Lee Haeng - gyu , an attorney at Jipyong ( Jipyong ) The Korean financial sector should prepare for the Volcker Rule , which will be implemented in the U . S . in July next year , in order to avoid disadvantages and fines , according to a local attorney . “ Local securities and asset management companies should have more understanding of the rule and its potential impact on them , ” said Lee Haeng - gyu , an attorney at Jipyong , a South Korean law firm , in a recent interview with The Korea Herald . The Volcker Rule , named after former Federal Reserve Chairman Paul Volcker , is aimed at prohibiting banks from making speculative investments with their own funds . Such a reckless investment activity had contributed to the 2008 financial crisis . The rule restricts the U . S . commercial banks from proprietary trading , and limits their ownership of hedge funds and private equity funds . This will affect the Korean financial sector as the rule would also apply to foreign banks in the U . S . Korea ’ s major banks including Shinhan , Woori , KDB , NH , KB , Hana , and IBK have branches in the U . S . The banks would face investment restrictions in the U . S . once the rule goes into effect next year . “ One thing local financial groups missed is that the rule also applies to banks ’ subsidiaries such as securities firms , asset management companies and insurance companies , ” he said . “ As of now many of them have little understanding of this issue and thus haven ’ t started preparing for the rule . ”   For instance , since KB has a branch in New York , its subsidiaries including KB Investment & Securities and KB Asset Management will also face restrictions in the U . S . financial market even though they have no branch offices in the U . S . “ Under the Volcker Rule , if a bank ’ s subsidiaries in Korea break the rule , the bank ’ s U . S . branch office would end up paying a fine or face operation suspension for months , ” he said . In a bid to avoid this trouble , financial groups should be fully prepared for this , he said . “ They should create a main body in response to the rule within the group and create a unified compliance program to share it with all of its subsidiaries , ” Lee said . According to the latest data from the Financial Supervisory Service , Korean banks ’ proprietary trading amounted to 155 trillion won ( $ 140 billion ) in 2011 . Of this , around 5 percent , or 7 . 8 trillion won , could be held accountable under the Volcker Rule . By Shin Ji - hye ( shinjh @ heraldcorp . com ) 미래 엘리트 를 위한 영어 신문 주니어 헤럴드 	 더 많 은 기사 보 러 가 기 → [ 코리아 헤럴드 홈페이지 ] [ 트위터 ] [ 페이스북 ] 	 구독 신청 1588 - 0533 	 <ⓒ KoreaHerald ( www . koreaherald . com ) 무단 전재 및 재 배포 금지 >