South Korea's Financial Services Commission (FSC) has announced that its Capital Markets fraud investigation unit has been reorganized into two units, a move by the FSC to establish a system for effectively investigating securities fraud.

The FSC established its Capital Markets Investigation unit in September 2013 and has since worked with the prosecutor's Office, the Financial Supervisory Authority, the Korea Exchange and others to combat such fraudulent activities.

"Despite the concerted efforts of various agencies, it remains difficult for a single unit to effectively combat such illegal activities, as the size of capital markets has increased significantly, the number of market participants and social networking services has increased, and securities fraud has become more sophisticated," the FSC said.

The FSC has launched an organisational restructuring to strengthen a unit dedicated to investigating potential fraud in the capital markets. As a result, the Capital Market Investigation Division will be divided into two divisions: the Capital Market Investigation Coordination Division and the Capital Market Investigation Division.

The newly established Capital Markets Investigation Coordination Unit will be responsible for planning, overall management, coordination of investigations of unfair trading activities in the capital markets, classification of cases, and coordination of external relations related to the investigation of fraud in the capital markets. The Capital Market Investigation Office will be responsible for investigating and taking measures against unfair trading activities, false disclosures, and omissions of material facts in the capital market.