FSS chief warns of business suspension over overseas stock misconduct

Dec 19, 2025, 09:16 am

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Lee Chan-jin, governor of the Financial Supervisory Service, speaks during a meeting with asset management firm CEOs at the Korea Financial Investment Association in Yeongdeungpo-gu, Seoul, on December 17. / Source: Yonhap News

Lee Chan-jin, governor of South Korea’s Financial Supervisory Service (FSS), warned on December 18 that authorities could suspend securities firms’ overseas stock businesses if illegal or unfair practices are found, as he criticized what he described as sales tactics that prioritize short-term fee income over investor protection.

According to the FSS, Lee made the remarks during a financial conditions review meeting held earlier that morning.

Lee said competition among brokerages to expand market share in overseas securities brokerage has been increasingly overheating, while practices that “put performance ahead of investors’ interests” persist. He voiced concern that some firms remain fixated on short-term results, despite growing risks borne by retail investors.

His comments come as securities firms’ profits from transactions and currency exchange fees have risen year after year, while many individual investors are posting losses in their overseas stock accounts. Losses in overseas derivatives investments were estimated at around 370 billion won as of the end of October, underscoring the scale of potential investor harm.

In response, Lee said the FSS would expand the scope of its ongoing review of brokerages’ overseas investment businesses. If signs of wrongdoing are identified, he said, the regulator will immediately shift to on-site inspections.

Lee also said the FSS would respond strictly—including by ordering a suspension of overseas stock sales—if it uncovers illegal or unfair conduct such as exaggerated advertising that misleads investors, recommendations that do not match an investor’s risk tolerance, or inadequate explanations of investment risks.

Separately, Lee held a meeting with CEOs of major securities firms the same day, urging them to conduct a broad review of overseas securities brokerage operations and correct problems without delay. He also called for reforms to sales incentive systems so that investor interests are placed first.

#Financial Supervisory Service #Lee Chan-jin #overseas stocks #brokerage firms #on-site inspection