FSC: We will conduct a pilot operation of the accountability structure for large financial investment companies and insurance companies

Purpose

The Financial Supervisory Commission has announced a pilot program to encourage large financial investment companies and insurance companies to adopt internal control systems based on the management structure code. This move aims to promote stable integration of new regulations, particularly the Management Structure Law.

Effects on Industry

The introduction of the management structure code will have significant implications for the financial industry, as it requires companies to establish internal control systems that ensure effective risk management and compliance with regulatory requirements. Large financial investment companies and insurance companies will need to re-evaluate their internal controls and implement changes to meet the new standards.

Relevant Stakeholders

The pilot program affects large financial investment companies and insurance companies, which are required to submit a management structure code by July 2, 2025. These companies will need to review and update their internal control systems to ensure compliance with the Management Structure Law. The Financial Supervisory Commission has also emphasized its commitment to ongoing communication with the financial industry to support the successful implementation of new regulations.

Next Steps

To comply with this update, large financial investment companies and insurance companies should:

• Review their internal control systems and make necessary changes to meet the requirements of the Management Structure Law.
• Submit a management structure code by July 2, 2025, if they wish to participate in the pilot program.
• Ensure that their representatives (i.e., directors and senior executives) take responsibility for managing their company’s internal controls.

Any Other Relevant Information

The Financial Supervisory Commission has announced plans to provide consulting services and incentives to encourage companies to adopt internal control systems based on the management structure code. The agency will also consider waiving penalties for regulatory non-compliance during the pilot program period, provided that companies demonstrate a genuine effort to implement effective internal controls.

Additionally, the Financial Supervisory Commission has emphasized its commitment to ongoing communication with the financial industry to support the successful implementation of new regulations and promote internal control strengthening efforts.