With the recent discussions about the potential relocation of the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) to regional areas, securities firms and asset management companies are on high alert. If these regulatory bodies move, private financial institutions may be compelled to establish offices in those regions.
According to the financial investment industry on August 25, securities firms and asset managers are closely monitoring the possibility and specifics of the FSC and FSS's relocation. Initially, it was expected that the Cabinet meeting on this day would discuss plans for the relocation of some administrative agencies, including the FSC, but those items were reportedly removed from the final agenda. However, the discussions about relocation have not been completely abandoned, indicating that further talks may occur.
The financial authorities frequently consult with securities firms and asset managers regarding the approval of financial products, disclosures, inspections, and supervision. There are concerns that if the physical distance between the authorities and financial companies increases, the burden of work could grow, especially during the launch of financial products like exchange-traded funds (ETFs), which require detailed explanations and practical discussions.
An official from an asset management company stated, "Most tasks can be handled through documents or phone calls, but when launching new products or discussing regulations, in-person meetings are often necessary. If both the authorities and the industry move to regional areas, the burden on staff who need to travel could increase significantly."
There is a precedent for this situation. After the National Pension Service moved its headquarters to Jeonju, some asset management firms, including IBK Asset Management, Hanwha Asset Management, and NH Amundi Asset Management, have established or are preparing to set up offices in Jeonju. They have done this to maintain operational connections with the National Pension Service, a key institutional investor, necessitating the deployment of personnel to Jeonju. The industry anticipates that if the FSC and FSS relocate, private financial investment companies may also need to allocate additional personnel and resources.
A representative from the securities industry remarked, "Since the relocation of the financial authorities has not been confirmed, we are currently in a wait-and-see phase. However, if the move becomes a reality, private financial firms will have no choice but to consider travel or establishing separate operational bases for tasks that require consultation with the authorities."
* This article has been translated by AI.
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