The head of the financial regulator urged asset management firms Thursday to more actively protect the rights of investors by inducing changes in the companies they invest in and encouraging them to enhance their value.

Lee Bok-hyun, chief of the Financial Supervisory Service (FSS), also called on the asset managers to clean up their own acts, citing a recent series of embezzlement and misappropriation cases committed by their employees.

“As a key agent of investment that attracts the funds of investors and supplies those funds to the market, asset management companies have the role and responsibility of not only expanding the investors’ assets but also improving the very makeup of firms they invest in by exercising their voting rights,” he said in a meeting in Seoul with the heads of 23 asset management firms.

To this end, the FSS chief called on the asset managers to actively implement the stewardship code, revised earlier in the year to require asset managers to make sure “the companies they invest in
establish and implement long-term strategies to improve their corporate value.”

“Asset managers must faithfully fulfill their duties as trustees of people’s wealth. Therefore, (we) ask you to do your utmost to find the best investment opportunities and also help enhance the value of companies you invest in by actively exercising shareholder rights and oversight,” Lee told the meeting.

He also called on the heads of asset management firms to work to prevent financial accidents caused by their own employees, saying, “The financial authorities will do their best to establish market order by quickly weeding out unqualified asset management firms and sternly dealing with any illegal practices.”

Source : Yonhap News Agency