The South Korean financial regulator has decided to extend its 'best practice' guidelines for the supervision of financial conglomerates for another year, with some revisions.

The introduction of something that the regulator calls "the comprehensive supervision on financial conglomerates" is a massive governmental priority. The "comprehensive
supervisory scheme" is intended to capture and manage the group-wide risks of financial conglomerates that conventional sectoral supervision cannot fully address. It will also help the Government prevent any possible contagion of group-wide risks between financial affiliates.

Since the FSC announced its plan to introduce a comprehensive set of rules for financial conglomerates in January 2018, it has published 'best practice' guidelines and seven financial conglomerates have implemented them as part of a one-year pilot test, the first of them beginning in July last year. As the guidelines are due to expire on 1 July this year, the FSC has decided to extend the deadline for with this pilot test to 1 July 2020. The FSC has also changed the guidelines to take account of feedback from financial conglomerates and to co-ordinate them with various laws.

The list of financial conglomerates subject to comprehensive supervisory schemes will remain the same as last year's. They are Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor Finance, DB and Lotte.

The FSC will provide detailed standards (based on the guidelines) to do with comprehensive supervision, a subject on which it is trying to persuade its political masters to enact new legislation. The National Assembly is discussing the framing of two bills.

Family-run business conglomerates are known in Korea as chaebol.