It has been confirmed that the Financial Services Commission is reviewing the establishment of a "joint response team to eradicate stock price manipulation" in collaboration with the Financial Supervisory Service and the Korea Exchange. This comes as President Lee Jae-myung expressed a strong will to eliminate unfair transactions in the capital market and ordered active promotion of system improvements and organizational and personnel expansion. The purpose is for the three agencies to respond immediately to unfair transactions as one.
According to the government and the financial investment industry on the 17th, the Financial Services Commission is internally reviewing plans to establish the "joint response team to eradicate stock price manipulation." It is reported that the financial authorities began drafting plans immediately after President Lee visited the Korea Exchange's market surveillance committee in Yeouido, Seoul, on the 11th and said, "We will introduce a 'one-strike-out system' for unfair transactions and impose penalty surcharges to recover unjust profits," ordering related improvement measures.
At that time, President Lee stated, "The role and responsibility of the market surveillance committee, which is in charge of eradicating unfair transactions, is significant," and instructed to improve the system to quickly detect unfair transactions in response to new tactics, and to actively review plans for organizational and personnel expansion for rapid investigation.
A source familiar with the internal affairs of the financial authorities noted, "VIP (President Lee) mentioned only one market surveillance committee, but in reality, several agencies participate in detecting and investigating unfair transactions," adding, "The idea of establishing a joint response team to eradicate stock price manipulation emerged as part of the effort to overhaul the entire system this time."
Responding to unfair transactions in the capital market follows procedures such as detecting allegations, deliberation (exchange) → investigation (Financial Services Commission and Financial Supervisory Service) → prosecution (prosecutors). Currently, the Financial Services Commission regularly holds the "unfair transaction investigation and deliberation agency council" with the Financial Supervisory Service and the prosecutors to share the status of responses and identify cooperation tasks among agencies. However, since President Lee has called for a stronger response, there are plans to establish a joint response team to actively confront stock price manipulation.
Recently, media reports indicated that the Financial Services Commission is considering increasing personnel responsible for capital market investigations from around 30 to over 100, which is believed to have emerged during discussions of the idea of establishing a joint response team to eradicate stock price manipulation. A source stated, "There was an opinion to form the joint response team with a scale of over 100 people."
However, the Financial Supervisory Service is reported to be somewhat negative about the establishment of the joint response team to eradicate stock price manipulation. An official from the authorities said, "The Financial Supervisory Service prefers to retain the authority for compulsory investigations, such as searches and seizures, rather than establish a joint response team." The Financial Services Commission maintains that granting compulsory investigation authority to the Financial Supervisory Service, a public-private partnership, is inappropriate.
Amid discussions on reorganizing financial authorities following the inauguration of the new government, there is fierce competition among agencies to gain as much control as possible over capital market investigations. The Financial Services Commission has remained silent on whether it will announce the idea of the joint response team to eradicate stock price manipulation at the National Planning Committee's work report on the 19th. A Financial Services Commission official said, "Nothing has been confirmed," maintaining silence on the matter.