Provocative phrases in financial investment advertisements, such as "○○ Electronics 100,000 won, now is the chance" and "It will be too late after ○○○○ goes public," are expected to disappear. Financial authorities are significantly tightening regulations on financial investment company advertisements by establishing an advertising committee within the Financial Investment Association and including video ads on securities firms' YouTube channels in the review process. The criteria for imposing fines for advertising violations will also be newly established.
On September 1, the Financial Supervisory Service (FSS) and the Financial Investment Association (FIA) held a briefing on comprehensive improvements to advertising practices for financial investment companies, attended by compliance officers, consumer protection officers, and advertising personnel from over 70 financial investment firms.
The most significant change is the expansion of the FIA's advertising review scope. The FIA plans to establish an 'Advertising Committee' that includes participation from industry, consumer groups, and the media to decide on key policies related to advertising reviews. Previously, there was no dedicated body for advertising-related policies, which limited the ability to officially incorporate external opinions from consumers.
Video advertisements produced on financial investment companies' own channels will also be subject to FIA review. This includes newly listed ETFs, high-risk financial investment products, and products designated by the Advertising Committee. Previously, video ads on companies' own YouTube channels were excluded from FIA review, leading to discrepancies in self-review standards among companies.
New criteria for imposing fines for advertising violations will be established. The FIA aims to enhance the predictability of sanctions by specifically defining detailed judgment factors, such as the motives and outcomes of the actions, thereby strengthening the effectiveness and fairness of penalties.
The internal advertising review procedures of financial investment companies will also be reinforced. They will be required to review whether promotional content that induces trading of specific stocks is included in external information provided, such as market analysis materials. Participation of the consumer protection officer (CCO) in the advertising review process will be mandatory. This change is intended to address previous concerns that consumer protection perspectives were insufficiently considered in advertising reviews, allowing CCOs to assess potential consumer harm in advance. For advertisements utilizing online channel operators like YouTubers, a step-by-step checklist will be established for contract review and post-management.
Post-publication management will also be strengthened. Financial investment companies must promptly verify that published advertisements align with the final review and conduct regular checks at least once a year. The FSS and FIA plan to pre-announce related regulatory amendments in early September, gather feedback, and complete revisions by mid-October, with the improvements set to take effect in January 2027.
Earlier this year, financial authorities, the FIA, and the asset management industry launched a task force to improve ETF advertising regulations and have been discussing related matters. The FSS previously issued warning messages regarding misleading advertisements during meetings with compliance officers from asset management firms and requested submissions of advertising execution records for review.
Seo Jae-wan, Deputy Governor of the FSS, expressed concern over the recurring issue of misleading and exaggerated advertisements in the financial investment industry, stating, "We will hold the companies and their employees accountable for false and exaggerated advertisements that hinder rational investor judgment."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.