Press Releases - Financial Services Commission

Press Releases

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Jan 18, 2024

Strengthened Penalties on Unfair Trading Activities in Capital Markets Take Effect from January 19

The Financial Services Commission announced that the revised Financial Investment Services and Capital Markets Act (FSCMA) and its subordinate statutes will go into effect on January 19. The revision deals with (a) introducing a penalty surcharge system on unfair trading activities, (b) legislating a method for calculating the amount of unfairly gained profits, and (c) providing a leniency to those reporting violations committed by oneself or others. The revised rules were prepared through close consultation and discussion with the Ministry of Justice, the Supreme Prosecutors Office, the Financial Supervisory Service and the Korea Exchange. The authorities expect that the changed rules will help to more effectively detect and prevent unfair trading activities and more strictly apply sanctions on illegitimate activities. First, the revision introduces a penalty surcharge system on unfair trading activities and enables authorities to impose a penalty surcharge of up to twice the amount of unfairly gained profits (maximum KRW4 billion when there is no illicit profit made or it is impossible to calculate an amount). Previously, only criminal penalties were available as a method of sanctioning unfair trading activities, which usually took long time to reach a decision by the court with the strict application of burden of proof. With the introduction of penalty surcharge, a speedier and more effective sanctioning will now be possible on unfair trading activities. In terms of the procedure for imposing a penalty surcharge, in principle, the FSC is able to impose a penalty surcharge after receiving an outcome of investigation from the prosecution service. However, when the matter has been consulted with the prosecution service or if it has been more than a year since the case was first reported to the prosecution service, the FSC is allowed to impose a penalty surcharge even before receiving an investigation outcome from the prosecution service. Second, the revision establi
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Jan 18, 2024

Rules Change Approved to Officially Introduce BCBS Large Exposure Limit on Banks from February 1

The Financial Services Commission held its first scheduled meeting of the year on January 18 and approved the previously proposed rules change to the supervisory regulations on banks and financial holding companies. The regulatory change officially establishes the large exposure limit recommended by the Basel Committee on Banking Supervision (BCBS) to bring domestic financial rules more aligned with global standards. In this regard, the changed rules are similar to the banks and financial holding companies credit extension limit being observed under the existing legal framework in that it requires banks and financial holding companies to keep large exposures to a counterparty (or a group of affiliated counterparties) within 25 percent of their core capital (20 percent for D-SIBs). However, the under the revised rules, the scope of counterparties has been broadened to include entities in both controlling relationship and economically dependent relationship. The revised rules also incorporate a wider scope of credit exposures since they include both credit extensions such as loans and financial products such as stocks and bonds as well as third-party guarantees. Thus, the revised rules will allow a more comprehensive and integrated way of managing counterparty credit risks. The revised rules will go into effect from February 1. Authorities expect that this will help to improve the management of large-scale concentration risks in the banking sector. The financial authorities will continue to closely monitor risks in the banking sector and seek changes in rules needed to boost regulatory consistency with global standards. * Please refer to the attached PDF for details.
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Jan 17, 2024

Government Holds Policy Forum on Enhancing the Role of Finance to Expand Co-prosperity and Ladder of Opportunity

