Assemblyman Song Jae-ho Proposes Amendment to the Capital Markets Act Mandating Regular Supervision of Korea Exchange

[Asia Economy Reporter Koo Chae-eun] Song Jae-ho, a member of the Democratic Party of Korea, has proposed a bill to establish the basis for regular supervision of the Korea Exchange.

According to the National Assembly on the 5th, Song Jae-ho, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea (Jeju-si Gap), has jointly proposed an amendment to the "Act on Capital Market and Financial Investment Business" (Capital Market Act) that requires the Financial Services Commission to have an obligation for regular supervision of the Korea Exchange.

The Korea Exchange was a public institution subject to audits by the National Assembly, the Ministry of Strategy and Finance, and the Board of Audit and Inspection until 2015, but it was removed from the category of public institutions due to reasons such as the dissolution of its monopoly structure under the Capital Market Act. Since then, it has been excluded from the jurisdiction of the National Assembly's standing committees. It is currently only subject to management evaluations, reporting, and inspections by the Financial Services Commission.

The amendment proposed by Representative Song adds a proviso to Article 410 of the current law, which allows inspection of the Exchange's operations, assets, and budget execution, to ensure regular inspections are conducted. The Financial Services Commission is to have the Financial Supervisory Service carry out the inspections, with the specific inspection methods and procedures delegated to be stipulated in the enforcement decree as deemed appropriate.

Additionally, the amendment mandates that the Financial Supervisory Service submit the inspection results, including the contents inspected and the Korea Exchange's action plans, to the Financial Services Commission, and requires submission to the National Assembly's relevant standing committee upon request.

Representative Song stated, "The market position held by the Korea Exchange is absolute, and its influence can affect all citizens participating in the securities market; however, effective supervision has not been conducted so far. Since this amendment specifies a reasonable public role in the operation of the Exchange without disrupting the current legal framework, it will contribute to enhancing the stability of the securities trading market."