South Korea’s Financial Services Commission announced that the government has approved amendments to the Enforcement Decree under the Financial Investment Services and Capital Markets Act and related subordinate rules to strengthen early detection and sanctions for unfair trading and disclosure violations in capital markets. The revised Enforcement Decree takes effect on 28 October 2025, while the subordinate regulations apply from 22 October 2025. The changes authorise the Korea Exchange (KRX) Market Surveillance Committee, acting in its surveillance capacity, to process investors’ personal data in pseudonymised form (resident registration numbers), allowing surveillance to shift from an account-based model to an individual-centred approach and reducing the number of surveillance targets by about 39%. Penalty surcharge ranges for insider dealing, price manipulation and other unfair trading rise to 100%–200% of illicit gains (from 50%–200%), and for market-disrupting conduct to 100%–150% (from 50%–150%); serious illegal short selling linked to unfair trading or concealment is in principle subject to a surcharge of 100% of the violating short-sale order amount. For disclosure violations, surcharge rates increase to 40%–100% of the maximum FSCMA penalty (from 20%–100%), with the same range applying to company executives such as largest shareholders, and aggravated criteria add unfair trading by financial company employees in the course of duty and false disclosure of material information by listed companies, allowing surcharges to be increased by up to 30% and extending certain trading and listed-company executive bans by up to 66%. KRX is set to start operating the individual-centred surveillance system from 28 October 2025 following test runs with 57 securities firms.
South Korea Financial Services Commission 2025-10-22
South Korea Financial Services Commission announces approved capital market rule changes enabling individual-based KRX surveillance and tougher penalty surcharges
South Korea's Financial Services Commission approved amendments to the Enforcement Decree under the Financial Investment Services and Capital Markets Act to enhance detection and sanctions for unfair trading and disclosure violations. The Korea Exchange Market Surveillance Committee is authorised to use pseudonymised personal data, shifting surveillance to an individual-centred approach and reducing targets by 39%. Penalty surcharges for insider dealing and other violations have increased, with the new system operational from 28 October 2025.