[Alpha Biz= Kim Jisun] Only about one in ten employees at South Korea’s Financial Services Commission (FSC) traded domestic stocks last year, as strict conflict-of-interest regulations continue to limit participation—even amid a record market rally.

According to data obtained by Rep. Kim Sang-hoon of the ruling People Power Party, FSC staff conducted a total of 96 domestic stock transactions in 2025, with combined buy-and-sell volume reaching KRW 7.8 billion.

Under the Capital Markets Act and related rules, FSC employees face tight restrictions on domestic stock trading. Officials at grade 4 or higher are completely barred from trading Korean equities, while those at grade 5 or below may trade only if they report transactions quarterly. Trades must also be conducted through a single account registered under the employee’s name.

Based on quarterly reporting data, an average of about 24 employees traded domestic stocks each quarter. Out of 382 FSC staff, 289 are grade 5 or below—meaning only about 8.3% of eligible employees participated in domestic stock trading.

Total trading activity reached 945 transactions last year, with a cap of 20 trades per quarter per employee. Violations of the rules can result in forced liquidation orders or disciplinary action for non-reporting or false disclosures.

Employees may opt out of reporting obligations altogether by pledging not to trade financial investment products during their tenure. Notably, overseas stock investments are not subject to the same reporting requirements.

As the KOSPI continues to hit record highs, some younger FSC employees have expressed frustration over the restrictions. Despite the government’s push to encourage domestic investment, many FSC staff are increasingly turning to U.S. and other overseas equities, which are not subject to the same regulatory constraints.

An FSC official said, “Given the heavy restrictions on domestic stocks, a significant number of employees are investing in U.S. equities instead.”

 

 

 

[ⓒ 알파경제. 무단전재-재배포 금지]