Financial regulators to hold investigative power

Starting from August, financial officials will be able to directly investigate cases of unfair stock trading.

So far, they have referred such cases to police or the prosecution as they have no investigative authority.

This incoming change reflects investigators’ recognition that complicated financial transactions are better suited for specialists with actual field expertise.

Last week, the National Assembly passed the revised judicial police law, which grants special investigation power to officials of the Financial Services Commission and the Financial Supervisory Service.

When the FSC chairman requests that a financial official be designated as special judicial police position, the chief prosecutor of the corresponding district is to consider and make the final decision.

The selected officials will be able to request a court warrant to seize and search, or make an arrest in suspected cases of financial irregularities, without acting in coordination with the police or prosecution.

The revised law is to take effect Aug. 8 at the latest, as the president is obligated to promulgate a law within 15 days from the parliamentary passage.

The change had been initiated by the Ministry of Justice in 2013, in an aim to gain better control over special law breaches by expanding the range of investigation to field experts.

“Amid the increasing level and frequency of unfair stock trades, we decided it was crucial to grant supervisory officials the right of direct interference,” said an official of the ministry.

“We hope that (the revised law) will help create a safer financial environment for investors.”

The investigation authority is also expected to motivate civil servants to participate more actively in their field of operations.

Civil servants of local governments, too, may be named as special investigators when supervising cases of illicit money lending.

The FSS has repeatedly pledged to eradicate practices of illegal loan sharking and credit collection. The number of loan-related petitions stood at 11,334 as of the end of last year.

Officials of the Ministry of Trade, Industry and Energy and those of the Fair Trade Commission will be able to crack down on fake petroleum sales and illicit pyramid distributorship, respectively.

By Bae Hyun-jung (tellme@heraldcorp.com)