0
/ Financial Supervisory Service (FSS).

Amid growing volatility in domestic and global stock markets, South Korea’s Financial Supervisory Service (FSS) has urged securities firms to refrain from promoting high‑risk and concentrated investments. The regulator expressed concern that advertising and marketing focused solely on returns—especially amid the overseas stock investment boom—could lead to investor losses, and called for stronger internal controls.

On June 11, the FSS held a “meeting with internal auditors to strengthen responses to market volatility” with 12 securities firms. Attendees included major investment companies such as Mirae Asset, Korea Investment, Samsung, NH Investment, KB, Shinhan, Hana, Kiwoom, Meritz, Daishin Securities, as well as Toss Securities and KakaoPay Securities.

The FSS noted that with global uncertainty driving volatility in stock and foreign‑exchange markets, it is necessary to review internal controls over overseas investment brokerage and advertising. It warned that sales practices highlighting only returns or encouraging high‑risk, concentrated investments will face strict enforcement.

Seo Jae‑wan, deputy governor of the FSS’s financial investment division, stated: “We will respond firmly to irresponsible sales practices that emphasize returns while promoting high‑risk, concentrated investments in specific sectors.”

The regulator also stressed the need to protect investors from excessive exposure to currency‑exchange risks amid intensifying competition in overseas stock marketing. It instructed securities firms’ audit departments to closely monitor sales practices that may stimulate excessive investor expectations.

The FSS outlined inspection areas including overseas stock advertising and event operations, management systems for local brokers abroad, and methods for calculating foreign deposit fees. It also emphasized the need to strengthen monitoring of excessive overseas stock trading and accounts with large losses.

The FSS said it will continue to review securities firms’ sales practices and risk‑management systems to prevent investor harm if market volatility expands further.

                                                                                                           Park Joo‑yeon