The government held the fourth round of policy forum on the topic of strengthening the role of finance to foster co-prosperity and expand the ladder of opportunity, presided over by President Yoon Suk Yeol on January 17. At the forum, the Financial Services Commission presented the governments plans to enhance the role of finance to help expand the ladder of opportunity in the following three ways(a) strengthening the role of capital markets to facilitate asset accumulation of the public, (b) reducing the burden of high interest rates for vulnerable groups, and (c) assisting vulnerable groups to recover and regain footing from financial difficulties and debt problems. I. Strengthening the role of capital markets First, the government will strengthen tax incentives to support asset accumulation of the public. In this regard, the previously planned capital gains tax (for introduction in 2025) on financial investment income will be repealed. For individual savings accounts (ISAs), the maximum savings limit (ISA allowance) will be raised from KRW20 million a year for a total of KRW100 million previously to KRW40 million a year for a total of KRW200 million. The tax deductible limits for dividend and interest income will be raised from KRW2 million and KRW4 million (for agro-fishery types) previously to KRW5 million and KRW10 million (for agro-fishery types). A new type of ISA will be created for investments exclusively in domestic stocks and funds. Investors subject to aggregate taxation on financial income will also be eligible to sign up for this type of ISA for which a separate tax rate of 14 percent will be applied without any deductible. Second, the government will seek regulatory reforms intended to create a more investor-friendly environment in capital markets. To this end, authorities will seek to revise the Commercial Act to enhance protection for the rights and interests of small shareholders through strengthening the accountability of company executives and m
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Jan 15, 2024

1st Fintech Open Networking Day Scheduled for January 26

The Financial Services Commission announced that the first Fintech Open Networking Day is scheduled to be held for fintech businesses, financial companies and investors on January 26. This event will provide a venue for networking among fintech businesses, financial companies and investment companies to promote closer cooperation and collaboration in digital finance and provide more funding opportunities. From now on, the Fintech Open Networking Day will be held on a biannual basis. Unlike the previous fintech demo day or IR (investor relations) events where fintech companies pitched their ideas and business models to financial companies and investors, in the Fintech Open Networking Day, financial companies and investors will present potential areas of collaboration and investment strategies to fintech startups. There will be seven financial companies attending the first Fintech Open Networking Day in January. They will share their annual plans for operating fintech labs and the areas of potential fintech collaboration in their drive to digital transformation. In addition, there will be four fintech investment fund management companies joining the event to present their investment aims and fund management strategies. Each financial company or fund manager will operate an on-site consultation booth to provide follow-up consultation to fintech businesses. Industrial Bank of Korea and Korea Credit Guarantee Fund, with plans to provide fintech-specific policy finance products in 2024, will also join on-site booths to make available relevant information. Moreover, a mentoring program with fintech leaders will be available for sharing their experience and know-how of handling challenges with early-stage fintech startups. Application to join the Fintech Open Networking Day can be found on the official website of Fintech Center Korea (https://www.fintech.or.kr/). * Please refer to the attached PDF for details.
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Jan 15, 2024

Financial Industry Signs MOU to Provide Prompt Credit Recovery Support for Borrowers in Payment Delinquency

Chairman Kim Joo-hyun of the Financial Services Commission attended an MOU (memorandum of understanding) signing event held for financial industry groups and credit information companies with an aim to provide prompt credit recovery support for borrowers in payment delinquency on January 15. This agreement signing is a follow-up to the meeting held at the National Assembly on January 11 in which the financial sector, the ruling party and the government discussed the need to promptly make available credit recovery support for those in need. To this end, the financial industry associations agreed to suspend the practice of sharing and making use of borrowers past delinquent payment information when their late payments have been fully paid. At the event, FSC Chairman Kim said that it is necessary to give a second chance to those who fell victims to the unavoidable and abnormal environmental circumstances, such as the effects of COVID-19 and continuation of high interest rates and high prices. There are currently some 2.9 million individuals experiencing difficulties in having normal access to financial services due to their delinquent payment history. In this regard, Chairman Kim expressed his appreciation for the financial sector for quickly proceeding with the agreement and urged financial companies to promptly make such help available. The financial industry groups and credit information companies said that they will quickly make relevant adjustments to their computer system to halt the sharing and making use of borrowers past delinquent payment information as early as from March 2024. * Please refer to the attached PDF for details.
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Jan 11, 2024

