Press Releases - Financial Services Commission

Press Releases

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Sep 11, 2023

FSC Vice Chairman Holds Investor Relations in Hong Kong to Promote Investment in Korean Capital Markets

Vice Chairman Kim So-young of the Financial Services Commission visited Hong Kong on September 8 on the final leg of his weeklong trip to Indonesia, Vietnam and Hong Kong intended to boost financial cooperation with the region. IR event with Global Investors Vice Chairman Kim held an IR event for global investors to explain key policy updates regarding recent improvements made to Koreas capital and foreign exchange markets. Since the beginning of this year, the government has introduced a series of regulatory reform measures intended to increase regulatory consistency with global standards and improve investment environment for global investors. The government has been making continuous efforts to communicate with various stakeholders to inform its reform measures. As a part of this effort, an IR event was held in Hong Kong to attract more capital inflows into Korean capital markets and facilitate companies to raise funds. About 40 participants from 20 global asset management companies and insurance companies attended the event showing a high level of interest. Vice Chairman Kim gave a comprehensive presentation on the governments key market reform efforts, including the abolishment of foreign investors registration requirement, improvements made to companies dividend payout procedure, adoption of an ex-ante disclosure rule for insider transactions and so on. Vice Chairman Kim then underscored the governments strong willingness to make changes to capital markets and upgrade investment environment to ensure a virtuous cycle from investment to growth to reinvestment. Global investors in attendance had favorable views about the event, saying that it was such a great opportunity to meet with the regulators in person and exchange opinions on important policies. Meeting with Deputy Chief Executive of Hong Kong Monetary Authority Vice Chairman Kim held a meeting with Deputy Chief Executive Arthur Yuen of the Hong Kong Monetary Authority to exchange views on recent global m
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Sep 08, 2023

FSC Vice Chairman Visits Vietnam to Strengthen Cooperation on Digital Finance

Vice Chairman Kim So-young of the Financial Services Commission visited Vietnam on September 6-7 on a second leg of his weeklong trip to Southeast Asia intended to promote export of Korean financial services infrastructure and boost cooperation with the region. Vietnam is one of the countries hosting a large number of Korean financial companies with significant interest in fintech and digital finance. As of the end of March 2023, there were some 58 local branches operated by 44 Korean financial companies. Meeting with Korean financial companies operating in Vietnam On September 6, Vice Chairman Kim So-young held a meeting with a group of Korean financial companies doing business in Vietnam and held talks on Vietnams financial industry and market trends, their business operations and challenging aspects. Total 15 companies attended the meeting in which they raised issues such as regulatory hurdles related to delay in licensing, lack of clarity in regulatory guidelines, etc. In this regard, Vice Chairman Kim said that the Korean government plans to boost support for financial companies business expansion and operations overseas and make efforts to strengthen cooperation with the local regulatory authority to help alleviate their operational difficulties. Fintech demo day in Ho Chi Minh City The FSC and the Fintech Center Korea hosted a fintech demo day in Ho Chi Minh City on September 6, which was the first fintech demonstration event held overseas since the easing of the pandemic. Total 11 fintech companies from both countries showcased innovative fintech services to an audience of about 100 participants. Vice Chairman Kim So-young delivered congratulatory remarks at the event, highlighting the importance of Vietnam as a crucial export destination and production base for many Korean companies and expressing his expectations for building a mutually beneficial and cooperative relationship and network between the fintech firms and financial institutions of both countrie
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Sep 06, 2023

FSC Vice Chairman Visits Indonesia to Bolster Export Financing Support and Strengthen Financial Cooperation

