Financial Services Commission, Financial Supervisory Service, and financial public institutions will face a decision to relocate outside Seoul by year-end

It is expected that the decision on whether the Financial Services Commission, along with the Financial Supervisory Service and financial public institutional investors, will relocate outside Seoul will not be finalized until after November this year. The Financial Services Commission was initially considered a high-priority candidate for relocation since it can move to Sejong without amending laws, yet it was omitted from the initial list of relocated entities, drawing attention to the reasons behind this. Analysts suggest that due to strong opposition from financial public institutional investors regarding relocation outside Seoul, including the Financial Supervisory Service, the confirmation of whether and when such moves will occur has been postponed until year-end.

According to the government on the 3rd, the Financial Services Commission was not mentioned in the central administrative and public institutional investor relocation plan announced that day. The Ministry of Justice and the Ministry of Gender Equality and Family are scheduled to relocate first in the first half of next year following legislative amendments, while the Prosecution Service (Major Crime Investigation Agency) and the National Police Agency will relocate after constructing new headquarters. Although specific timelines were mentioned for the Ministry of Foreign Affairs, the Ministry of Unification, and the Ministry of National Defense—indicating relocation after 2030 when the Presidential Office moves—the Financial Services Commission revealed no concrete plans.

The Financial Services Commission is not excluded from Sejong relocation under the Happy City Act and is a representative agency that can immediately establish relocation plans without amending laws. Explaining why the Financial Services Commission's relocation plan was omitted, Minister Yoon Ho-jung of the Ministry of the Interior and Safety stated, "Today's announcement does not mean exclusion due to omission," adding, "We will finalize the relocation plan and designated institutional investors in the fourth quarter and issue a public notice."

In response, various interpretations have emerged within the financial sector. While some speculate that the Financial Services Commission may remain in Seoul, more weight is given to the view that it might be part of a package relocation plan tied to the movement of financial public institutional investors. Yoon (Minister) also emphasized the policy: "Rather than relocating all institutional investors uniformly at the same time,"

"we will proceed step-by-step, considering each institutional investor's operational conditions and readiness, to ensure no administrative gaps."

It is also assessed that strong opposition from financial public institutional investors—including the Financial Supervisory Service, Korea Deposit Insurance Corporation, IBK Industrial Bank of Korea, Korea Development Bank, and Export-Import Bank of Korea—has influenced both the method and timing of relocation. Although initial expectations suggested that a public institutional investor relocation plan would be announced alongside the central administrative agency plan, the public institutional investor plan was delayed until after the fourth quarter, reflecting awareness of intense opposition from these institutions.

Possibilities have also been raised for the Financial Services Commission to relocate not to Sejong but to other regions such as Busan or Jeonju. In particular, when Minister Kim Yun-deok of the Ministry of Land, Infrastructure and Transport mentioned the National Pension Service Investment Management Division, which relocated to Jeonju Innovation City, he noted, "After relocation, there were no significant changes initially, but recently, KB Kookmin Bank and several other banks have gathered in the Jeonju area, creating a positive effect. We aim to strengthen and develop such developments." This prompted speculation about potential relocation of the Financial Services Commission or financial public institutional investors to Jeonju. However, Kim (Minister) drew a line after the briefing by telling reporters, "Jeonju was merely cited as an example; no concrete plans for relocating public institutional investors were mentioned."

A financial sector official remarked, "Based solely on today's announcement, it is difficult to clearly determine whether the Financial Services Commission will be relocated or not. Even if relocation occurs, it may be deprioritized among other agencies, and there remains a possibility that Sejong will not be the destination." Another official added, "Given the focus on institutional functions, I believe there is also a chance the financial sector may remain in Seoul, as clustering enhances synergy in this industry."

With the government having publicly announced the fourth quarter as the timeline for final decisions, it is highly likely that the relocation status of the Financial Services Commission and financial public institutional investors will be confirmed around November, taking into account schedules such as national audits. Until then, anxiety and opposition among targeted institutional investors are expected to intensify. The National Federation of Financial Industry Unions (Financial Workers' Union) has announced a general strike starting on the 4th in protest against the push to relocate state-owned banks and financial public institutional investors outside Seoul. Unions from commercial banks and local banks are also expected to join, advocating for an immediate halt to discussions on relocating financial institutions.