FSC Chairman Attends Meeting on Credit Recovery Support

Chairman Kim Joo-hyun of the Financial Services Commission attended a meeting held at the National Assembly on January 11 on the issue of providing credit recovery support for individuals and small business owners. At the meeting, participants talked about the difficult circumstances experienced by those who have acquired late payment history on loans due to COVID-19, high interest rates and high inflation, even when after they are finished with making payments on their loans due to a prolonged stigma attached to credit delinquency for a certain period of time. In this regard, considering the severity of economic situation, FSC Chairman Kim asked the financial sector to seek active ways to provide credit recovery support as it was previously made available during the similarly difficult times in January 2000, May 2001 and August 2021. More specifically, Chairman Kim asked the financial sector to make assistance available for the borrowers who accrued late payments of maximum KRW20 million between September 2021 and January 2024 and have completely paid up their late payments in full, as an extension of the same credit recovery support measure made available for them since August 2021. In addition, Chairman Kim said that the individual debt restructuring program offered by Credit Counseling Recovery Service needs to be bolstered to take into account the fact that about forty percent of delinquent borrowers are those who are behind their mobile phone bills. In this regard, Chairman Kim added that an integrated and more comprehensive debt restructuring program needs to be made available, joined by telecommunication service providers. The financial sector agreed to finalize a plan on credit recovery support by early next week. The authorities expect that some 2.9 million individuals will benefit from the credit recovery support as their credit delinquency history will be erased from the record. * Please refer to the attached PDF for details.
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Jan 10, 2024

Authorities Hold Meeting to Discuss Ways to Continue to Stably Manage Household Debt Growth in 2024

The Financial Services Commission held a meeting with relevant authorities, organizations and industry groups on January 10 to go over the current household debt situation and discuss strategies to effectively control household debt growth in 2024. At the meeting, participants shared the same view that the current trend of household debt growth appears to be on a stable course as the year-on-year growth of KRW10.1 trillion at the end of 2023 is much smaller than the average annual growth of KRW83.2 trillion in the previous eight years. In this regard, the household debt to GDP ratio is also expected to have fallen in 2023 for the second straight year. While sharing positive assessments about the current household debt situation, participants also agreed on the need to stably control household debt growth with a more longer term perspective. To ensure that household debt growth continues to stay on a stable level, Secretary General Kwon Dae-young of the Financial Services Commission said that the following three principled strategies need to be observed in a consistent manner. First, the government will consistently work on reducing the countrys household debt to GDP ratio every year to ensure a stable management of growth in quantitative terms with an aim to bring it down within the level of annual economic growth. Second, the authorities will encourage the practice of borrowing within ones own debt repayment capability, while working to bring about regulatory improvements in debt service ratio (DSR). Third, the authorities will take steps needed to ensure the availability of microfinance support measures for vulnerable groups. Secretary General Kwon added that this will require close communication and cooperation between the authorities and financial institutions. * Please refer to the attached PDF for details.
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Jan 10, 2024

Household Loans, December 2023

The outstanding balance of household loans across all financial sectors went up KRW0.2 trillion in December 2023 (preliminary), showing a significant slowdown in the pace of growth from a month ago (up KRW2.6 trillion). In 2023, household loans increased KRW10.1 trillion across all financial sectors, up 0.6 percent from the end of last year. * Monthly change (in trillion KRW, y-o-y): +5.2 (Jul 2023), +6.1 (Aug), +2.4 (Sep), +6.2 (Oct), +2.6 (Nov), +0.2 (DecP) Annual change (in trillion KRW, y-o-y): +56.2 (2019), +112.3 (2020), +107.5 (2021), -8.8 (2022), +10.1 (2023P) (By Type) In December 2023, mortgage loans rose KRW5.1 trillion, slowing down from a rise of KRW5.6 trillion in the previous month. Other types of loans dropped KRW4.9 trillion, showing an accelerated pace of decline from a month ago (down KRW3.0 trillion). (By Sector) Household loans grew at a slower rate in the banking sector (up KRW5.4 trillion up KRW3.2 trillion), while declining at a faster rate in the nonbanking sector (down KRW2.8 trillion down KRW3.0 trillion). Mortgage loans from banks grew at a slightly slower rate from the previous month (up KRW5.7 trillion up KRW5.2 trillion) due to a suspension in the provision of a certain type of policy mortgage loan. Other types of loans fell KRW2.0 trillion due to the effects of year-end bonuses. Household loans from nonbanks fell KRW3.0 trillion in December 2023. Mutual finance businesses (down KRW1.6 trillion), savings banks (down KRW0.9 trillion), specialized credit finance businesses (down KRW0.5 trillion) and insurance companies (down KRW0.01 trillion) all saw declines in household loans. (Assessment) Household loans turned upward in 2023 from a drop in the previous year due to a recovery in the real estate market. Mostly, the growth was caused by policy mortgage loans extended to non-speculative homebuyers. Compared to previous years, the authorities evaluate that the pace of growth (up KRW10.1 trillion) is kept at a stable level currently. Nonet
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Jan 08, 2024

