Financial Supervisory Service Chief Jeong Eun-bo Meets Securities CEOs: "Reconsidering Market Maker Penalties"

[Asia Economy Reporter Ji Yeon-jin] On the 23rd, Jeong Eun-bo, Governor of the Financial Supervisory Service (FSS), repeatedly emphasized that he is "reconsidering the scale of the penalty, including the amount of the fine," regarding the decision to impose a fine of 50 billion KRW related to market makers' market order disturbance activities.

Governor Jeong made this remark during a meeting with CEOs of securities firms held at the Kensington Hotel in Yeouido, Seoul, in the morning. Earlier, the FSS announced that it would impose fines totaling 48 billion KRW on nine securities firms for repeatedly disrupting market order through bid quoting. However, as there was strong opposition claiming that the level of sanctions against market maker activities for liquidity provision was excessive, Governor Jeong stated at last month's National Assembly audit and reiterated at this meeting that the matter is under reconsideration.

Earlier in his opening remarks, Governor Jeong also said, "We will secure predictability and acceptability of sanctions through sufficient communication," and added, "If securities companies voluntarily improve and take corrective actions, we will respect those results."

Regarding the direction of supervision and inspection of securities companies, he presented ▲ adherence to laws and principles ▲ harmony and balance between proactive and reactive supervision ▲ strengthening preventive supervision to protect financial consumers. He emphasized, "To this end, we will strengthen on-site, close-contact continuous monitoring functions and focus our capabilities on detecting risk-vulnerable areas in advance."

He continued, "In a situation where trust in the capital market is low following the private equity fund incident, if accidents such as incomplete sales occur again, the trust in the capital market will be irreversibly damaged," and urged, "As individual investors have recently increased significantly, securities companies should pay special attention to consumer protection through strengthening internal controls such as 'complete sales.'"

Governor Jeong also stated, "Along with institutional improvements in the underperforming retirement pension market, we will actively support the development of pension products that can achieve stable long-term returns, such as the introduction of default options for DC-type plans and the establishment of reserve management committees and preparation of operation plans for DB-type plans," and added, "To meet the diverse investment demands of the public, we will promote adjustments to risk values related to asset management in green finance such as carbon emission rights and listed REITs, as well as real estate finance."

At this meeting, the CEOs of securities firms agreed, according to the FSS, that in preparation for domestic economic uncertainties such as global economic instability, rapid increase in private debt, and financial imbalances, securities companies need to manage potential risk factors stably in addition to pursuing profitability.