Securities Enforcement in Pre-1997 South Korea: An Analysis of the Korea Securities and Exchange Commission (KSEC)

Abstract

This paper focuses on the role and delegated authority of the Korea Securities and Exchange

Commission (KSEC) regarding securities regulation and enforcement during the period up to the 1997 Asian financial crisis period. Securities regulation, at this time in Korea, was generally administered under the combined auspices of several government agencies. These agencies included the KSEC, the Securities Supervisory Board (SSB), Ministry of Finance and Economy (MOFE), Korean Securities Depository (KSD) and the Korean Stock Exchange (KSE). The Korean SEC, specifically, acted under the conferred authority of the Securities and Exchange Act (SEA), enacted in 1962. Since Koreas recent democratic emergence in 1945, the government has incorporated facets of American, Japanese, and German law into its own legal system. For this reason, it is of interest to investigate the KSEC, acting under the provisions set forth in the SEA, with some comparison to its American counterpart, the U.S. Securities and Exchange Commission (SEC). To accomplish this, a compilation of primary government sources, related articles, and scholarly texts will be used.

To date, very little work exists regarding the KSEC and its role in the Korean securities market and economy during the pre-1997 period. Because of this omission within the current academic literature, the current topic has been undertaken.