Online One-stop Loan Transfer Service Available for Home Mortgage Loans from January 9

The Financial Services Commission announced that the online one-stop loan transfer service set up in May last year to help borrowers get lower interest rates on credit loans will start to be available for home-backed mortgage loans and jeonse loans from January 9 and January 31, respectively. Borrowers will be able to use this service for mortgage loans secured with an apartment worth KRW1 billion or less and for guaranteed jeonse loans. From January 9, borrowers will be able to check eligibility and make a switch from seven online loan comparison platforms and the mobile apps of thirty-four individual financial companies. In the future, more financial institutions are expected to join the system. To ensure protection for financial consumers, the authorities have required a verification of algorithms for loan comparison platform service providers. The authorities also plan to require loan comparison platform service providers to disclose their commission rates to ensure that consumers are not burdened with extra fees. To make sure that the availability of loan transfer service for housing loans will not push up the size of household debt, the authorities have put in place certain restrictions. For instance, borrowers cannot switch to get more in total loan amounts and that the maximum amount available for the switched loan should be up to the remaining balance of loan. The maturity can be set equally as the initial loan period but cannot be extended to a longer period. To prevent abrupt money moves from taking place between financial institutions, the authorities will require them to establish maximum levels of handling housing loan transfers processed through this system, while closely monitoring the system usage in close coordination with the Korea Financial Telecommunications Clearings Institute and financial industry associations. * Please refer to the attached PDF for details.
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Jan 05, 2024

Authorities Plan to Introduce a Total Platform for Microfinance Assistance Available from June 2024

Chairman Kim Joo-hyun of the Financial Services Commission visited an inclusive finance support center operated by Korea Inclusive Finance Agency in Seoul on January 5 and held talks on the governments plan for microfinance support for this year with officials from relevant organizations participating. In his opening, Chairman Kim first talked about some of the efforts made by the government to boost assistance for vulnerable groups in the previous year. The size of policy funds supplied for microfinance assistance last year was the largest ever, amounting to some KRW10.7 trillion. Moreover, a total of KRW95.85 billion in small-sum living expense lending assistance was provided to those who lacked any income sources or fell behind debt payments. Along this line, authorities updated various assistance programs to strengthen financial inclusion and made available a comprehensive consulting and counseling program linking supports for employment, social welfare, debt restructuring and so on. For this years microfinance policy plan, Chairman Kim said that the government will focus on boosting convenience for end-users and assisting those in need to regain footing on their own. To this end, the government plans to launch an online total platform for microfinance assistance for operation from the first half of this year. The platform will help to guide users to find the most suitable microfinance products according to each users personal needs and situation and offer one-stop application service as well as the consulting and counseling support program. Developing this platform will mark the first step towards making the provision of microfinance assistance more efficient and user-oriented, since it will provide more personalized and comprehensive search results for comparison, while allowing users to search, compare, choose and apply all from a single platform. In order to tackle challenges facing vulnerable groups, Chairman Kim said that it is important to ensure the avai
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Jan 03, 2024

