South Korea’s National Pension Service (NPS) has stipulated roles of its newly created Legal Support Team by partially revising its fund management enforcement regulations.

The nation’s largest public pension fund has made changes to its enforcement regulations by adding roles of its Legal Support Team for an extra pair of eyes last month, sources familiar with the matter said on May 6. It has specified matters in respect to making a contract for an outsourced investment management and making decisions on the exercise of voting rights.

In regard to the outsourced management, the pension fund requires the head of a division responsible for the outsourced management to sign a contract after being reviewed by the Legal Support Team followed by the compliance officer. Prior to the revision this time, the pension scheme required the head to make the contract after being pre-reviewed by the compliance officer.

With the revision, the pension fund has made clear that the appropriateness of the contract has to be first reviewed by the Legal Support Team prior to the review by the compliance officer.

The pension scheme also added a new rule that requires an agenda regarding the exercise of voting rights to be reviewed in advance by the Legal Support Team before it is submitted to the compliance officer for his review.

According to new enforcement rules, roles of the Legal Support Team include handling litigation affairs, providing legal advices, requesting legal advices, conducting legal due diligence and providing legal support.

The pension scheme completed an organizational restructuring at the end of 2019, when it newly created its Legal Support Team. The Legal Support Team has been created under the umbrella of the NPS’ investment management department to handle legal works, which originally fell under the pension scheme’s compliance division.

The latest moves are consistent with the NPS’ strong need for the independent Legal Support Team to deal with lawsuits regarding investment management and exercising voting rights amid growing assets. The Legal Support Team will report to Managing Director of Risk Management and Legal, one of three managing director positions newly created after the NPS’ organizational changes earlier this year. (By reporter Han Hee-yeon)