Korea Branch Compliance Officer - Securities key terms

A licensed financial investment business in which the firm trades securities or derivatives on its own account, taking principal risk, and may also intermediate customer orders depending on the specific license scope granted.

A licensed business of intermediating another party's purchase or sale of securities or derivatives, or acting as intermediary for issuance, without trading as principal for the firm's own account.

Authorization from the Financial Services Commission required before conducting investment trading, brokerage, collective investment, trust, discretionary investment, or investment advisory business in Korea, graded by business type and product scope.

Permission a foreign financial institution must obtain to open a domestic branch conducting financial investment business, granted by the Financial Services Commission after review of capital, personnel, and business plan.

A customer category under the Capital Markets Act with reduced conduct protections, including certain institutions, listed companies, and individuals meeting asset, income, or trading-experience thresholds who give prescribed confirmation.

The obligation to evaluate a retail customer's investment purpose, financial situation, and experience before recommending a product, and to refrain from recommending products unsuitable for that customer.

A check applied when a retail customer seeks a product the firm did not recommend, confirming the customer's experience and risk profile and warning that the product may be unsuitable.

The requirement to explain key product features and risks, including possible loss of principal and early-termination conditions, so a retail customer can make an informed decision, with documented confirmation of receipt.

A retail customer's right to withdraw an investment subscription within a statutory period after receiving the required product explanation, subject to exceptions for certain instruments and short holding periods.

Prohibited conduct including market manipulation, use of undisclosed material information, and trading without intent to settle, sanctioned under the Capital Markets Act with criminal and administrative penalties.

The Korean regulatory authority that sets financial policy, grants licenses and branch approvals, and issues supervisory orders, with enforcement decisions made through its Securities Futures Commission for capital markets matters.

The supervisory body that examines financial institutions for compliance, receives reports, investigates unfair trading, and refers findings to the FSC for sanction, operating under the FSC's direction.

An administrative sanction warning a financial institution to correct identified deficiencies, typically accompanied by required remediation and possible restrictions on new business for a set period.

A supervisory order requiring an institution or its officers to remedy a specific violation, such as revising internal controls or disciplining staff, enforceable with further sanctions if ignored.

A sanction more severe than an institutional caution, issued for significant violations and considered in licensing decisions and in assessing the institution's compliance record.

The process of identifying customers, verifying identity using reliable documents, and understanding beneficial ownership and transaction purpose before establishing a business relationship or executing certain transactions.

Intensified identification and monitoring applied to higher-risk customers and transactions, such as politically exposed persons, correspondent relationships, and customers from jurisdictions with weak AML regimes.

Determining the natural persons who ultimately own or control a customer, generally through ownership thresholds and control tests, and verifying that information before onboarding.

A confidential report filed with the Korea Financial Intelligence Unit when a transaction or attempted transaction appears linked to money laundering, terrorist financing, or other illegal activity.

The national FIU housed within the Financial Services Commission that receives suspicious transaction reports, analyzes financial intelligence, and may share findings with law enforcement and foreign counterparts.

The ban on informing a customer or third party that a suspicious transaction report has been or will be filed, with limited exceptions, to prevent the customer from evading detection.

A person entrusted with prominent public functions, and their family members and close associates, who require enhanced scrutiny because of elevated corruption and money laundering risk.

The executive responsible for establishing and operating the internal control framework, monitoring compliance, advising staff, and reporting material compliance failures to senior management and the board.

Mandatory written policies and procedures covering segregation of duties, conflict management, recordkeeping, employee conduct, and reporting lines that an institution must adopt and enforce.

The separation of front-office trading, back-office settlement, and risk or compliance functions so that no single person controls the full lifecycle of a transaction, reducing error and fraud risk.

An information barrier preventing the flow of confidential or material non-public information between business units, such as between corporate finance advisory and sales or trading desks.

A domestic office of a foreign financial company that conducts permitted business locally, subject to Korean licensing, capital, reporting, and governance requirements while remaining part of its foreign parent group.

A transaction involving payment, receipt, or transfer between residents and non-residents or in foreign currency, subject to reporting and documentation rules under the Foreign Exchange Transactions Act.

A filing required for certain capital flows between Korea and abroad, such as overseas investment, borrowing, or guarantee arrangements, made to the Bank of Korea or designated foreign exchange bank.

Use of foreign derivatives contracts to manage market, currency, or interest-rate risk on permitted underlying exposures, subject to internal approval, position limits, and reporting requirements.

Selling borrowed securities with the expectation of buying them back later at a lower price, permitted only under statutory conditions including prior borrowing confirmation and reporting obligations.

Selling securities without borrowing them or ensuring they can be borrowed for settlement, which is prohibited because it can distort prices and create settlement failure risk.

Artificial influence on securities prices or trading volume through tactics such as wash trades, matched orders, or dissemination of false information, prohibited as an unfair trade practice.

Trading ahead of a known client or proprietary order using non-public information about that order, profiting from the expected price impact and breaching duties of good faith.

The duty to publicly report material corporate or ownership information, such as large shareholdings or price-sensitive events, within prescribed deadlines through designated electronic systems.

The requirement to hold customer securities and cash separately from the firm's own assets, typically in custody or trust arrangements, so customer property is protected in insolvency.

The combination of segregation, custody arrangements, insurance or reserve requirements, and recordkeeping that safeguards customer assets against loss, misappropriation, or insolvency.

The documented process for receiving, investigating, and responding to customer complaints within statutory timeframes, including escalation, record retention, and reporting to management.

An independent body or process, such as the Financial Supervisory Service's dispute mediation mechanism, that helps resolve investor complaints when internal handling does not satisfy the customer.