Board of Audit and Inspection launches audit into financial authorities, examining stock fees and investor protection

South Korea's Board of Audit and Inspection (BAI) has initiated an audit of financial authorities, including the Financial Services Commission and the Financial Supervisory Service. The audit will scrutinize investor protection measures and the fairness of stock trading fees, particularly in light of the surging popularity of high-risk financial products like stocks and funds.

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Ordinary financial investors, due to information asymmetry and a lack of specialized knowledge, may bear excessive transaction costs when trading stocks, and their retirement fund management returns may be low, or they may invest without knowing the risks inherent in financial products.

The BAI stated that ordinary investors often bear excessive transaction costs due to information asymmetry and a lack of specialized knowledge. The audit will assess how effectively financial authorities are safeguarding investors, focusing on preventative measures against mis-selling and the establishment of protective mechanisms for vulnerable investors. The investigation will also look into instances where financial regulators have been slow to process inspection results or imposed lenient penalties on financial firms.

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We will review the appropriateness of the cost of stock trading and the profit calculation system.

Furthermore, the audit will review the dispute resolution system for investors who have suffered losses. It will also examine the appropriateness of costs associated with stock trading and profit calculation systems. This includes scrutinizing the fairness of interest rates for margin trading and the transparency of fee differences across brokerages and exchanges. The BAI plans to conduct the audit over 20 days with a team of nine auditors.

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We will review the necessity of easing regulations on investment in risky assets to improve the operating returns of retirement pensions.