Financial Services Commission "Promoting Diversification of Sanctions for Unfair Trading Such as Account Payment Suspension"

Exchange and Capital Market Institute Hold Seminar to Strengthen Response to Unfair Trading

The government is pushing to introduce various sanctions, such as account suspension, to prevent unfair trading practices in the capital market.

A seminar to strengthen the response to unfair trading in the capital market, hosted by the Korea Exchange and the Korea Capital Market Institute and sponsored by the Financial Services Commission, was held on the 8th at the Korea Exchange in Yeouido, Seoul. Kim So-young, Vice Chairman of the Financial Services Commission, is delivering the congratulatory address. Photo by Heo Young-han younghan@

On the 8th, at the "Seminar on Strengthening Responses to Unfair Trading in the Capital Market" hosted by the Korea Exchange and the Korea Capital Market Institute, Kim So-young, Vice Chairman of the Financial Services Commission, stated, "We will restrict capital market transactions and executive appointments of unfair trading offenders, such as insider trading, market manipulation, and fraudulent trading, for up to 10 years and freeze accounts suspected of unfair trading to recover illicit gains."

Vice Chairman Kim emphasized that existing sanctions have limitations in responding to the diversification and complexity of unfair trading. This is because sanctions are mainly operated through criminal penalties and monetary measures, which take a long time to finalize. Furthermore, it is difficult to prevent the possibility of other victims arising from repeated unfair trading acts.

At the seminar, Kim Yoo-sung, a professor at Yonsei University Law School, stressed the need to supplement non-monetary sanctions. He proposed measures such as restricting transactions by unfair trading offenders, limiting the appointment of executives in listed companies, and publicly disclosing facts of unfair trading acts.

Additionally, Jung Soo-min, a research fellow at the Korea Capital Market Institute, introduced overseas systems that disclose the real names of offenders and details of violations, stating that Korea also has great potential to actively utilize information disclosure to enhance the effectiveness of sanctions.

During the subsequent discussion, Kim Jung-yeon, a professor at Ewha Womans University Law School, emphasized, "Since there has been a lack of building 'trust' in the capital market so far, discussions should continue to ensure that various non-monetary sanctions such as suspect information disclosure and account freezing are established constitutionally and legally."

Lee Jung-soo, a professor at Seoul National University Law School, said, "It is necessary to consider the balance between punishment and sanctions within the Capital Markets Act," and added, "The introduction of public interest litigation, where supervisory authorities file class-action lawsuits to recover funds and distribute them to victims, can be considered."