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FSS |
[Alpha Biz= Reporter Kim Sangjin] The Financial Supervisory Service (FSS) of South Korea plans to strengthen its sanctions against financial firm employees who engage in illegal trading of financial investment products by allowing for the possibility of a "dismissal request" (termination).
On November 25, sources from the financial sector reported that the FSS had recently pre-announced a revised draft of the Regulations on Inspections and Sanctions for Financial Institutions.
The proposed amendments focus on updating sanction criteria for various violations, including mis-selling of financial products, employees engaging in proprietary trading of financial investment products, insurance fraud, and breaches of internal control obligations.
Under the revised rules, employees who engage in illegal trading of financial investment products may face dismissal requests if their actions:
Disrupt the fair and orderly operation of the capital market.
Cause significant social or economic controversy, such as damaging the credibility of their financial institution or the financial industry by being publicly exposed in the media.
However, dismissal requests can only be imposed if there is clear evidence of intentional wrongdoing.
The draft also includes changes to institutional sanctions, allowing for "post hoc consolidation" of violations. Previously, the FSS imposed separate penalties for each instance of mis-selling discovered during inspections. Under the new rule, additional penalties may not be applied if the violations are deemed to be part of the same legal infraction.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
