SEOUL, July 3 (Korea Bizwire) – The Financial Services Commission (FSC) is set to pass a reform bill which will require financial companies to record conversations with vulnerable elderly customers when selling derivative-linked securities, in a bid to address concerns over unscrupulous sales tactics.
The FSC’s announcement about the new financial reforms came on Sunday amid the growing issuance of derivative-linked securities in a country which has in recent years identified those aged over 70 as being particularly at risk, as they are thought to be most vulnerable when buying financial products or making investments.
“Derivative-linked securities have become extremely popular, with some investors, including the elderly, investing large sums of money, sometimes their entire life savings. There need to be protective measures in place safety for investors at risk,” the FSC said.
According to the FSC, those over 70 accounted for the highest sum of spending on derivative-linked securities on average among all age groups, with investment of around 110 million won per person.
As the newly proposed reform by the FSC is set to take effect from next year, the requirement to record conversations during the sales process is expected to reduce financial risks for elderly investors in South Korea.