Financial Supervisory Service Chief: "We Will Prevent a Second Private Equity Fund Crisis"... Cautious on Reinvestigation of Lime and Optimus Cases

Lee Bok-hyun, Governor of the Financial Supervisory Service, is delivering opening remarks at the "Financial Investment Sector CEO Meeting" held at the Korea Financial Investment Association in Yeongdeungpo-gu, Seoul, on the afternoon of the 28th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Lee Jung-yoon] Lee Bok-hyun, Governor of the Financial Supervisory Service, announced that he will prevent private equity fund incidents like Lime and Optimus by advancing the continuous monitoring system for funds. However, he was reserved about reinvestigating the Lime and Optimus incidents.

On the 28th, at the CEO meeting of the financial investment sector held at the Korea Financial Investment Association, Governor Lee explained, "We will strengthen the private equity fund market monitoring system by advancing the continuous fund monitoring system and integrating fund-related data management," adding, "We will prevent the occurrence of a second private equity fund incident." After the meeting, Governor Lee told reporters, "We will focus inspection capabilities on areas that may contain risk factors, such as a full inspection of private equity funds."

However, regarding past private equity fund incidents, he stated, "As I mentioned after taking office, apart from the fundamental matters and the ongoing full inspection, there is no particular plan to do anything at this stage." Earlier, on the 8th, when asked if he intended to revisit the Lime and Optimus incidents, Governor Lee said, "I understand that all private equity fund-related cases have been concluded individually and have already moved on." He added, "However, I am aware that some parts of society are raising concerns," and mentioned, "We will thoroughly check through our system to see if there is any aspect that needs to be reviewed."

At the meeting, Governor Lee also announced a policy to strengthen preventive supervision through a selective and focused approach under the regulatory total volume reduction policy. He explained to reporters, "Regarding the regulatory total volume, for example, we want to concentrate core capabilities on inspections or investigations that can be understood and agreed upon, such as intensive inspections or investigations of illegal short selling."

When asked whether he intends to propose a temporary ban on short selling to the Financial Services Commission as part of market stabilization measures, he replied, "We are comprehensively reviewing various measures," but added, "However, I understand that we cannot mechanically apply the same policy in the same way."