FSS Governor Holds Roundtable with CEOs of 20 Asset Management Companies
Lee Chanjin, Governor of the Financial Supervisory Service, met with chief executive officers (CEOs) from the asset management industry and called for the thorough internalization of investor protection principles and a shift toward productive finance. He also made it clear that the agency will maintain a strict supervisory stance against short-term performance-driven excessive competition and copycat products.
On December 17, the Financial Supervisory Service announced that Governor Lee presided over a roundtable meeting at the Korea Financial Investment Association’s main conference room in Yeouido, Seoul, attended by Seo Yuseok, Chairman of the Korea Financial Investment Association, and CEOs from 20 asset management companies. The meeting was organized to share directions on investor protection, supervision, and inspection, as well as to discuss the outlook for the asset management market and listen to industry proposals.
In his opening remarks, Governor Lee stressed the need to redefine the role of the asset management industry, noting, “Both domestic and global economic environments are facing uncertainty, and the rapid acceleration of artificial intelligence (AI) and digital transformation is quickly reshaping business models in both industry and finance.”
He went on to explain the necessity of internalizing the principle of putting investors first. “The investor protection that the Financial Supervisory Service pursues is about completely aligning the perspectives of investors, asset management companies, and supervisory authorities across all stages-design, manufacturing, and sales,” he said. “Risks must be communicated clearly and concretely from the investor’s perspective, and thorough internal verification must be conducted at the product design stage.”
He also urged restraint from excessive competition to enhance the competitiveness of the fund industry. He pointed out that recent issues such as product concentration, overheated competition, cases of non-compliance with the diversification principle in target date funds (TDFs), and the neglect of public offering funds by investors are undermining the competitiveness of asset management companies.
He emphasized, “Reckless competition and the erosion of customer trust will ultimately weaken the competitiveness of the asset management industry, causing consumers to leave the market. We will continue to enforce strict supervision against self-destructive competition.”
He also highlighted the need to strengthen fiduciary responsibility as a watchdog of the capital market. Governor Lee stated, “Asset management companies, as fiduciaries, represent the interests of investors and are key players in driving the sound development of the capital market. When necessary, actively expressing opinions on investee companies to protect investor rights is how asset management companies fulfill their role as ‘watchdogs’ of the capital market.”
He added, “The Financial Supervisory Service will also support the revision and implementation review of the stewardship code to ensure that decision-making within asset management companies centers on customer interests.”
Governor Lee further requested the industry to play a role in the transition to productive finance. “The asset management industry should create a constructive cooperation and division of labor structure among participants in the venture capital ecosystem by supporting early-stage businesses such as startups,” he said. “Please actively contribute to building a K-venture ecosystem with independence and resilience by establishing a professional evaluation infrastructure.”
The Financial Supervisory Service also plans to support this by building a platform that connects financial markets with innovative small and venture businesses, improving product and licensing review systems, and enhancing capital soundness regulations.
CEOs of asset management companies agreed on the need to shift toward productive finance and stated that they would strengthen their role as a bridge between the public and the capital market. They also explained that they would actively leverage their accumulated management capabilities to ensure the successful establishment of Business Development Companies (BDCs) and National Growth Funds.
They requested policy and institutional support for the launch of virtual asset-related products and asked for funds to be included as targets for long-term investment incentives. In addition, they called for supplementary tax benefits, such as separate taxation on dividends for fund investors.
Finally, Governor Lee emphasized, “The asset management industry should consider its social responsibility not as ‘finance that simply makes money from money,’ but as ‘finance that grows household assets and the economy.’ The opinions presented by the industry will be faithfully reflected in future investor protection and supervisory work.”
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