South Korea Financial Services Commission and partners launch joint response team to tackle stock market manipulation

South Korea’s Financial Services Commission (FSC), the Financial Supervisory Service (FSS) and the Korea Exchange (KRX) launched a joint response team on stock market manipulation, based at the KRX, to strengthen the initial response function of the KRX Market Surveillance Committee. The new team is intended to remove physical, informational and jurisdictional separation across the three bodies and support faster escalation of suspected unfair trading. Planned measures include introducing artificial intelligence and upgrading the KRX market surveillance system to shift monitoring from account-based detection to more individual-focused analysis, alongside closer cooperation with investigative authorities to speed follow-on criminal investigations. In remarks at the launch, Securities and Futures Commission Chair Kwon Dae-young called for sanctions that exceed illicit profits and for measures to bar manipulators from securities trading and from serving as executives of listed companies, and urged tougher action in cases involving financial company employees alongside stronger internal controls, including codes of conduct to prevent misuse of undisclosed information. The FSC, FSS and KRX also set out further work to ensure implementation of strengthened and more diversified administrative sanctions mechanisms, advance market surveillance capabilities, pursue regulatory reforms under previously announced plans to stamp out unfair trading activities, and embed a “one strike out” principle, including exploring measures to more quickly force poorly performing companies out of stock markets.