"If they call up a private banker from Jeju or Busan for an interview that lasts 10 minutes to an hour, the travel costs and the resulting gap in work end up falling on employees, don't they?"
An official at the Mirae Asset Securities labor union raised strong objections in a phone call over the Financial Supervisory Service's inspection into unsound sales practices at designated hub branches. Following an initial round in June, the FSS is again examining this month whether violations occurred during the SpaceX public offering — which drew controversy over "zero-share allocations" — including whether clients were encouraged to register as professional investors. The union argues that the FSS's prolonged and intensive inspection is infringing on the rights of employees.
Viewed dispassionately, inspection methods fall within the FSS's own authority as the body responsible for supervising and examining financial institutions. If violations are suspected, it has the right to request documents and investigate, and the financial firms under review have a duty to cooperate. Even so, the unusual step of a union at an institution under inspection pushing back this forcefully reflects concerns about a repeat of what the FSS's critics call a "dust-shaking" inspection — a fishing expedition that turns over everything in search of wrongdoing.
First is the appearance that the FSS demanded excessive personal information in an area where the scope of interpretation is ambiguous. Under financial investment business rules, brokerages may not solicit applications for designation as an individual professional investor. The FSS's position is that because the private bankers under inspection claim the professional investor registrations were made at clients' request, that claim is hard to substantiate without submitting materials that would show it. Submitting records of ordinary phone calls or KakaoTalk chats with clients, by this view, is difficult to characterize as an excessive demand for personal information.
But an executive in the financial investment industry pushed back, saying: "The standard for interpretation is not clear on whether simply explaining the professional investor system because a client asked about it also counts as solicitation, so it effectively comes down to the FSS's judgment." The executive asked whether solicitation could realistically be proven from call records alone.
Some see the union's action as something that was bound to happen. There is even sharp criticism that because the FSS decides how interviews and document submissions are conducted, the process can be misused as a way to ratchet up pressure on the institutions it examines. That is why calling in employees outside the hub branches under review for separate interviews is seen as unusual. At a public briefing on the 17th, the FSS said once again that it would improve its inspection practices. After years of revising the inspection system, it is time to examine why similar controversies keep recurring.
