South Korea Financial Services Commission consults on uncapped whistleblower rewards of up to 30% of recovered gains for market manipulation and accounting fraud

South Korea’s Financial Services Commission has proposed amendments to overhaul its whistleblower reward program for unfair trading and accounting fraud, removing fixed payout caps, tying rewards to recovered illicit gains or penalties, and allowing rewards regardless of which government agency first receives the report. The changes would replace current caps of KRW 3 billion for unfair trading and KRW 1 billion for accounting fraud with uncapped rewards of up to 30% of recovered illicit gains or penalties, calibrated to the whistleblower’s contribution. Minimum rewards would be set at KRW 5 million for unfair trading and KRW 3 million for accounting fraud, and discretionary rewards up to those amounts could be paid even where no administrative fine is imposed if the report merits a reward. Eligibility would expand beyond reports filed directly with the FSC, the Financial Supervisory Service, the Korea Exchange, or the Korean Institute of Certified Public Accountants to also include reports first submitted to other authorities such as the National Police Agency or the Anti-Corruption and Civil Rights Commission, provided the information is shared or referred; an inter-agency consultative mechanism is planned to support referrals and information sharing. The proposed amendments to the enforcement decrees under the Financial Investment Services and Capital Markets Act and the External Audit Act, along with related reward rules, are open for public comment from February 26 to April 7, with implementation expected as early as the second quarter of 2026.