Financial Services Commission strengthens requirements for written resolution by special envoy of Financial Supervisory Service... Face-to-face voting is virtually mandatory

Reasons for written resolution are limited to ‘infectious disease outbreak, natural disaster, etc.’ Reporting obligation of the Chairman of the Securities and Exchange Commission

Reinforcement of protection against abuse of authority... Terminology has also been revised in line with the reform of the criminal justice system.

(Seoul = Yonhap News) Reporter Bae Young-kyung = The Financial Services Commission has strengthened mechanisms to prevent abuse of authority by the Financial Supervisory Service's Capital Market Special Judicial Police (Special Police).

The Financial Services Commission minimized the reasons for the written resolution of the Investigation Review Committee, which decides to initiate an investigation, and effectively made face-to-face resolution mandatory.

According to the financial authorities on the 15th, the Financial Supervisory Service gave an administrative notice until the previous day of the amendment to the Capital Market Special Judicial Police Service Rules, which includes the revision of the Financial Supervisory Service's Capital Market Special Investigation Investigation Committee operation plan.

The amendment includes provisions to strengthen the written resolution requirements of the Financial Supervisory Service's Capital Markets Special Envoy's Subcommittee. Previously, it was stipulated that a bill could be decided in writing ‘when the chairperson recognizes that it is unavoidable’, and a written statement of reasons explaining the unavoidability had to be attached.

However, the amendment stipulates that bills be passed in writing 'only when face-to-face meetings are recognized as realistically difficult, such as an outbreak of an infectious disease, natural disaster, or other similar cases.' Written voting requirements were minimized, effectively making face-to-face voting mandatory.

In March of this year, the Financial Supervisory Service's Capital Market Special Investigation Authority was granted the right to investigate, allowing the investigation case to be converted to a special investigation through the Investigation Committee without the Securities and Futures Commission reporting or notifying the prosecution. Previously, it was necessary to go through a series of processes, including the Securities and Exchange Commission's complaint and notification to the prosecution, and the prosecution's decision to initiate a special investigation after being transferred to the prosecution, but this process was shortened by granting recognition investigation rights.

Although the speed of investigation has been improved with the granting of investigative authority, concerns about misuse of authority have also been raised. It appears that the authorities' intention through this revision is to strike a balance between rapid investigation and prevention of enlargement of authority.

The amendment also established a new regulation requiring the head of the relevant investigation department to report the results to the Chairman of the Securities and Exchange Commission when converting an investigation case into an investigation.

An official from the financial authorities explained, "This is a measure taken by the Securities and Exchange Commission, the legal subject of the investigation of unfair transactions in the capital market, to provide follow-up management so that even if the investigation case is converted to an investigation and criminal punishment is imposed, administrative punishment such as the imposition of a fine can be imposed separately."

In this revision, terminology has been adjusted in line with the reform of the criminal justice system to avoid confusion ahead of the launch of the Public Prosecution Office next month.

Accordingly, within the scope of the investigation initiated by the Financial Supervisory Service's Special Envoy for Capital Markets, the existing 'cases led by prosecutors' will be changed to 'cases transferred to the head of the Serious Crimes Investigation Office'.

In addition, as the relationship between the prosecutor and the special envoy was changed to 'mutual cooperation', some expressions were modified from the special envoy's 'reporting' to the chief prosecutor of the local prosecutor's office at the start of the investigation to 'notifying' the head of the Central Investigation Office or the head of the local public prosecution office or branch office.