FSC Plans to Work on Measures to Improve the Competitiveness of Publicly Offered Funds

Vice Chairman Kim Soyoung of the Financial Services Commission presided over a meeting with officials from related authorities and an industry groupto discuss plans to improve the competitiveness of the publicly offered funds market on January 3. In his opening remarks, Vice Chairman Kim said that the government has never been more serious about making fundamental changes to our capital markets, and that this plan is also a part of the policy drive intended to resolve the issue of Korea discount, the persistent undervaluation of Korean companies in stock markets. In this regard, the proposed plan will focus on nine specific ways to bring about improvements regarding institutions, products and infrastructure, with aims to cut transaction costs, strengthen product marketability and boost transaction convenience. First, the proposed plan intends to bring about improvements from institutions by strengthening the credibility and accountability of fund managers, sellers and related businesses including the fund accounting and administration companies and various ratings companies. Currently, the sales remuneration structure for fund sellers is designed in a way that all fund sellers are paid with fund assets in a uniform way. To boost accountability and competition between fund sellers, the authorities will introduce a more reasonable seller remuneration system (fund class) under which fund sellers will be paid directly from investors with the possibility of having different fee rates for different sellers within the statutory limit of one percent. For these types (or classes) of funds, the seller fee remuneration system can be linked to the performance of funds to boost responsibility of fund sellers. Along this line, the proposed plan will bolster asset managers accountability by requiring them to more regularly conduct evaluations on alternative investment assets and to more accurately advertise fees for exchange-traded funds (ETFs). With increases in demand for more f
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Dec 28, 2023

Authorities Hold Meeting to Discuss Corporate Debt Workout of Taeyoung Engineering and Construction

The Financial Services Commission held a meeting with the related authorities and financial institution on December 28 to discuss measures to help business normalization of Taeyoung Engineering Construction and minimize the impact as the company filed for a debt workout under the Corporate Restructuring Promotion Act today. Since the turmoil in the real estate project financing (PF) market last year, the government has been closely monitoring market developments and financial conditions of major construction companies. Taeyoung EC has been faced with financial difficulties as it was struggling with refinancing its real estate PF loans and asset-backed securities amid global tightening of monetary policies. In particular, unlike other construction companies, it was found that Taeyoung EC had a high proportion of self-performed projects as well as high levels of debt-to-equity ratio and PF loan guarantees. These factors show particular characteristics of Taeyoung EC, which remain different from other companies situations. In this regard, the authorities at the meeting agreed that there is no possibility of a systemic risk across the construction sector or financial market as long as there is no spread of anxiety. Taeyoung EC has already demonstrated self-rescue efforts by coming up with KRW1 trillion on its own and submitted further plans to sell its subsidiaries and other assets. The company is currently working on its debt workout plan with Korea Development Bank, its main creditor bank, which will work on business normalization of Taeyoung EC based on the companys strong commitment to self-rescue efforts. As of the end of September 2023, there were sixty real estate PF development sites under management of Taeyoung EC. Based on the type and the progress of each project, various arrangements and solutions will be employed to either continue to carry out projects or seek restructuring or sale. At the meeting, Chairman Kim Joo-hyun of the Financial Services Commission
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Dec 28, 2023

Application Period for Personal Debt Purchase Program Extended for One Year Until the End of 2024

The Financial Services Commission announced that the period for operating the personal debt purchase program intended to protect vulnerable debtors will be extended for one more year until the end of 2024. The personal debt purchase program was first launched in June 2020 in the wake of the coronavirus pandemic with aims to help to avert individual debtors from facing the risk of excessive debt collection practices and to help them regain their footing. As of December 29, 2023, the program has provided assistance in 112,377 cases, which amounts to some KRW737.8 billion in non-collateralized delinquent personal debt. After considering the necessity of extending the availability of support for vulnerable borrowers amid increases in interest rates, the FSC along with the Korea Asset Management Corporation (KAMCO) and all financial industry associations decided to extend the program operation for one more year until the end of 2024. The authorities will continue to work with the financial sectors to help reduce the burden of vulnerable debtors and seek measures to facilitate their recovery and resumption back to normal economic activities. * Please refer to the attached PDF for details.
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Dec 27, 2023