Vice Chairman Kim So-young of the Financial Services Commission visited Indonesia on September 4-5 on his weeklong trip to Southeast Asian countries to boost financial cooperation and promote export of Korean financial infrastructure models. Korea-Indonesia Financial Cooperation Forum On September 4, Vice Chairman Kim attended the Korea-Indonesia Financial Cooperation Forum hosted by Indonesias Financial Services Authority (OJK) and Koreas Council on International Financial Cooperation (CIFC). The forum dealt with issues on sustainable finance in both countries and ways to strengthen financial cooperation. In his congratulatory remarks, Vice Chairman Kim highlighted how both countries have been able to maintain close cooperative relationship with each other, and said that the Korean government will continue to make effort to support Korean financial companies to pursue mutually beneficial and sustainable business activities in Indonesia while sharing the experience and know-hows on financial innovation and digital transformation. Meeting with Deputy Chairman of Indonesian Financial Services Authority (OJK) In a meeting with Deputy Chairman Mirza Adityaswara of Indonesias Financial Services Authority, Vice Chairman Kim shared concerns about some of the local regulatory hurdles experienced by Korean financial companies operating their business in Indonesia. Vice Chairman Kim said that Korean financial companies are equipped with the experience and know-hows in successfully supporting the growth of the real economy and leading digital transformation of financial services. Therefore, Vice Chairman Kim said that, together with Indonesias high growth potential, they can achieve a significant synergy in Indonesian markets. Export Finance Support Meeting with Hyundai Motor Vice Chairman Kim visited Hyundai Motors factory in Indonesia and held talks on the recently announced export finance support for the suppliers and subcontractors in the auto industry. At the meeting, Vic
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Sep 05, 2023

Rules Change Proposed to Officially Introduce BCBS Large Exposure Limit on Banks

The Financial Services Commission proposed revisions to a set of rules on banks and financial holding companies on September 5, introducing the large exposure limit recommended by the Basel Committee on Banking Supervision (BCBS) to help improve regulatory consistency with global standards and boost management over large-scale concentration risks. In 2014, the BCBS set out the supervisory framework for measuring and controlling large exposures and recommended its members to begin implementing the large exposure limit by January 2019. In Korea, the large exposure limit has been implemented through an administrative guidance since March 2019. However, a formal process to make this rule into an official regulatory framework has been postponed due to the coronavirus situation. BCBSs large exposure limit is currently adopted by sixteen countries including the U.S and the EU, and within this year, a regulatory consistency assessment program is expected to take place in Korea. In this regard, the revision proposal for the rules on banks and financial holding companies being announced for public comment today is similar to the banks and financial holding companies credit extension limit being observed under the current law 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 revision proposal adopts a broader term for counterparties as it includes entities in both controlling relationship and economically dependent relationship. The revision proposal also incorporates a wider scope of credit exposures as it includes 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 authorities will grant a two-year grace period to the Korea D
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Aug 31, 2023

Enhanced Transparency and Investor Protection Measures on CFD Transactions to Take Effect from September

The Financial Services Commission announced that a set of improvements to the rules on contract for difference (CFD) trading will take effect from September 1. The improvement measures include (a) provision of more transparent investment information to investors, (b) resolving the issue of regulatory arbitrage vis--vis credit loans and (c) strengthening protection for retail investors. First, from September 1, information about the actual investor type (individual, institution or foreign investor) will be displayed and provided on Korea Exchange (KRX)s trade data system (data.krx.co.kr) for CFD transactions. In addition, as in the case with credit loan balance, from September 1, CFD balances will be disclosed to enable the use of these data as a reference for investment. The overall CFD balance can be found on a website (freesis.kofia.or.kr) operated by the Korea Financial Investment Association. Meanwhile, information about CFD balances by item will be ready for viewing on HTS (home trading system) and MTS (mobile trading system) within September as each securities firm needs to finish up preparing relevant data network system. Second, there are stronger investor protection measures taking effect from September 1. As a new over-the-counter (OTC) derivatives investment requirement, for CFD transactions, retail investors need to be verified of having sufficient investment experience by securities firms. Retail investors need to show that they have maintained a monthly average balance of KRW300 million or more for one year or more within the past five years for transactions of equity stocks, derivatives products or highly complex derivatives-linked securities. In addition, retail investors applying to attain the status of a qualified professional investor will need to go through an in-person verification process (including video call) conducted by a securities firm. Third, CFD traders will need to deposit at least 40 percent of the amount of CFD trading as a requireme
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Aug 30, 2023

