As the Act on the Establishment of Financial Supervisory organization was enforced on April 1 1998, the Korean financial supervisory systems fundamentally changed. Formerly, the supervisory authorities and business on banks, securities, insurances and other financial institutions fell under the charge of the Ministry of Finance and Economy and four supervisory bodies; the Office of bank Supervision, the Securities Supervisory Board, the Insurance Supervisory Board and the Non-Bank Deposit Insurance Corporation. Under the new Act, most of the supervisory authorities and business was transferred to the Financial Supervisory Commission and the Financial Supervisory Service. This change has introduced a new regulatory system, which is a fully integrated direct financial supervisory system through government in Korea.
Recently the self-regulation is considered as a more effective device of financial supervision rather than direct governmental supervision. Many legal scholars argue that public regulation should promote private governance through enlightened delegation of regulatory functions. The aim of this article is to begin to answer this question; to understand the constitutional issues raised by self-regulatory association and the ways in which these are and could be addressed.