South Korea Moves to Block Covert YouTube Ads for Financial Products

South Korean regulators are moving to stop investment firms from using exaggerated promotions and covert YouTube advertising to lure retail investors.

The Financial Supervisory Service and the Korea Financial Investment Association announced a comprehensive overhaul of advertising procedures on the first day of the month. The plan responds to growing competition to promote financial products, including exchange-traded funds, across increasingly diverse YouTube channels.

Under the new procedures, firms will review information intended for external distribution before release. The review will check whether market or industry analysis contains investment advertising that could encourage trading in individual securities.

Consumer protection officers will also take part in advertising reviews, while the investment association will establish an advertising review committee. The regulators said the measures aim to prevent false and exaggerated advertising from harming financial consumers.