2023 Korea Fintech Week Begins

Koreas annual global fintech expo, 2023 Korea Fintech Week, will be held for three days from August 30 to September 1 with domestic fintech firms, financial companies, relevant organizations and foreign governments and institutions joining at Dongdaemun Design Plaza (DDP) in Seoul. The three-day (Aug 30 to Sep 1) fintech expo this year is the largest ever in its scale featuring a variety of exhibition halls as well as seminars and educational and experiential programs under the theme of the new wave of fintech. During the opening ceremony, Vice Chairman Kim So-young of the Financial Services Commission delivered welcoming remarks in which he emphasized the need to revitalize the fintech industry to propel innovation and continuous growth of the fintech industry. In this regard, Vice Chairman Kim laid out three key policy directions to support the fintech industry. First, the government will strengthen support for fintech firms business expansion to overseas markets. Second, the government will facilitate more cooperation between financial companies and fintech businesses. Third, the government will reform fintech regulations to make them more reasonable to ensure that fintech businesses are able to take advantage of new technologies and drive innovation. At the same time, Vice Chairman Kim said that the government will directly engage and communicate with fintech enterprises and make sure that a variety of assistance is available on the ground so that our fintech industry can continue to grow amid digital transformation. Following the opening ceremony, a memorandum of understanding (MOU) signing event was held between financial companies, big tech platform businesses and Korea Growth Investment Corporation for establishing a second batch of fintech innovation fund in the amount of KRW500 billion for four years (2024-2027). After the opening ceremony featuring speeches by notable dignitaries, a policy briefing session is scheduled to be held during which visitors can
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Aug 29, 2023

FSC Announces Current Status in Effort to Soft-land Loan Forbearance Measures for SMEs and Small Merchants

The Financial Services Commission announced current situation regarding the effort to soft-land the loan forbearance measures put in place for SMEs and small merchants that have been hit by COVID-19 on August 29. The maturity extension and payment deferment programs introduced in April 2020 in the wake of the COVID-19 pandemic have been extended for six months each time until now, and the loan forbearance programs are currently operating under the 5th extension plan announced in September 2022. Key details of the support measures under the 5th extension plan are as follows. First, borrowers on the maturity extension program can continue to get support in accordance with their current loan maturity structure (for six months or one year) until September 2025 without worrying about whether they will still be eligible for support. Second, borrowers on the payment deferment program can get support until September 2023, and they will draw up their debt payment plans in consultation with lending institutions. In accordance with their debt service plans, these borrowers will be able to spread out making payments for both principal and interests for up to 60 months (five years) until September 2028. A maximum one year of grace period can be granted on the amount of deferred interest payments. The number of borrowers as well as the total amount of outstanding loan balance subject to the maturity extension and payment deferment programs has been declining steadily. At the end of September 2022, there were about 430,000 borrowers with some KRW100 trillion in loan balance on the programs, but the numbers declined to 390,000 borrowers with KRW85 trillion by the end of March 2023 and KRW350,000 borrowers with KRW76 trillion by the end of June 2023. Compared to September 2022, by June 2023, there were about 80,000 less borrowers using the programs with a drop of about KRW24 trillion in the amount of loan balance, showing a drop of 20 percent and 24 percent, respectively. About KRW1
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Aug 21, 2023

2023 Korea Fintech Week to Kick Off August 30

The annual global fintech expo, 2023 Korea Fintech Week, will kick off on August 30 with domestic fintech firms, financial companies, relevant organizations and foreign governments and institutions joining at Dongdaemun Design Plaza (DDP) in Seoul. The three-day (Aug 30 to Sep 1) fintech expo will be the largest ever in its scale featuring a variety of exhibition halls as well as seminars and educational and experiential programs under the theme of the new wave of fintech. After an opening ceremony featuring speeches by notable dignitaries, a policy briefing session is scheduled to be held during which visitors can learn about the Korean governments fintech policies as well as relevant fintech support programs made available by regional government bodies. Twelve different themed seminars are scheduled throughout the three-day expo period, inviting fintech experts and related organizations to have in-depth discussions about some of the most trending issues in fintech, such as payments, security, data usage, collaboration with a financial company and entering overseas markets. In particular, a joint fintech session with major international organizations (WB, EBRD, UNIDO and IFC) will provide an invaluable opportunity for visitors to get insights into global fintech trends and future development of the industry as the seminar will deal with the topics such as fintech and the future finance and linking sustainable development and fintech. There will be 82 exhibition booths organized into the fintech hall, financial hall, cooperating organizations hall and global exhibitor hall, showcasing innovative technologies and products from 107 businesses and organizations, which is the largest scale ever in terms of the number of on-site exhibition booths. A variety of helpful programs and events including global fintech: spoken by foreigners, fintech connecting day, fintech idea contest and fintech company IR pitching day as well as fintech job mentoring and career consulting wi
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Aug 17, 2023