Stressed Debt Service Ratio Rules to Take Effect in 2024

The Financial Services Commission announced that the stressed debt service ratio (DSR) rules will take effect in 2024 on all types of loans that have variable, mixed or periodically changing interest rate structures. The stressed DSR system imposes a certain level of additional stress rate when calculating the borrowers DSR as it takes into account the possibility of the borrower facing heavier repayment burdens in the future with increases in interest rates. The additional stress rate will be determined based on the comparison of interest rates between the five-year peak level and the present level (as of May and November of every year). However, to buffer against the possibility of overestimating or underestimating the risk associated with interest rate changes in times or both high and low interest rates, the additional stress rate will be decided between a minimum of 1.5 percent and a maximum of 3.0 percent. For loans with variable interest rates, an additional stress rate of the five-year peak rate minus the present rate will be applied. For loans with mixed interest rate structuresthose with a fixed interest rate for a certain period of time first and changed into a variable interest rate structure thereafterthe longer the period of fixed interest rate structure, the lower the level of additional stress rates. For instance, for 30-year loans, if the period of fixed interest rate is set between five to nine years, the additional stress rate will be applied at a 60 percent level. For the fixed rate terms of nine to fifteen years and fifteen to twenty-one years, the additional stress rate will be applied at a 40 percent level and a 20 percent level, respectively. For loans with periodically changing interest rate structures, additional stress rates will be applied at eased levels. For 30-year loans, if the period of interest rate change is five to nine years, the additional stress rate will be applied at a 30 percent level. For those with nine-to-fifteen-years an
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Dec 26, 2023

SFC Imposes Penalty Surcharges on Global Investment Banks for Illegal Short Selling Activities

The Securities and Futures Commission, a sub-commission within the Financial Services Commission responsible for the oversight of the securities and futures markets, decided to impose KRW26.52 billion in penalty surcharges on two global investment banks (Company A and Company B) and an affiliated domestic securities firm (Company C) for violating short selling regulations under the Financial Investment Services and Capital Markets Act (FSCMA). The SFC also decided to report violations committed by Company A and Company B to the prosecutors office for investigation. The authorities found that the naked short selling activities committed by these financial companies over an extended period (about four-to-nine-months) constitute a grave offense harming capital markets trading order and investor confidence. Thus, the SFC reached a decision to bring the severest level of penalty surcharges against them since the penalty surcharge system for short selling violations became available in April 2021. Company A based in Hong Kong was found to have placed short sale orders amounting to about KRW40 billion on 101 stock items between September 2021 and May 2022 without first borrowing the shares. The SFC found the naked short sale orders placed by Company A to be intentional. An affiliated domestic securities firm (Company C) of Company A also violated short selling regulations by continuously handling consigned orders. Company B based in Hong King was found to have placed short sale orders of about KRW16 billion on nine stock items between August 2021and December 2021. Although the company was well aware that its ordering process and computer system were not consistent with domestic regulations, Company B continuously and repeatedly placed short sale orders first and then borrowed shares afterwards for a prolonged period of time. The authorities found these breach of rules to be intentional. The financial authorities will continue to strictly deal with unfair trading activities
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Dec 22, 2023

Authorities Plan to Set Up Taskforce to Effectively and Flexibly Respond to ELS Market Anxiety

