FSC promotes fintech and innovation in financial services. In order to encourage convergence and collaboration between finance and information technology, FSC launched the financial regulatory sandbox scheme in April 2019, through which more than one hundred ‘innovative financial services’ have been designated. The regulatory sandbox program allows fintechs and start-ups to test out their ideas without worrying about the regulatory impediments. In addition, Korea’s open banking system was fully launched in December 2019, opening up payment networks to both banks and fintechs through a joint network. By creating a financial data exchange platform, fostering MyData industry and opening up extensive sets of public financial data stored at major public institutions, FSC is also working to create an environment where big data and AI can play a larger role in finance. Policies intended to promote innovation also include providing tailored support to the Korean fintech firms to help them grow and scale up as global unicorns by easing regulations, expanding investment and providing assistance for overseas business expansion.
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May 29, 2018
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May 23, 2018
- Plan to Facilitate the Use of Movable Assets as Collateral
- The FSC outlined its plan to make it easier for SMEs to borrow from banks, using their movable properties as collateral. On May 23, FSC Chairman Choi JongKu visited the Sihwa Industrial Complex, a cluster of SMEs in Gyunggi Province, to see a demonstration of how banks can utilize the Internet of Things (IoT) in tracking and monitoring movable assets offered as security – for example, factory machines. At a meeting with SME entrepreneurs on the site, Chairman Choi briefed on potential benefits of movables as collateral and FSC’s policy schemes to facilitate the use of movable assets as collateral.BENEFITS OF MOVABLE PROPERTIES AS COLLATERAL• Movable assets account for a large portion of SME’s assets so that they could serve as a useful funding source for start-ups and early-stage SMEs, which often lack immovable assets they can provide as collateral.• Movable assets grow along with the development of business, making it possible for start-ups and SMEs to use their movable property as collateral to get funds for growth capital.• A pool of movable assets, offered as a security, is less vulnerable to the volatility of business cycle and less likely to default in the event of an economic downturn.• Movable assets enable SMEs to borrow more loans at lower interest rates, compared to what they could have borrowed on credit.CURRENT PROBLEMS WITH MOVABLES AS COLLATERALDespite such benefits, movable assets have not been actively used as collateral. From a bank’s perspective, movable assets are considered to be a riskier security than immovable assets:• Movable property offered as security involves deprecation of value and difficulty of figuring out who is really entitled to the pledged asset.• They are also exposed to a risk of being damaged or lost, incurring extra expenses for monitoring and managing such collateral.• Markets in which movables offered as collateral can be traded are not sufficient enough to match supply and demand in such transaction,
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May 04, 2018
- Regulatory Reform on Entry Barriers to Financial Services Industry
- The FSC outlined its plan on regulatory reform on entry barriers to financial services business in a bid to promote competition and innovation in the financial sector. The proposal comes at a time when Korea’s financial industry is facing a paradigm shift that demands further innovation in response to the Fourth Industrial Revolution, prompting competition between incumbents and new entrants. It is the first-ever reform plan on entry barriers in 20 years since the current regulatory framework on market entry was established after the Asian financial crisis. Based on the review of the current regulations across the financial sector, the plan aims to overhaul entry requirements tailoring to the needs of each sector, encouraging innovative players to enter the market.Key Changes1. Expanding participation of private-sector expertsThe FSC will expand participation of private-sector experts in the decision-making process related to approval for new entrants. To this end, the FSC will create a 9-person committee of outside experts to evaluate competitive conditions in the financial sector on a regular basis, making it possible to make more objective and fair policy decisions.2. Lowering regulatory barriers to entryThe FSC will lower regulatory barriers to entry and reform entry-related regulations to allow ‘innovative challengers’ to enter the market.► Banking industryThe two internet-only banks, launched in 2017, are being considered to have brought positive changes to the banking sector as they has grown in size1 and promoted competition with incumbent banks. To deepen and broaden such changes, the FSC will consider allowing additional internet-only banks, if demand exists, based on reviews and evaluations of competitive conditions in the banking sector.► Insurance industryThe insurance industry is highly concentrated towards large insurers dealing with all types of life and property insurance. Such large insurers accounted for 99.5% of life insurance and 92% o
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Jan 11, 2018
- Measures to Vitalize Kosdaq Market
- The FSC announced measures for vitalizing the Kosdaq market to support the growth of start-ups and venture businesses. The measures are aimed at overhauling KOSDAQ listing requirements, strengthening Kosdaq’s competitiveness to compete with the KOSPI market, and improving market soundness and investor trust in Kosdaq.Key Measures1. Incentives to attract institutional investors▪ A new fund of KRW 300 billion, named ‘Kosdaq Scale-up Fund’ will be created with investments by the Korea Exchange (KRX), Korea Securities Deposit and relevant securities industry organizations to invest in Kosdaq-listed companies. 1st half of 2018▪ A new market index, named ‘KRX300,’ that incorporates Kospi and Kosdaq-listed companies will be introduced. Feb. 20182. Overhaul of Kosdaq listing requirementsKosdaq listing requirements will be revised in a way that puts more focus on a company’s growth potential. 1st half of 2018▪ Some requirements that hinder listings of start-ups will be abolished. To get listed on Kosdaq under the current rules, a company must generate profits from continuing operations and shall not be in a condition of capital impairment. Such requirements actually act as obstacles to listings of start-ups. It usually takes a considerable period of time for start-ups to generate profits; and some may undergo even capital erosion in the early stage of their business.▪ Listing requirements will be eased to allow Kosdaq listing of a company if the company meets certain threshold requirements in one of three criteria: pre-tax profit, market capitalization and equity capital.▪ To facilitate more listings under the so-called ‘Tesla standard,’1 underwriters with a track record of such listings will be exempted from the rules that oblige them to buy back shares for 90% of their IPO price if retail investors exercise their put-back options within a certain period of time, from one to six months, following the IPO.3. Kosdaq’s autonomy and independenceThe K