FSC Vice Chairman Holds Media Briefing on the Progress and Achievements of Capital Market Reform Agendas

Vice Chairman Kim So-young of the Financial Services Commission held a media briefing on the progress and achievements of the governments capital market reform agendas on August 17. The following is a summary of Vice Chairman Kims remarks. I. Key Achievements This administration has been actively pursuing capital market reforms as a key part of the governments policy priority. In particular, the government has taken bold steps to resolve the problem of the so-called Korea discount by enhancing investor protections, removing outdated regulations and overhauling rules to foster innovation in the market. Despite the presence of difficult economic and financial conditions, there have been some favorable outcomes achieved thank to active cooperation between relevant institutions and industries. Restoring Investor Trust First, the government has prioritized in implementing a set of measures aimed at restoring investors trust in the capital market. In this regard, the governments policy focused on (a) strengthening the rights and interests of general shareholders, (b) bolstering response against fraudulent and unfair trading activities, and (c) ensuring order and fairness in the market. With regard to strengthening protections for general shareholders, we have put in place three layers of protection mechanisms at the end of last year to ensure that the rights and interests of general shareholders are thoroughly guaranteed in an IPO of a split-off subsidiary. Since the introduction of the measures, we have seen changes in corporate practices as more companies are drawing up shareholder protection plans on their own and communicating with shareholders to seek their consent. To protect general shareholders from unforeseen damages caused by insider transactions involving large shareholders or executive officers, we introduced a rule requiring corporate insiders to disclose their share trading plans before the expected trading date. To ensure that general shareholders can also
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Aug 16, 2023

FSC Announces Private-Public Joint Export Support Measures Worth KRW23 Trillion

The Financial Services Commission held a meeting with major banks, policy financial institutions along with the relevant government ministries on August 16 and announced a set of measures aimed at boosting support for the export industry. The announcement is a follow-up to the presidential export strategy meeting held in February, and the measures reflect opinions raised during FSCs meeting with the export sectors held earlier in May. Key details of the measures include (a) proving strategic support for domestic export businesses to more effectively prepare them for the rapidly changing global trade structure, (b) strengthening the medium- to long-term competitiveness of the strategic export sectors by expanding the size of export finance and (c) reducing the burden of using trade finance for some 2,500 outstanding export businesses selected by the government. Providing strategic support for domestic export businesses First, for exporters seeking to find a new export market or businesses seeking to explore export opportunities in partnership with a large exporter, special financial products worth KRW4.1 trillion-plus will be provided with the availability of interest rate reduction of maximum KRW1.5 percentage points and benefits for guarantee fees and maximum lending limit. To help domestic enterprises to win large-scale oversees project orders, policy financial institutions will each play a role in setting up a project package financing model in which private financial institutions can also participate. At the same time, a KRW500 billion worth of fund will be created to more effectively respond to the shifting global supply chain environment. The fund will provide support for the materials, parts and equipment businesses and provide funds needed to expand their business operation in export destinations or set up new production facilities in another country. Strengthening the medium- to long-term competitiveness of strategic export sectors Policy finance support wo
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Aug 16, 2023

Regulatory Change Proposed Postponing External Audit on Consolidated Internal Accounting Control

The Financial Services Commission issued a notice of legislative change (a revision bill of the Enforcement Decree of the Act on External Audit of Stock Companies) as a follow-up to the previously announced (June 12) plan to make improvements to the accounting regulations. The revision bill contains a provision postponing the requirement of external audit on the consolidated internal accounting control system for small- and medium-sized stock companies (those with assets less than KRW2 trillion) for five years until 2029. For stock companies with assets worth KRW2 trillion or more, the external audit requirement will be enforced as scheduled starting from this year, but those applying for postponement can get a maximum two-year postponement after having a review conducted by the authorities. Those wishing to apply for a postponement should submit applications within the application period (from September 1 to 8). The Securities and Futures Commission (SFC) will then review applications submitted by qualified businesses only and decide whether to grant postponement at a regularly scheduled meeting in November. The companies that have been granted postponement will need to disclose this and the reason for postponement in their business reports. This revision bill will be put up for public comment between August 16 and September 25, while the authorities seek to implement the revision starting from January 2024. * Please refer to the attached file for details.
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Aug 14, 2023

