FSS to strengthen support for overseas counterparts

The Financial Supervisory Service (FSS) vowed to continue fully supporting overseas business expansions by Korean financial companies, particularly in Southeast Asia, as the staterun financial watchdog agency will soon begin implementing an employee exchange partnership with its Indonesian counterpart during the second half of this year.

Lee Bok-hyun, the governor of the FSS, highlighted that he hopes the employee exchange program with the Indonesian Financial Services Authority (OJK), finalized during his visit to the country in May, will facilitate a favorable ambiance for Korean financial companies’ further inroads into the Southeast Asian market.

“When Korean financial companies expand businesses into overseas markets, they become largely influenced by local financial authorities’ regulative frameworks. That’s why we thought it would be desirable for the FSS to strengthen partnerships with counterparts from overseas countries, especially where Korean financial companies attempt to make inroads into,” FSS chief Lee told The Korea Times during a press conference held in Seoul’s financial district of Yeouido on Thursday.

Lee, who marks the one-year anniversary since he took the helm of the agency last June, explained that Korea’s major financial groups have also requested him to strengthen networking ties with foreign financial authorities so that the overseas subsidiaries of the financial groups can smoothly operate their businesses in countries beyond the Korean border.

He said these considerations were behind his five-day investor-relations (IR) visit to three countries — Thailand, Singapore and Indonesia — in May. Lee added that strengthened partnerships between the supervisory agencies would yield better mutual understandings, contributing to Korean financial companies’ acceptance in those overseas markets in the long term.

“The FSS will fully support financial companies’ overseas expansion by inducing strengthened global competitiveness of local financial sector. As the chief of the FSS, I will be spearheading widespread support for local financial firms’ globalization,” FSS chief reiterated during the press conference.

At the same time, the chief of

the watchdog agency stressed that he and other heads of financial authorities have been placing a priority on ameliorating local financial regulations to meet the global standards of advanced capital markets.

“As the autonomy of market participants is one of the strongest features of the capital market, the financial authorities have been trying to find a fine balance between moves towards maximal deregulation and appropriate punitive measures on financial crime offenders. The authorities have also been improving legal frameworks of local capital markets, as seen in cases of strengthened protection of minor shareholders and further opening up of foreign exchange markets, to meet the global standards,” Lee explained.

Regarding the ongoing partial ban on short-selling that has been in place since May 2020, FSS chief views it is still early to lift the ban.

“It’s true that KOSPI’s performance this year seems to be better than other major benchmark indexes of some other countries. Yet, the market is still facing a high level of volatility and anxiety due to high interest rates, requiring a tight monitoring of the market. This is more so as there are many investigations ongoing over illegal short-selling,” Lee said during the press conference.

“Once the market shows stability, the lifting of the ban on short-selling could be considered, but only after the authorities have also fully examined measures to resolve the local short-selling system’s so-called ‘uneven playing field’ (that retail investors have argued treats them unfairly, as compared to foreign investors),” he added.

The star prosecutor-turned-financial supervisor also pledged a stern response to market manipulators, in order for fairness and order in the capital market to take firm root.