The Financial Services Commission and the Financial Supervisory Service held a meeting on December 22 to check current situation regarding the sales of Hong Kong index-linked equity-linked securities (ELS) by domestic financial institutions. They have recently been a source of anxiety for investors following sharp declines in Hong Kongs Hang Seng China Enterprises Index (HSCEI). At the meeting, the authorities reviewed the status of sales of ELS products linked to HSCEI and ways to effectively handle potential loss to investors. As of November 2023, the total volume of Hong Kong index-linked ELS products sold to investors amounted to KRW19.3 trillion. Among them, about 82.1 percent or KRW15.9 trillion were sold by banks. Most of the ELS products considered to be problematic are the ones issued after early 2021 when the HSCEI was at its peak. These ELS products are set to mature in early 2024 with the potential of inflicting loss to investors. To prepare for this possibility of investor loss, the financial authorities have instructed the sellers of these Hong Kong index-linked ELS products to come up with response strategies. In addition, from the end of November 2023, the FSS has been conducting inspections on the twelve major banks and securities firms to closely scrutinize their marketing process, sales incentives and so on. Moreover, to be able to effectively and flexibly deal with various situations arising from potential investor losses, the authorities will set up and operate a taskforce run by the FSS to handle consumer complaints and mediation of conflicts and to carry out inspections and take needed actions on the sellers. At the meeting, FSC Secretary General Lee Se-Hoon said that the authorities will closely communicate with the market to ensure the availability of relevant information needed in the market, so that there is no increase in market anxiety concerning the Hong Kong index-linked ELS products. Secretary General Lee also added that based on the
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Dec 20, 2023

Accounts Receivable Factoring Service from KODIT to be Available for Middle Market Enterprises

The Financial Services Commission announced that a revision bill of the Korea Credit Guarantee Fund Act was passed by the National Assembly during a plenary session held on December 20. Under the revised law, middle market enterprises (as designated by the Special Act on the Promotion of Growth and the Strengthening of Competitiveness of Middle-standing Enterprises) will be able to receive financing support through Korea Credit Guarantee Fund (KODIT)s accounts receivable factoring service. KODITs accounts receivable factoring (or invoice financing) service first became available in February 2021 for small- and medium-sized enterprises, and it helped to improve cash flows of SMEs without adding an extra burden on their debt ratios. With the revised law, middle market enterprises will also be able to have access to KODITs accounts receivable factoring service from 2024. However, during the early stage, the scope of middle market enterprises eligible for this service will be limited to those with annual revenue of less than KRW300 billion, which will be further specified under a revision of the enforcement decree. This threshold level may be raised in the future depending on the economic condition and support capacity. For 2024, the government plans to make available a total of KRW150 billion in accounts receivable factoring service, an increase of KRW60 billion from this year. Even with the inclusion of middle market enterprises in 2024, KODIT plans to supply at least KRW90 billion to SMEs to ensure the availability of steady support for them. * Please refer to the attached PDF for details.
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Dec 20, 2023

New Legislative Bill on Personal Credit Management and Debtor Protection Passed by National Assembly

The Financial Services Commission announced that a new bill on personal credit management and individual debtor protection was passed by the National Assembly during a plenary session held on December 20. The new legislation establishes a legal ground for individual financial institutions to provide debt restructuring on their own to individual debtors, alongside the public sector-driven debt restructuring process currently made available through the Credit Counseling and Recovery Service (CCRS) and the court system. This legislation, therefore, helps to promote individual lending institutions in the private sector to offer debt restructuring or settlement to debtors. The new law aims to protect the rights and interests of debtors and helps to minimize social costs by assisting debtors to regain their footing and preventing larger defaults. Under the new legislation, first, individual debtors who borrowed less than KRW30 million in loans and accrued overdue payments will be able to directly request for debt restructuring or settlement from their creditor financial institutions. Once requested, the creditor financial institution should halt debt collection and notify its decision about the availability of debt restructuring to the debtor within ten business days. Second, the new law will upgrade the ways in which interest payments are calculated on overdue loans to help to ease the burden and psychological pressure placed on debtors who have borrowed less than KRW50 million in loans. Third, the new law restricts excessive debt collection practices to ensure that debtors are able to continue to live free from fears of debt collection. The total number of debt collection attempts will be limited to seven times over seven days. Individuals can make a request not to be contacted at certain hours or via certain contact methods. The new law on personal credit management and debtor protection is expected to take effect nine months after promulgation (possibly in October 202
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Dec 20, 2023

