FSS to strengthen supervision of sales activities

Financial Supervisory Service (FSS) Governor Yoon Suk-heun speaks about the agency's reorganization on Jan 23. / Korea Times file

By Kim Bo-eun

The Financial Supervisory Service (FSS) said Thursday it will strengthen supervision of financial firms' sales activities as a key task for this year.

To that end, the FSS decided to increase personnel in charge of supervising such activities, in its plan for 2020 unveiled the same day.

The agency said that supervision will focus on weeding out irregular activities, such as mismanagement of funds and mis-selling complex financial products by investment firms.

Such a response comes after the FSS was criticized over the Lime Asset Management incident that broke out last year for failing to properly monitor investment firms.

Investors of funds managed by Lime face major losses, as the hedge fund invested in bad assets. Investigations over the case are ongoing.

The FSS was also hit last year for its responsibility in the fiasco concerning banks' mis-selling of financial derivative products referred to as derivative-linked funds.

As part of efforts to prevent such incidents from recurring, the FSS said it would seek to issue a guide on non-deposit investment products to be handed out at banks, so that bank customers can double check the associated risks of such options.

The FSS said it will also monitor the market for unfair trade practices in election-related stocks ahead of the general election to take place on April 15.

In the meantime, the FSS pledged to strengthen risk management amid the coronavirus crisis.

The agency said it would upgrade risk monitoring systems to enhance capabilities for keeping watch over the financial market to ensure debts of households and the self-employed do not develop into systemic risks.