Government Approves Partial Revision Bill of the Enforcement Decree of the Banking Act

The Financial Services Commission announced that a partial revision bill of the Enforcement Decree of the Banking Act was approved by the government at a cabinet meeting held on August 14. This partial revision bill has been prepared to specify the details pertaining to the implementation of the revised Banking Act, which is scheduled to take effect from September 22. First, the partial revision bill of the Enforcement Decree of the Banking Act establishes a specific standard for when a bank should get authorization from the FSC if it chooses to close down or transfers or acquires a major part of its business operation. The major part of a banks business operation is determined as a part of business constituting 10/100 or more of the banks total assets or operating profits. In addition, considering that the transfer of a part of a business is in essence same as the closure of a part of a business, under this partial revision bill, banks are subject to get FSCs authorization when transferring a major part of a business constituting 10/100 or more of the banks total assets or operating profits. For the acquisition of banking business, on top of the aforementioned standard of assets and operating profits, the partial revision bill will subject banks to get FSCs authorization when the amount of debt acquiring is 10/100 or more of the acquiring enterprises total debt. The partial revision bill also contains a provision that specifically sets the minimum amount (KRW10 billion) for loans and payment guarantees extended by an enterprise to a bank for which the bank is required to report at its general shareholders meeting about certain criteria such as the status of the enterprise whose debt has been restructured in a given fiscal year and the details concerning its debt restructuring history. For failure to comply with this reporting duty, the partial revision bill specifically sets the maximum amount of administrative fine that can be imposed on a bank as up to KRW30 mill
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Aug 09, 2023

Household Loans, July 2023

The outstanding balance of household loans across all financial sectors rose KRW5.4 trillion in July 2023 (preliminary), going up for the fourth consecutive month. Compared to the same month last year, household loans dropped 0.8 percent. * Change (in trillion KRW): -8.1 (Jan 2023), -5.1 (Feb), -5.1 (Mar), +0.2 (Apr), +2.8 (May), +3.5 (Jun), +5.4 (Jul) (By Type) Home-backed mortgage loans grew at a slower pace but the pace of decline in other types of loans also slowed. Mortgage loans rose KRW5.6 trillion, despite a decline of KRW0.4 trillion in the nonbanking sector, as banks saw a rise of KRW6.0 trillion. Other types of loans fell KRW0.2 trillion as both banks and nonbanks saw drops of KRW0.01 trillion and KRW0.2 trillion, respectively. (By Sector) Household loans rose in the banking sector but declined in the nonbanking sector. Banks saw a rise of KRW6.0 trillion of household loans in July, which went up for the fourth straight month. Home mortgage loans went up KRW6.0 trillion in the banking sector as individual mortgage loans (up KRW3.9 trillion) and policy mortgage loans (up KRW2.4 trillion) increased. Jeonse loans (down KRW0.2 trillion) and group lending for new apartment subscription (down KRW0.1 trillion) declined. Other types of loans fell KRW0.01 trillion in the banking sector. Household loans in the nonbanking sector declined KRW0.6 trillion due to a drop of KRW1.6 trillion in the mutual finance sector, although insurance companies (up KRW0.5 trillion), savings banks (up KRW0.1 trillion) and specialized credit finance businesses (up KRW0.5 trillion) saw growths. As the growth of household loans has been picking up since April with the volume of housing transactions recovering recently, the financial authorities will closely monitor trends in household loans and work to prepare preemptive measures to stably manage the growth of household loans. * Please refer to the attached file for details.
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Jul 27, 2023