Financial Authorities of Korea and Japan Hold 7th Shuttle Meeting in Seoul on December 19-20

The Financial Services Commission and the Financial Supervisory Service held the 7th shuttle meeting with Japans Financial Services Agency in Seoul on December 19-20. The shuttle meeting between the financial authorities of the two countries was held for the first time in seven years since the last meeting held in Tokyo in June 2016. Key details of the meeting are included in the joint press release shown below. 1. The Seventh Korea-Japan Shuttle Meeting was held by three financial supervisory and regulatory authorities (the Financial Services Commission (FSC), the Financial Supervisory Service (FSS) of the Republic of Korea and the Financial Services Agency (FSA) of Japan; hereinafter referred to as the three authorities) in Seoul, the Republic of Korea, on December 19 and 20. The Shuttle Meeting was held for the first time in seven years since the last meeting in Tokyo in June 2016. 2. The first Shuttle Meeting was held in Seoul in 2012 with the aim of strengthening cooperation between Korean and Japanese financial authorities. At the Shuttle Meeting this year, a meeting between Mr. KIM Joo-hyun, Chairman of the FSC of the Republic of Korea, and Mr. KURITA Teruhisa, Commissioner of the FSA of Japan, was held on December 19, and a meeting between Mr. LEE Bokhyun, Governor of the FSS of the Republic of Korea, and Mr. KURITA was held on December 20. 3. At the Shuttle Meeting, the three authorities held a frank and constructive discussion on the global economic and financial situation as well as their financial supervisory and regulatory priorities. 4. Mr. Kim welcomed todays shuttle meeting, which took place following the October meeting with Mr. Kurita in Tokyo. Recognizing the Japanese governments policy to promote digital transformation and startup business, as well as a move that encourages Korean startups and fintech companies to closely watch the Japanese market, Mr. Kim indicated that the FSC, in tandem with its relevant institutions, plans to hold IR events,
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Dec 19, 2023

Provision of Policy Finance Support Worth KRW212 Trillion Planned for 2024

The Financial Services Commission held a meeting with the related government ministries and policy financial institutions on December 19 and decided on a plan for providing policy finance support for 2024. The consultative body on policy finance support was launched last year with aims to more effectively supply policy funds in line with the industrial strategies and policies prioritized by government ministries.Through the operation of the consultative body, the government was able to successfully implement and quickly provide KRW91 trillion in policy funding support to the five key strategic sectors in 2023 as planned. In 2024, the authorities decided to increase the total amount of financing support made available through policy financial institutions to KRW212 trillion (up 3.4 percent from 2023). For policy funds earmarked for the five major strategic sectorsfor nurturing super gap growth for domestic industries, supporting business reorganization and industrial restructuring, promoting domestic startups and venture businesses to grow into global unicorns and so onthe authorities decided to supply 11.5 percent more than the amount provided this year, or KRW102 trillion-plus. More specifically, for the global super gap sectors, which include the semiconductor, secondary battery and display industries, a total of KRW17.6 trillion in policy finance support will be provided in 2024, up 12.8 percent from the previous year. For cultivating domestic startups and venture businesses into global unicorns, a total of KRW12.6 trillion in policy finance support will be supplied, up 39.5 percent from 2023. To help businesses better cope with the continuation of high interest rates, high inflation and high USD-to-KRW exchange rates, a total of KRW28.7 trillion in policy finance support will be provided in 2024, an increase of 8.9 percent from this year. At the meeting, FSC Vice Chairman Kim Soyoung said that the provision of policy finance support in 2024 will be implemented w
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