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Jul 27, 2017
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Apr 03, 2017
- Korea's 1st Internet-only Bank Open for Service
- ‘K bank’, Korea’s first internet-only bank is officially launched on April 3 for service.At the opening ceremony, Financial Services Commission Chairman Yim Jong-Yong emphasized three significant meanings of the launch of K bank. First, K bank has already brought about a new wave of competition in the banking sector. Second, financial consumers will be able to enjoy numerous benefits including lower banking transaction cost, more convenient banking services, and easier access to loans compared to those provided by commercial banks. Third, more descent quality jobs will be created in the banking, IT, and fintech sectors.K bank will supply mid-interest rate loans worth KRW 500 billion for the next three years. It will start with providing retail banking services and its business scope will be widened to include mortgage loan, payment services, foreign exchange, and fund sales in time.K bank acquired preliminary approval for banking business in November 2015, and final approval in December 2016.*Please refer tothe attachedPDF for details.
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Dec 14, 2016
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Aug 30, 2016
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Aug 02, 2016
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Mar 24, 2016
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Jan 05, 2016
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Nov 29, 2015
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Oct 16, 2015
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Jul 23, 2015
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Jul 02, 2015
- Plan to Strengthen Competitiveness of Korea's Exchange Market
- The FSC outlined its plan to strengthen global competitiveness of Korea’s exchange market and boost vitality in capital markets to fund innovative businesses.BACKGROUNDFree capital flows and technology innovation intensify competition among stock exchanges across the globe. The world’s stock exchanges are actively seeking mergers, acquisitions and strategic alliances to expand their business scope and offer competitive services. A growing number of stock exchanges are turning themselves into a form of holding companies for organizational flexibility in response to changing market environment. Listings of stock exchanges have become increasingly common.The Korea Exchange(KRX) has been isolated from such a global trend, partly due to its status of monopolistic, non-profit public institution. The plan announced today is to reorganize the KRX’s ownership and governance structure to boost competitiveness and vitality of Korean stock exchange market.DETAILED PLAN1. Establish a holding company of the KRXThe FSC will make a revision to the Financial Investment Services and Capital Markets Act(FSCMA) to establish a holding company of the KRX(tentatively named ‘KRX Holding Company’). The KOSPI, KOSDAQ, and derivatives exchanges will be spun-off into subsidiaries of the KRX. Market oversight functions, currently carried out by the Market Oversight Commission under the KRX, will be transferred to a non-profit entity which will act independently from the KRX Holding Company and its subsidiaries. The Korea Securities Depository(KSD) will reorganize its governance structure to minimize a possibility of conflicting interests, given its role as public infrastructure. Clearing business, currently conducted separately by each exchange, will be carried out by a specialized clearing company. The company will also clear OTC derivative products.2. Strengthen competitiveness of KOSDAQThe KOSDAQ will be fostered to strengthen its competitiveness after its spin-off by boosting KOSD
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Jun 18, 2015
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May 11, 2015
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Jan 27, 2015
- Plan to Support Convergence of Finance and Technology
- OVERVIEWThe convergence of IT and fin ancial sectors, or ‘financial technology’(here inafter ‘Fintech’), has emerged as a global trend. The trend also affects transaction pattern an d payment environment for domestic consumers and industries with rapidly growing c ross-border commerce and financial trans action on online or mobile platforms.Investment into the Fintech industry continues to grow around the globe, particularly in the U.S. and the U.K. with high e xpectation about the sector’s growth potential. As global IT leaders such as Alibaba and Apple entered payments market, the Fintech se rvices began to draw attention of the financial sector. Advanced countries including the U. K. actively support the growth of the Fintech indu stry to seize new growth opportunities.Korea has been less active in f ostering the Fintech sector so far due to regulatory barriers and financial security concern. As an IT powerhouse with the advanced financial industry, Korea has great potential for growth in the Fintech sector. In order for Fintech to bring innovative changes to financial services, we need to overhaul current financial regulatory framework mainly focused on offline serv ices. The FSC will also support financing of Fintech businesses and significantly lower barrier s to entry for electronic financial businesses. Financial security, however, is a prerequisite to t he growth of Fitech sector. To this end, the FS C will maintain a strict stance on security and c onsumer protection, while allowing financial service providers more room in their business o perations.1. Regulatory paradigm shift Minimization of ‘ex-ante’ regulationsSecurity review and evaluatio n for means of authentication will be abolish ed to allow financial firms to deliver consumers innovative convenient financial services and introduce more efficient authentication means on their own responsibility. (Revision to regulations related with electronic financial transaction within the second
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Aug 25, 2014
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Apr 03, 2014
