In a meeting with the head of the Korea Financial Investment Association and CEOs of 20 asset management firms, FSS chief Lee Chan-jin stressed the need for greater transparency in how fund managers vote on corporate matters including board appointments, executive pay, mergers and dividend policies on behalf of investors.
The meeting followed an FSS review, which found that many firms still used formulaic disclosures, giving investors little insight into how key company decisions were actually made.
The review showed that asset managers have become more active in exercising shareholder voting rights. The voting rate for public and private funds has improved from 79.6 percent in 2024 to 91.6 percent in 2025 and 91.8 percent this year. The proportion of votes cast against management proposals also increased to 8.2 percent from 5.2 percent over the same period.
Despite the improvement, the regulator said the quality of disclosures remained weak. Of the 285 asset managers reviewed this year, 121, or 42.4 percent, relied on generic explanations such as "little impact on shareholder interests" and "no harm to shareholder rights" instead of explaining the reasons behind their votes, making it difficult for investors to understand the basis for those decisions.
Asset managers need to improve these voting procedures and provide clearer disclosures so investors can properly assess whether voting decisions are appropriate," Lee said.
He also warned against misleading or exaggerated advertising in the country's fast-growing ETF market, saying investors often rely heavily on promotional materials when selecting products. Lee urged firms to ensure the accuracy of information through an internal review process, while working with liquidity providers to keep ETF market prices closely aligned with their net asset values.
Industry participants also raised concerns over excessive product competition, saying the industry should voluntarily limit the launch of ETFs that closely replicate competitors’ products to create a healthier market.
Lee also called on asset managers to channel more capital into promising companies and emerging industries, creating a cycle in which investment supports business growth and generates returns for investors.
The FSS said it plans to hold workshops in July and August for asset managers responsible for related disclosures to share information and provide examples of practices.
Meanwhile, Samsung Asset Management, NH-Amundi Asset Management and VIP Asset Management, three of the country's leading fund managers, were cited as examples of best practice in this year's review.
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