FSS to Tighten Review of Financial Product Ads and Crack Down on Online 'Back-Door' Advertising

The Financial Supervisory Service (FSS) is overhauling its oversight of advertising operations, ranging from prior deliberation to post-monitoring, to eradicate false and exaggerated advertisements by financial investment companies.

The FSS and the Korea Financial Investment Association held an explanatory session today (Sept. 1) on the "Comprehensive Improvement Plan for Advertising Operations of Financial Investment Companies" to announce these measures.

The improvement plan, formulated through discussions with the industry from April to August, encompasses comprehensive upgrades across the entire advertising process—from production and review to post-management by financial investment companies.

To curb the practice of inserting investment-inducing information while providing external information such as market and industry condition analyses, a preliminary review procedure will be established to check whether any information constitutes investment advertising.

A procedure will also be newly introduced where Chief Consumer Officers (CCOs) participate in the ad review decision-making process to preemptively examine the potential for consumer harm.

In addition, monitoring will be intensified on "back-door" advertising utilizing online channel operators.

This follows criticism that management has been inadequate, such as failing to disclose economic interests when advertising financial products through influencers or celebrities.

Checklists for major stages—ranging from contracts and reviews to post-management—will be established for advertisements utilizing online channel operators, and companies' obligations for preliminary review will be specified.


An "Advertising Committee (tentative name)" comprising representatives from the industry, consumer groups, and the press will be newly established within the Korea Financial Investment Association to determine major advertising policies.

Blind spots will be eliminated by adding video advertisements for newly listed ETFs and high-risk financial investment products on companies' own channels such as YouTube, as well as products designated by the Advertising Committee, to the association's review targets.

Furthermore, standards for imposing fines related to advertising violations will be newly established, and detailed judgment factors such as the motive and outcome of the behavior will be explicitly defined.

It will be promptly verified whether published advertisements adequately reflect prior review content, and post-monitoring will be conducted regularly (at least once a year).

The association's reporting center for false and exaggerated advertisements will be revitalized, and internal operating procedures related to the receipt and processing of reports will be established.

Considering preparation periods and other factors, the improvement plan is scheduled to take effect in January next year.

Seo Jae-wan, Assistant Governor of the FSS, stated that the agency will hold companies and their executives and employees strictly accountable for false and exaggerated advertisements that hinder investors' rational judgment, while requesting active cooperation to ensure the improvement plan operates effectively.

(Photo provided by the Financial Supervisory Service, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.