Supported by the economic growth and capital inflows recently being experienced by the Asian countries with Korea, China and Japan leading the pack, forming and attracting a financial hub in the Asian region, the Northeastern Asian region, in particular, has become the subject of topic. Keeping up with this trend, the nation has also announced the plan for forming a financial hub and is pushing for it as well as the relevant legislation. Making changes to the regulating method should be a pre-condition to promoting a financial hub for the Northeastern Asia. This is because free investment system and the diversity of products are necessary for the attraction and transaction of foreign capitals. This means examining legal and institutional tasks to form a financial hub. First, this is the issue of the ‘Act on the Preparation and Development of Financial Center’. Selecting a financial hub pursuant to the Act is based on the assumption that the application is made by each local autonomous body. However, this could incur waste of unnecessary financial resources. This is because a financial hub should satisfy certain requirements for locations, the extent of the development of infrastructures and the relationship with the relevant industries when such factors are taken into account. In the meanwhile, how a financial hub committee and a support center should be organized is a matter for consideration. A financial hub should be formed on the premise that the regulation should be eased and transparency enhanced. Especially, there is a concern that rapid relaxing the regulation might undermine the stability of the financial market. Thus, loosening the regulation needs controlling the tempo depending on the capabilities of professional and ordinary investors in financial market. Advancing the financial supervision is also necessary. The supervising method so far used is characterized as the arbitrariness of the watchdog authorities, deteriorating the market resilience. Thus, it is necessary to enhance the market efficiency by setting up a self-supervising system while founding it on principle-based supervision. Also necessary are the expansion in financial firms’field of activities and a variety of financial products. But it can be said this problem has been partly solved by the Act on the Capital Market and Financial Investment Business which has been newly enacted and waiting for enforcement. Allowing the use of a hedge fund also becomes an issue. As its impact on the financial market is great, there is a lot of controversy over whether it will be allowed. It is deemed desirable to permit it as a means of protecting investors and markets under an appropriate regulation, even while keeping alive the right function of invigorating the flow of capitals. Looking back at the history, the regulation and the market have had an inseparable relationship. In the absence of regulations, the market was thrown into confusion and with excessive regulations in place, the market efficiency dropped. It is hoped pushing for the formation of a financial hub for the Northeast Asia paves a way to invigorate the effort to pursue the harmonization of regulations with the market.