The head of the financial regulator on Thursday called on local securities firms to actively support local companies and economy, stressing the need for them to change their behavior and business practices.

Kim Byoung-hwan, chief of the Financial Services Commission (FSC), also vowed “zero tolerance” for any illegal or unfair business practice in a meeting with the chief executive officers of 10 brokerage and securities firms in the country.

“The government is actively working to strengthen the competitiveness of our companies and capital market, and active support from the securities industry is very important since the goal cannot be achieved by the government alone,” Kim was quoted as saying.

The FSC chief said the government recognizes the efforts by securities firms to help develop the capital market, but there are areas where they fell short of expectations.

“(Kim) said now was the time when securities companies need to think about their role and behavior as financial firms that play an important r
ole for the development of our capital market and vibrant economy,” the FSC said in a press release.

Kim reiterated the need for the country to shift from a “debt-oriented” economy to a “capital-oriented” one.

“The entire financial industry and related institutions will need to work toward that end, but efforts by securities firms to invigorate equity-financing are especially important,” he told the meeting, according to the FSC.

Kim said the government will review the law on brokerage firms for possible revisions, noting many securities firms have been criticized for focusing on mortgage loans while providing little or no investment to small businesses or venture firms.

He also reiterated the importance of protecting the rights of investors, noting there had been many cases such as incomplete sales and illegal stock short selling that eroded investors’ trust in securities firms, and said the government will “sternly deal with any illegal or unfair practices under the principle of ‘zero tolerance,'” the F
SC said.

Source: Yonhap News Agency