The government approved the bill on the supervision of financial conglomerates during a cabinet meeting on August 25, which will be submitted to the National Assembly for enactment at the end of August.
The proposed bill on the supervision of financial conglomerates provides a legal ground for the supervision of non-holding financial groups with financial assets of KRW5 trillion or above and contains the following key regulations.
► FINANCIAL GROUPS: Financial groups are defined as those with financial assets in the amount of KRW5 trillion or more, except financial holding companies and state-owned banks.
► INTERNAL RISK MANAGEMENT: An internal group-wide risk management body should be established and operated, led by the group’s top representative company to oversee the group-wide risk management policy, regulatory compliance, prudential management, etc.
► INTERNAL ASSESSMENT: Financial conglomerates should conduct self-assessment on the capital adequacy to maintain their financial soundness while taking into account intra-group transactions and risk concentrations.
► REPORTING & DISCLOSURE REQUIREMENTS: The group’s top representative company is required to report and disclose the group-wide capital adequacy status and risk factors to the FSC, which in turn may ask for a management improvement plan if deemed necessary to prop up capital or reduce risky assets.
* Please refer to the attached PDF for details.