As the KOSPI index topped 7,000 points for the first time ever on the previous day, financial authorities held a meeting to prepare regulations related to illegal finfluencers.
According to financial authorities on the 7th, the Financial Services Commission held the first meeting on the previous day, chaired by Capital Markets Director Byun Je-ho, to improve the system for regulating illegal activities by finfluencers (financial influencers).
At the meeting, the Financial Services Commission (FSC) was said to have reviewed what constitute representative types of illegal activities—such as finfluencers leading unfair trading or providing inappropriate investment information—and examined whether crackdowns are possible under the current regulatory regime.
For example, if a finfluencer recommends a specific stock without filing a report as an investment advisory business of a similar nature, it could constitute a violation of Article 101 of the Financial Investment Services and Capital Markets Act. However, critics note that there are limits to proactive crackdowns under the current regulatory framework.
In particular, the authorities are also deliberating on how to police finfluencers' conflicts of interest.
The authorities are said to have in mind foreign cases that stirred controversy, in which finfluencers set up trading positions on specific stocks in advance and then produced content related to those stocks.
The Financial Supervisory Service's artificial intelligence (AI) real-time monitoring system is also expected to be used actively. The Financial Supervisory Service (FSS) had previously filtered finfluencers' illegal activities manually, but recently shifted its monitoring regime to an AI-based real-time surveillance system.
The explanation is that the system reads collected videos with AI to classify the degree of illegality, and analyzes high-risk cases by linking them with tips and market information. A dedicated monitoring task force to oversee finfluencers' illegal activities is also said to have been launched this month.
Stock market volatility has widened further since the outbreak of war with Iran. With the KOSPI index breaking through the 7,000 level for the first time ever on the previous day and investor interest peaking, the authorities are watching for the possibility that illegal finfluencers will become more rampant.