The head of the financial regulator on Wednesday urged securities firms to change the way they do business, as well as where they invest, stressing the need for innovation to ensure growth.

Lee Bok-hyun, chief of the Financial Supervisory Service, made the call in a meeting with the heads of 16 securities firms here.

"The tasks aimed at developing our capital market that I have stressed must be discussed in a comprehensive manner, and must not be an issue of energy-consuming disputes between specific ideologies or political factions," he told the meeting.

"Securities firms must become pacemakers in that process, instead of simple brokers

"For us to achieve our goal of developing our capital market, an active role and cooperation of securities firms are important. Securities firms cannot remain simple brokers as they have, and should instead become pacemakers that are trusted by both listed firms and investors," Lee added.

The FSS chief stressed the need for securities firms to increase their investment in unconventional sectors to this end.

"The market asks why our country does not have an innovative firm while cheering for Nvidia that is spearheading the development of artificial intelligence (AI)," he noted.

"To find a Korean Nvidia, we must change the old business practice of securities firms that chased only easy investment opportunities such as real estate project financing," he added. "We need them to act as 'core providers' who supply funds to innovative firms in promising sectors such as AI and big data that will provide future growth engines."

Lee also called for efforts to minimize the possible fallout from short-term real estate PF loans going defunct, asking the heads of securities firms to "preemptively" manage their liquidity risks. (Yonhap)