Financial Supervisory Service (FSS) said on the 25th that it prepared a revision to the fund registration disclosure form to reflect investor expectations from the fund design and manufacturing stage, prompted by last year's full-loss incident involving a Belgian real estate fund.
First, the asset manager must attach its own checklist regarding on-site due diligence and the evaluation opinion of the internal control department, and obtain signatures from the CEO, the compliance officer, and the risk management officer.
In addition, it must visually present the potential loss range through a fund profit-and-loss performance graph that reflects changes in real estate prices and loan covenant conditions.
It is also necessary to include scenario analysis results so that investors can intuitively grasp the scale of losses due to factors such as interest rates and deteriorating vacancy rates. The scenarios must include a situation in which the annual dividend rate is 0% and situations in which the fund's liquidation rate of return is minus (-) 50% and -100%.
Financial Supervisory Service (FSS) explained that the disclosure revision will strengthen the asset manager's self-verification function from the design and manufacturing stages of overseas real estate funds and clarify responsibility for product defects.
An official at Financial Supervisory Service (FSS) said, "We will continue to carry out the tasks under the consumer protection improvement roadmap without delay."