Key Takeaways
- • The Financial Supervisory Service (FSS) established a standard internal control framework for private equity fund (PEF) managers, covering executives' and employees' obligations, including reporting of stock trading accounts.
- • The standard was announced on the 9th at a "PEF Management Company Internal Control Workshop" held with the PEF Management Company Council at the FSS headquarters in Yeouido, Seoul.
- • The framework rests on three pillars: establishment of an internal control organization, compliance when performing work, and self-inspection of compliance with the standard.
- • The FSS announced on the 11th that it will check the performance status of internal control responsibilities at PEF managers, following repeated violations.
- • The FSS attributed repeated violations partly to insufficient CEO attention to internal control at registered PEF managers.
Summary
The Financial Supervisory Service has established a standard internal control framework for private equity fund managers, according to reporting by Maeil Business Newspaper (mk.co.kr). The "Standards for Internal Control of Private Equity Business Executives (GP) exclusively for institutions" were announced on the 9th at a PEF Management Company Internal Control Workshop held with the PEF Management Company Council at the FSS headquarters in Yeouido, Seoul. The standard requires executives and employees to report their stock trading accounts, a measure intended to strengthen internal controls at PEF managers.
The framework is built on three pillars: establishing an internal control organization, ensuring compliance when performing work, and conducting self-inspections of compliance with the standard. The regulator's move comes as large private equity funds grow in influence and as controversy continues over illegal and unfair conduct by some managers, including MBK Partners.
On the 11th, the FSS said it will examine the performance of internal control responsibilities across a broader set of PEF managers. The FSS pointed to a lack of CEO interest in internal control as a background factor in repeated violations. The FSS has also instructed financial firms to promote a robust compliance culture by strengthening internal controls to prevent recurrence.
Source material for this story was limited; the figures and quotes above are drawn from the available supplemental and publisher excerpts, and the full original article could not be retrieved.
The framework is built on three pillars: establishing an internal control organization, ensuring compliance when performing work, and conducting self-inspections of compliance with the standard. The regulator's move comes as large private equity funds grow in influence and as controversy continues over illegal and unfair conduct by some managers, including MBK Partners.
On the 11th, the FSS said it will examine the performance of internal control responsibilities across a broader set of PEF managers. The FSS pointed to a lack of CEO interest in internal control as a background factor in repeated violations. The FSS has also instructed financial firms to promote a robust compliance culture by strengthening internal controls to prevent recurrence.
Source material for this story was limited; the figures and quotes above are drawn from the available supplemental and publisher excerpts, and the full original article could not be retrieved.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.