[Alpha Biz= Paul Lee] Seoul, September 25, 2025 – The Financial Supervisory Service (FSS) has imposed administrative measures on Daou Kiwoom Group, citing inadequate management of its internal control system. The group’s flagship financial subsidiary is Kiwoom Securities.



According to financial industry sources, the FSS recently issued five management advisories and ten corrective orders to Daou Kiwoom Financial Group.



Key Findings

Insufficient internal control staff: Compared with other financial groups, Daou Kiwoom had fewer personnel dedicated to compliance and risk management. Many lacked relevant experience, and no structured training programs were in place.



Weak risk management policies: The group failed to properly establish or evaluate risk management policies as mandated under the Financial Conglomerates Act.



Lack of early warning indicators: There was no regular review of group- or affiliate-level early warning indicators, leaving the group without a functioning risk detection and response system.



Inadequate oversight of intra-group transactions: The group lacked clear definitions and processes to manage related-party transactions effectively.



Deficient contingency planning: Emergency response plans classified crises only by capital adequacy ratios, without provisions for liquidity-related scenarios.



Gaps in conflict-of-interest management: Current standards only addressed prevention of conflicts but lacked mechanisms for risk identification, measurement, and control stemming from conflicts of interest.




Next Steps

The FSS urged Daou Kiwoom to overhaul its internal control framework, strengthen risk management, and establish clearer compliance procedures across the group.

This latest action underscores regulators’ increasing scrutiny of financial conglomerates’ governance and risk practices amid systemic stability concerns.

 

 

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]