The Financial Services Commission announced on January 14 that the responsibilities mapping system will be piloted for large-sized specialized credit finance businesses with total assets of KRW5 trillion or more and savings banks with total assets of KRW700 billion or more. With the amended Act on Corporate Governance of Financial Companies (“the Act” hereinafter) taking effect from July 3, 2024, banks and financial holding companies (from Jan. 2, 2025), as well as large-sized financial investment companies and insurance companies (from Jul. 2, 2025) have already become subject to the submission of their own responsibilities maps to the Financial Supervisory Service. Pursuant to the Act, large-sized specialized credit finance business with total assets of KRW5 trillion or more and savings banks with total assets of KRW700 billion or more will need to submit responsibilities maps to the FSS by July 2, 2026. Smaller-sized financial investment businesses and insurance companies with total assets below KRW5 trillion will also be subject to the July 2 submission due date.

From the time responsibilities maps are submitted to the FSS, the chief executives and other executive officers of financial companies become subject to the duty of internal control oversight and risk management in their lines of work, and may become subject to sanctions if found to be in violation of the internal control oversight duty.

In this regard, there have not been sufficient incentives made available previously to encourage financial companies to adopt responsibilities maps in advance prior to the legally mandated submission due date, especially due to concerns over potential sanctions for violation.

As such, the FSC and the FSS will pilot the responsibilities mapping system for large-sized specialized credit finance businesses and savings banks prior to the actual enforcement date (July 2, 2026). Those wishing to participate in the pilot program will need to submit their own responsibilities maps to the FSS until April 10, 2026.

There will be various incentives provided to the financial companies participating in the pilot program. First, the FSS will offer consultation on their submitted responsibilities maps. Second, during the pilot period, mishandling of internal control oversight duties will not be held accountable in accordance with the Act. Third, internal identification of violation and self-corrective measures taken against the rule-breaking of own employees will be taken into account when granting a mitigation or exemption for sanctions.

With this pilot program in place, large-sized specialized credit finance businesses and savings banks will be able to adopt responsibilities maps for internal control management without being weighed down by potential sanctions for violation. In this regard, the FSC and the FSS will make continuous efforts to ensure a seamless implementation of the new requirement, while maintaining close communication with financial companies to bolster internal control in the financial industry.

* Please refer to the attached PDF for details.