KoFIU Holds Meeting on Strengthening Compliance Capacity of VASPs

The Korea Financial Intelligence Unit (KoFIU) held a consultative body meeting on strengthening the compliance capacity of virtual asset service providers (VASPs) on July 27 along with the joint virtual asset crime investigation unit launched a day before and major VASPs. The meeting was held to ensure strong coordination and cooperation with the newly launched joint virtual asset crime investigation unit, bolster response to illegal activities and support VASPs to enhance their compliance capacity. Speaking at the meeting about the need to strengthen government-wide collective response, KoFIU Commissioner Rhee Yunsu said that although the KoFIU has been carrying out its oversight functions mainly within the framework of anti-money laundering efforts, we will operate a strategic analysis team on virtual assets to more systematically analyze criminal activities involving virtual assets so that we can provide more meaningful and valuable data to the investigative authorities. The consultative body meeting on compliance capacity of VASPs will be held regularly every two or three months to ensure mutual communication. * Please refer to the attached file for details.
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Jul 27, 2023

Authorities Propose Measures to Improve Special Listing Procedures for High-tech Companies

The Financial Services Commission held a meeting with the relevant government ministries and private sector entities on July 27 and unveiled a plan to improve the special listing procedures for technology companies. The plan includes 14 specific reform items from the stage of listing application to listing review to post-listing management. First, in the listing application stage, a new super gap tech listing track will be created for high-tech and strategically critical technology companies, for instance in deep tech or deep science sectors. Among them, businesses that are market-tested for their growth potential will be allowed to have a tech assessment conducted only by a single entity. They need to be designated as national strategic technology companies or national advanced strategic technology companies as prescribed by the relevant laws, have market capitalization of KRW100 billion or more and have received investment of KRW10 billion or more in the past five years. In addition, a business eligible to apply for the super gap tech listing track will be allowed to seek a special tech listing track even when its largest investor is a middle market enterprise, considering wide adoption of open innovation business models based on collaboration between an SME and a middle market enterprise. However, the size of investment by a middle market enterprise will be limited to less than fifty percent to prevent potential problems regarding the ownership of the company. Also, the complex structure of the current special tech listing track will be made simpler and more reasonable. For instance, businesses with technological prowess will be able to apply through innovative technology track, while those with distinctive business models can apply through business model track. Second, in the listing review stage, a fast-track review process will be granted to those that have been turned down previously for reasons other than their technology or business viability. In this case,
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Jul 26, 2023

Housing Loan Rules Temporarily Eased to Facilitate Landlords to Return Rent Deposits

The government announced that the housing loan regulations applied on landlords who are using bank loans (excluding internet-only banks) to return rent deposits to their current tenants will be temporarily eased for one year from July 27, 2023 until July 31, 2024. Under this scheme, landlords will be able to obtain bank loans for the difference between the previous and current jeonseprice of their property. Instead of the 40 percent debt service ratio (DSR) currently in place, a 60 percent debt to income (DTI) ratio will be applied, while the rent to interest(RTI) ratio will be lowered from 1.25 to 1.5 times currently to 1.0 times. With unexpected declines in jeonse prices recently, the measures intend to support tenants to move out on schedule by addressing the problem of a delay in collection of rent deposits or worries about the risk of not being able to receive their rent deposits. When there is no subsequent occupant from whom the landlord can get rent deposit to pay the current tenant immediately, this program allows landlords to use bank loans up to the limit of the eased DTI and RTI ratios. In this case, the landlord will need to fill vacancy and get a subsequent tenant within one year to repay the loan. Declining jeonse prices can cause problems as tenants experience difficulties in receiving their rent deposits back and moving to new places. Therefore, the eased lending rules being applied temporarily for one year are intended to minimize market shock. In order to prevent a potential increase in household debt and to minimize the risk of rent deposits not being returned to subsequent tenants, the government will ensure that the landlords financial capacity to return deposits is thoroughly assessed and that sufficient safeguards are prepared for tenants. The eased lending rules will be implemented through an administrative guidance (July 27). Revision to the regulation on the supervision of banking business will also be completed soon in August. * Please re
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Jul 25, 2023

Government Approves Revised Rules to Improve Financial Dispute Mediation Procedures

