If the Financial Supervisory Service pushes ahead with a reorganization going forward, it will be required to consult with the Financial Services Commission. The Financial Supervisory Service, an agency under the Financial Services Commission, already discusses reorganization in the process of negotiating the following year's budget and headcount with the Financial Services Commission, but there is no rule that it must consult.
According to financial authorities on the 3rd, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) are discussing creating a new rule to make consultation on reorganizations mandatory. This follows the FSS agreeing to come under tighter control this year in exchange for avoiding designation as a public institution. The FSC and the FSS are reviewing specifying the mandate in an FSC directive, and they also plan to spell out the scope that would require consultation.
After concluding consultations with the Financial Supervisory Service (FSS), the Financial Services Commission (FSC) plans to submit a reform plan including the relevant details to the Ministry of Economy and Finance's Public Institution Management Committee next year. The committee is expected to review whether to redesignate the FSS as a public institution based on those details.
Once the rule is created, the level of the Financial Services Commission (FSC)'s control over the Financial Supervisory Service (FSS) is expected to be further strengthened. That is because if the FSC points out problems with the FSS's reorganization, it will be difficult for the FSS to proceed on its own. The government this year put off a decision on designating the FSS as a public institution and decided to review it again next year. The government made enhanced public interest and transparency a condition for the deferral and decided to strengthen oversight by the competent ministry, the FSC, in terms of management.
The Financial Supervisory Service (FSS) decided to spell out the consultation procedures with the Financial Services Commission (FSC) when adjusting headcount or reorganizing. It must also newly disclose detailed records of the chief's business expenses and items related to environmental, social responsibility, and corporate governance improvement (ESG). An FSS official said, "As calls for reform around the FSS are growing, we plan to accelerate the related discussions."