The flag of the Financial Supervisory Service flutters in Yeouido, Seoul. /Courtesy of News1

The National Planning and Coordination Committee, which is tasked with the role of the new government transition committee, will receive a work report from the Financial Supervisory Service (FSS) on the 24th. The FSS plans to focus on reporting measures to eradicate unfair trading and manage household debt, which are key pledges of President Lee Jae-myung.

The key issue is whether the government will voice opinions regarding the core task of overhauling the 'financial supervisory system.' The National Planning and Coordination Committee is extensively reviewing plans to separate the Financial Consumer Protection Division within the FSS and transfer the monitoring and supervision functions of unfair trading to a dedicated body. It is reported that the Financial Services Commission (FSC), which is at a crossroads regarding its future, did not mention organizational restructuring during last week's work report.

According to the financial sector on the 23rd, the Economic Division 1 of the National Planning and Coordination Committee will receive a work report from the FSS at 2:30 p.m. on the 24th at the FSS headquarters in Yeouido, Seoul. Initially scheduled for the 26th, the work report was moved up by two days as a result of scheduling adjustments by the National Planning and Coordination Committee.

The FSS is an organization under the Financial Services Commission and is not a government ministry, thus it is not obligated to submit a work report to the National Planning and Coordination Committee. However, the FSS is said to have already communicated its intention to present a work report to the National Planning and Coordination Committee. This appears to take into account the fact that it has not been able to dispatch a planning or expert member to the current National Planning and Coordination Committee, making it difficult to voice its concerns. During the transition committee of former President Yoon Suk-yeol, three employees from the FSS were dispatched.

The work report is expected to mainly address measures to eradicate unfair practices in the capital market, such as stock price manipulation and market distortion, as well as strategies to revitalize the capital market. President Lee Jae-myung noted during his visit to the Korea Exchange Market Surveillance Committee on the 11th, "Let’s fully open an era of a 5,000 stock index" and introduced the 'one strike and you're out' policy and measures for recovering penalty surcharges from unfair gains. He also reaffirmed his intention to amend commercial laws.

Graphic=Son Min-kyun

The financial sector's attention is focused on whether the overhaul of the financial supervisory system will be discussed during the work report. Currently, the domestic financial policy function handled by the Financial Services Commission is set to be transferred to the Ministry of Economy and Finance (the name is tentative, as it excludes budget and planning functions), and there are strong discussions about establishing a financial supervisory committee that combines supervisory policies with the FSS. It is expected that the consumer protection functions of the FSS will be separated into the Financial Consumer Protection Division.

Recently, there have been discussions about integrating the capital market investigation division within the FSS with the unfair trading investigation divisions of the Korea Exchange and the Financial Services Commission to create a strong dedicated investigation body for unfair trading, similar to the U.S. Securities and Exchange Commission (SEC).

A financial authority official said, "Given that various interests are intertwined, it is difficult to actively express positions on departmental restructuring to the National Planning and Coordination Committee," adding, "As the government organizational reform task force has now been fully activated, it will be possible to voice concerns at an appropriate time when further reports are made."