The Financial Services Commission announced that a revision bill of the Enforcement Decree of the Act on the Protection of Financial Consumers, which contains measures to improve the financial dispute mediation procedures, has been approved by the government during a cabinet meeting held on July 25. With financial products becoming increasingly diversified and complex in their type and structure, the number of disputes between financial consumers and financial companies has also increased. Due to the increased volume of dispute cases (28,118 in 2018 to 36,508 in 2022, based on the number of registered complaints), the time it takes to process mediations has also increased, causing inconvenience to consumers. Against this backdrop, the revision aims to enhance the speediness and independence of the financial dispute mediation procedures. First, a fast-track mediation process will be newly introduced, allowing cases to move onto the final stage of mediation committee without having to go through the settlement recommendation stage. Whether a case gets fast-tracked will be determined depending on the mediation amount in question and the extent of stakeholders involved. Second, additional standards have been introduced regarding the method of designating members of financial dispute mediation committee to enhance the level of independence in the operation of mediation committees and ensure fairness in how committee members are selected. The revision also includes some other improvement measures that have been brought up by FSCs ombudsman. The revised measures are scheduled to be publicly announced on August 1 and become effective after three months (November 2) from the day of announcement. * Please refer to the attached file for details.
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Jul 20, 2023

KoFIU Announces Measures to Strengthen Responsibility and Professional Capacity in AML Duties

The Korea Financial Intelligence Unit (KoFIU) held a meeting with financial industry groups on July 20 and introduced measures to strengthen responsibility and professional capacity in financial institutions anti-money laundering (AML) duties. The measures have been prepared after having numerous discussions and gathering comments from financial institutions throughout the first half of this year. First, the proposed measures make the role and responsibility of core AML officers (board of directors, chief executive officer, compliance officer and reporting officer) more reasonable to ensure that their AML duties are performed effectively commensurate with their respective position and responsibility. The role of CEOs has been made more specific to clearly indicate what types of activities constitute the establishment and operation of a company-wide AML system. Under the current legal framework, there is no specific indication about the role and responsibility of compliance officers regarding their AML activities. Therefore, the measures introduce a supervisory role on compliance officers over their employees. The measures also adjust the reporting officers scope of responsibilities more realistically so that they can be made accountable for the areas that can actually come under their supervision. Second, the proposed measures strengthen the professional capacity and independence of the reporting officer who is in charge of overseeing the companys AML activities. Financial institutions will need to appoint someone who has at least two years of AML experience. However, considering that there is currently a shortage of AML experts in the market vis--vis the number of financial institutions that are required to comply with AML duties, this requirement will apply only to the financial institutions that are legally bound to have a compliance officer as mandated by the Act on Corporate Governance of Financial Companies (the Act hereinafter). A grace period of two years an
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Jul 19, 2023

FSC Grants Preliminary Approval to Nextrade for Operating Alternative Trading System

The Financial Services Commission decided to grant a preliminary approval to Nextrade Co., Ltd. to operate an alternative trading system (ATS) at the 14th regular meeting held on July 19. The financial authorities have been seeking to introduce ATS platforms to enhance competition between exchanges and promote innovation in capital markets, and this is the first time that authorities are granting a preliminary approval since the legal framework on ATS was first established in 2013. After a review, the FSC found that Nextrade Co., Ltd. met all licensing requirements specified by the Financial Investment Services and Capital Markets Act (FSCMA) and an external review committee also approved the companys qualifications to operate an ATS. Considering the time it is expected to take for preparing a stable network system, Nextrade Co., Ltd. will be given eighteen months from the day of preliminary approval to apply for final authorization. * Please refer to the attached file for details.
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Jul 19, 2023

FSC Designates Eight More Data Specializing Institutions to Promote Big Data Analytics

The Financial Services Commission held the 14th regular meeting on July 19 and designated eight additional data specializing institutions (BC Card, Samsung SDS, Samsung Card, Shinhan Bank, Shinhan Card, LG CNS, Coocon, and Statistics Korea), bringing the total number of data specializing institutions to twelve. Data specializing institutions provide data convergence service on behalf of businesses when they develop new business strategies or services and evaluate the appropriateness of the pseudonymized data. In order to ensure the safety and efficiency of big data usage in financial sectors, data specializing institutions have been designated by the FSC since 2020 pursuant to the Credit Information Use and Protection Act. Since 2020, business demand for data convergence particularly between the financial and non-financial sectors has continued to increase. To ensure fairness, transparency and objectivity in data convergence, the seven newly designated data specializing institutions from the private sector other than Statistics Korea will be required to provide 50 percent or more of their data convergence services to non-affiliated external entities. With the addition of eight more data specializing institutions, it is expected that data convergence between different sectors as well as opening up of more private sector data will be promoted. * Please refer to the attached file for details.
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