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Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), speaks during a meeting with CEOs of asset management firms at the Korea Financial Investment Association in Yeouido, Seoul, on April 10. / Source: Financial Supervisory Service

Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), has expressed concerns over the recent trend among major asset management companies engaging in excessive fee reduction competition to expand their market presence. He noted that this has led to repeated errors in Net Asset Value (NAV) calculations, potentially undermining investor trust. Lee emphasized the need for these firms to reestablish their operational principles and internal regulations.​

Speaking at a meeting with asset management CEOs in Yeouido, Seoul, Lee stated, "I urge asset management companies to focus on their core responsibilities to ensure a sound market order." He also highlighted the importance of fiduciary duty, urging that this principle be embedded in decision-making, evaluation, and compensation systems within organizations.

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Lee pointed out that, despite the Capital Markets Act explicitly imposing a duty of loyalty to investors, there have been frequent instances of formalistic voting rights exercises, pursuit of private interests by major shareholders and executives, and decisions favoring affiliates, all of which compromise the principle of prioritizing investors. In response, the FSS plans to clearly disclose information on exemplary and inadequate cases of voting rights exercises to help the market identify sincere fiduciaries.

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Additionally, Lee called for efforts to enhance expertise and creativity to bolster management capabilities. He stressed the necessity for differentiated strategies unique to 'K-Management' that can compete effectively in the global market.​

Asset management CEOs concurred on the need to advance the capital market and develop the asset management industry, agreeing to maintain ongoing communication and cooperation.

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Lee concluded, "We will actively support the emergence of globally competitive asset management companies by improving fund management regulations and expanding business areas. We will incorporate various industry opinions into future supervisory and inspection tasks and dedicate all our efforts to the advancement of the asset management industry."