South Korea's financial authorities have begun overhauling advertising rules for financial products, as overheated marketing by domestic brokerages and asset managers has recently triggered frequent controversies over false and exaggerated advertisements.
The Financial Supervisory Service (FSS) said Wednesday it has formed a task force jointly with the Korea Financial Investment Association (KOFIA) to overhaul the advertising system of financial investment firms. The Korea Financial Consumers Protection Foundation, a consumer protection organization, is also participating in the task force.
At the first meeting, participants discussed the need to improve the current advertising review system of financial investment firms and the direction of future initiatives. Members shared the view that there is a strong need to supplement the association's rules governing investment advertising standards and procedures, as the emergence of new marketing methods utilizing YouTube and social networking services (SNS) has rapidly changed the advertising environment.
The task force plans to review measures to improve the review process, including expanding the scope of advance screening by the association, and to devise ways to strengthen internal controls related to firms' self-screening. The final improvement plan will be announced in the third quarter of this year after gathering opinions from the industry and financial consumers.
Suh Jae-wan, deputy governor of the FSS in charge of financial investment, said, "We express concern over a series of incidents that are undermining trust in the domestic capital market, as some advertisements with potentially false or exaggerated content have recently emerged." He added, "Along with pushing for system improvements, we plan to strengthen inspections of advertising practices in the industry."
