A task force committee launched by South Korea's Financial Supervisory Service to improve internal controls at financials institutions has submitted its final recommendations to the regulator.
The committee's recommendations include measures to hold CEOs accountable for internal control lapses, as well as tougher internal controls and regulatory supervision over transactions between the controlling shareholder of a financial institution and its affiliates.
It also recommended setting a 1% minimum ratio of compliance officers to the number of employees in a financial company.
Further, the committee cited the need to require financial institutions to formalize methods and procedures for protecting internal whistleblowers.
The six-member committee was tasked with providing a reform proposal to improve internal controls at South Korean financial institutions in the wake of high-profile compliance failures in the sector.
In April, Samsung Securities Co. Ltd. disrupted the stock market by mistakenly issuing shares instead of cash dividends to employee shareholders.
In the same month, NongHyup Bank was slapped with sanctions by the regulator over compliance problems at its New York branch, which resulted in a hefty U.S. fine.