KOFIA is the sole self-regulatory organization (SRO) of the Korean financial industry. KOFIA approaches self-regulation as a service that should be responsive, flexible and market-friendly, rather than rigid and heavily supervised. To ensure its ability to effectively conduct its role and function as an SRO, KOFIA maintains the Self-Regulation Committee (SRC). The SRC is responsible for KOFIA's overall self-regulation activities, such as making decisions for the establishment and revision of regulations, and applying penalties to members and executives. The committee is headed by the standing SRC Chairman.
- KOFIA's main areas of self-regulation are:
- 1) KOFIA's main areas of self-regulation are Establishing rules and regulations
- 2) reviewing standard agreements and advertisements
- 3) conducting inspections of members
- 4) registering and administering qualification exams for financial professionals
- 5) resolving disputes.
- 1. KOFIA establishes regulations such as the rules on fair business activities among member firms and standards for securities underwriting. In addition, the association also sets various guidelines, such as standard investment product recommendation rules, and Chinese Walls and internal control standards to prevent conflicts of interest.
- 2. For investor protection, KOFIA performs preliminary reviews of the advertising of financial investment products and the business activities of financial investment firms. It also reviews the terms and conditions of financial investment products, and sets standard agreements to support the business activities of financial investment firms.
- 3. KOFIA conducts member inspections and applies penalties for the violation of regulations.
- 4. In order to conduct business activities, such as recommending investment instruments or providing securities consulting and analysis, financial professionals must receive accreditation by passing qualification exams or completing training and registering with the association. KOFIA manages both the registration of professionals and the qualification exams.
- 5. To protect investors, KOFIA runs a dispute settlement center with an in-house attorney to arbitrate disputes.