The Financial Supervisory Service ordered comprehensive financial investment companies to strengthen risk management and investor protection in the short-term notes and integrated investment account (IMA) areas.
The Financial Supervisory Service on Apr. 21 held a "C-level executives meeting on securities firms' short-term notes and IMA institutional sector" at its office in Yeongdeungpo-gu, Seoul, and stated accordingly. Attending were Deputy Vice Governor Seo Jae-wan, the head of the Capital Markets Supervision Department, and the heads of operations and audit institutional sector at seven comprehensive financial investment companies.
In opening remarks, Deputy Vice Governor Seo said, "As momentum has been created for a full-fledged shift to productive finance, market expectations are high for the role of securities firms in supplying venture capital," and emphasized, "Comprehensive financial investment companies must establish thorough internal controls so there is no neglect of investor protection and risk management."
The Financial Supervisory Service in particular presented strengthening liquidity management as a key task. It urged firms to check the liquidity of assets operated with short-term notes to secure capacity to respond even under stress conditions such as increased market volatility, and, in the case of IMAs, to closely review liquidity at the stage of selecting investment assets so there are no disruptions to the recovery of investor funds before maturity.
It also called for stronger internal controls. The Financial Supervisory Service emphasized the need for ongoing checks, led by audit departments, on whether operational suitability and investor protection mechanisms actually function.
It also mentioned elevating the role of comprehensive financial investment companies in connection with expanding the supply of venture capital. The Financial Supervisory Service, through measures such as the "best practice standards related to corporate credit extension," is guiding the strengthening of corporate finance functions while requesting higher standards in credit extension review and risk management.
Participants agreed that overall soundness is good given the capital strength and performance of comprehensive financial investment companies. However, they said they would reinforce the risk management framework to expand productive finance and reexamine internal controls throughout the entire process of operations and sales.
Meanwhile, since their introduction in 2017, the balance of short-term notes grew rapidly to 54.4 trillion won as of the end of March this year. Since their introduction in 2025, IMAs have expanded to about 2.8 trillion won.