."
However, recent inspections found that some continue to prioritize short-term profit seeking over investor interests. Seo stressed, "Auditors and compliance officers must take a more preemptive and proactive role so that investor-protection-centered internal controls take hold as a companywide culture."
This year's key inspection directions presented by the Financial Supervisory Service (FSS) include: ▲ intensive inspections of internal controls at each stage of product handling ▲ swift and mobile inspections of acts that cause investor harm ▲ expansion of consulting inspections to strengthen voluntary internal controls.
Seo also noted that adopting duty maps can be a new turning point for strengthening investor protection and spreading a culture of internal control accountability at financial investment firms, and asked for special efforts to ensure that the allocation and operation of duties are managed and supervised effectively.
To that end, the Financial Supervisory Service (FSS) divided the results of its recent review of duty maps at large firms into categories such as design of control measures, implementation checks, and overall management by the compliance department, then introduced specific best practices and areas needing improvement so they can be used as references when adopting and operating duty maps going forward.
In addition to "compliance inspections" aimed at sanctioning illegal or unfair acts that cause investor harm this year, the Financial Supervisory Service (FSS) also plans to expand "consulting inspections." For example, an inspection team would review and diagnose investor protection systems in the product design, sales, and management processes, identify weaknesses, and provide improvement suggestions; the company would then communicate with the team to devise and implement voluntary internal control enhancements.
Going forward, the Financial Supervisory Service (FSS) plans to improve business practices through diverse communication with the financial investment industry so that preemptive investor protection can take root as the core of internal control culture.
Seo said, "The matters discussed at today's roundtable must be shared with all management, including the CEO, the chief officer responsible for internal controls at each firm," adding, "At the industry level, please also strengthen mutual cooperation by actively sharing and benchmarking outstanding internal control cases."