Only 1 in 10 South Korea FSC Staff Traded Local Stocks Despite Kospi Record Run

South Korea’s stock-market boom has continued, but only about one in 10 employees at the Financial Services Commission traded domestic shares, according to data the agency provided to the office of People Power Party lawmaker Kim Sang-hoon. As officials overseeing capital-markets policy, FSC staff are subject to relatively strict controls on personal stock trading.

The FSC reported 96 domestic stock trades in 2025, based on combined quarterly disclosures for the year. The total value of purchases and sales was 7.8 billion won, or about $5.6 million.

FSC employees face significant restrictions when trading Korean stocks. Officials at Grade 4 or above are barred from trading altogether. Those at Grade 5 or below must report their transactions to the FSC every quarter and may trade only through a single account in their own name.

Based on the quarterly reporting cycle, an average of 24 FSC employees disclosed stock trading each quarter in 2025. The commission had 382 employees last year, including 289 at Grade 5 or below. On that basis, roughly 8.3% of eligible staff traded domestic shares in a given quarter.

The rules also cap trading frequency. Employees cannot make more than 20 purchases and sales combined in a quarter. The FSC recorded 945 transactions last year, including both buys and sells. Among Grade 4 officials, only one stock transaction was reported in 2025, worth 900,000 won, or about $650. The agency said it was a disposal following a promotion.

The standards are stringent because the FSC is involved not only in financial policy with broad macroeconomic implications but also in capital-markets oversight. Under FSC rules, the agency’s audit official can directly order a sale if a reported trade appears to violate the Capital Markets Act. Employees can also face disciplinary action for missing disclosures or filing false reports.

Some employees are exempt from the stock-trading disclosure requirement. The exemption applies if they submit a written pledge within one month of opening an account stating they will not trade any financial investment products during their time at the FSC, and they in fact make no trades. Overseas stocks do not have to be reported separately.

Even as enthusiasm for South Korea’s stock market remains strong, differences in sentiment have emerged inside the FSC. With the Kospi recently extending its run to record highs, some younger staff have complained of a sense of deprivation under the strict limits on trading. Although the government has emphasized boosting domestic investment, many FSC employees have turned to overseas shares, which are not subject to the disclosure requirement.

"Domestic stocks are so heavily regulated that it is effectively difficult to invest actively, so many employees are investing in the U.S.," one FSC official said.

Financial Authorities Back Briefing is a column covering behind-the-scenes developments in and around South Korea’s financial regulators, including the Financial Services Commission and the Financial Supervisory Service. It aims to offer a closer look at policy background, market reaction and internal sentiment that may not appear in official statements.

Park Si-on, Hankyung.com reporter ushire908@hankyung.com