Press Releases - Financial Services Commission

Press Releases

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Jun 30, 2023

Government to Ensure Virtual Asset User Protection, Transaction Transparency and Market Discipline

The Financial Services Commission announced that the Act on the Protection of Virtual Asset Users (the Act hereinafter) was passed at the National Assemblys plenary session on June 30. The newly established law on virtual assets is aimed at guaranteeing protection of assets held by virtual asset users, regulating unfair transaction activities in the virtual asset market and conferring the market oversight and sanctions authority to the FSC. Virtual asset service providers have been regulated under the revised Act on Reporting and Using Specified Financial Transaction Information since March 2021. However, the current regulatory framework had limits where authorities are not able to actively respond to various types of unfair transaction activities, prevent damages incurred to the users of virtual assets and more effectively supervise and sanction VASPs and assist victims with relief measures. Since the onset of this administration, the government has put forward establishing the infrastructure and regulatory framework on digital assets as a key policy agenda and has been supporting the relevant legislative process at the National Assembly. In August 2022, a private-public joint taskforce on digital assets was launched which established the following principles on the direction of creating a virtual asset regulatory framework(a) working on a gradual and phase-by-phase introduction of regulations, (b) applying same regulations on the same service and same risk and (c) ensuring global regulatory consistency with major economies and international organizations. On April 25 this year, given the urgency of protecting virtual asset users, the legislative subcommittee of the National Policy Committee at the National Assembly decided to go ahead with an enactment of the least necessary regulatory measures. Then, a legislative bill integrating nineteen previously pending bills was prepared and passed at the plenary session of the National Assembly on June 30. First, the Act e
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Jun 27, 2023

Campaign to Return KRW12.4 Trillion in Unclaimed Insurance Money to Begin in September

The Financial Services Commission along with the insurance industry returned about KRW3.9 trillion in unclaimed insurance money to their policyholders in 2022 and plan to send out postal mail in September to inform relevant policyholders about KRW12.4 trillion in unclaimed insurance money still remaining. This campaign to return unclaimed insurance money has been in place since 2017 and over the past five years more than KRW16.8 trillion worth of dormant insurance money has been returned to the policyholders (KRW3.85 trillion in 2022). Meanwhile, the FSC, the insurance sector and the Korea Inclusive Finance Agency (KINFA) plan to shorten the period for transferring dormant insurance money to KINFA by about one year starting from 2024. Insurance companies transfer dormant insurance money to KINFA pursuant to the Microfinance Support Act as a form of contribution. Therefore, for insurance companies, the period to make this transfer of dormant insurance money occurring within this year will be reduced from February the year after next year (2025) to May (expected) next year (2024). Once transferred to KINFA, dormant insurance money can be traced and retrieved along with other types of dormant financial assets on KINFAs mobile app or website. * Please refer to the attached file for details.
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Jun 26, 2023

KRW300 Billion Fund to be Newly Created to Enhance Competitiveness of Semiconductor Industry

FSC Vice Chairman Kim So-young held the 3rd consultative body meeting on policy finance support with the relevant government ministries and policy financial institutions on June 26. At the meeting, authorities checked the progress of funding supply to five major strategic sectors between January and May this year and discussed offering a preferential funding supply process for outstanding businesses in each industrial sector. Between January and May 2023, policy financial institutions such as the Korea Development Bank, the Industrial Bank of Korea and the Korea Credit Guarantee Fund supplied a total of KRW46.3 trillion in funding support to the five major strategic industrial sectors, which amounted to about 50.5 percent of the total of KRW91 trillion targeted for the whole year. At the meeting, authorities also discussed ways to select outstanding businesses in each industrial sector in order to more effectively provide targeted funding support for businesses that fit the direction of the governments industrial policy strategies. In this regard, a comprehensive checklist has been prepared for selecting outstanding businesses and the checklist-qualified enterprises will be eligible to receive the benefit of a fast-tracked credit evaluation process. After having an inter-ministerial consultation process, authorities have already prepared a checklist on eleven industrial sectorsfor now and plan to review whether to expand the eligibility to additional industrial sectors in the future when drawing up a policy finance support plan for 2024. Prior to todays meeting, Vice Chairman Kim and First Vice Minister of the Ministry of Trade, Industry and Energy Jang Youngjin held an agreement ceremony to launch a KRW300 billion worth of fund intended to make targeted investments in the domestic semiconductor ecosystem along with key chip makers and policy financial institutions. The newly created fund will invest in semiconductor materials, parts and equipment manufacturing busi
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Jun 22, 2023

FSC Proposes Measures to Strengthen Internal Control of Financial Companies

The Financial Services Commission held a meeting with the Financial Supervisory Service and financial industry groups on June 22 and announced a plan to improve financial companies internal control system. As a key policy agenda of this administration, the proposed measures have been prepared after having discussions and gathering opinions from experts and financial companies since October last year. First, financial companies will be required to clearly designate internal control responsibility of each executive officer. This is not a uniform regulatory requirement imposed by the financial authorities. By having financial companies to set up and operate an internal control system on their own according to their own needs and circumstances and by having the responsibility of each executive officer clearly assigned, the proposed measures are aimed at raising awareness and responsibility of executive officers about their internal control system. More specifically, a CEO of a financial company will need to prepare a responsibilities map showing how internal control responsibilities are shared and divided among executive officers. The responsibilities map will specify the executive members who bear the ultimate responsibility for each work area, laying groundworks to prevent them from delegating internal control duties to subordinates. Executive officers designated on the responsibilities map will be required to comply with the internal control management duty by regularly checking the appropriateness of internal control standards, whether their employees are complying with the standards and whether their internal control standards are operating properly. As the top overseer of internal control, the CEO of a financial company will be responsible for establishing a company-wide internal control system and supervising each executive officers internal control activities. As of now, CEOs of financial companies are only required to establish internal control standards. Howev
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Jun 21, 2023

FSC Approves Financial Hub Development Plan for 2023-2025

The Financial Services Commission held the 12th regular meeting on June 21 and finalized the 6th financial hub development plan for 2023-2025. The 6th three-year plan to promote financial hubs in Korea contains the following four key task areas which will allow the government and the financial sector to quickly respond to the changing global financial environment and actively make use of the areas where the Korean financial industry has a comparative advantage. Task #1: Continue to seek innovation in financial regulations and boost support for fintech businesses to enhance global competitiveness of Korean financial companies amid digital transformation. Task #2: Establish relevant infrastructure to be able to make the most use of the changing trends in financial environment and revamp the foreign exchange trading system. Task #3: Overhaul regulations to help increase global investors investment in domestic capital markets and boost global competitiveness of capital markets and asset management market. Task #4: Make utmost use of the financial industry globalization taskforce to provide active support for domestic financial companies business expansion overseas and to create synergetic effects with the efforts to promote foreign financial companies entry in domestic market. * Please refer to the attachmentfor details.
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Jun 21, 2023

FSC Designates Korea Financial Investment Association as Critical Benchmark Administrator

The Financial Services Commission selected Korea Financial Investment Association (KOFIA) as the administrator of a critical benchmark rate (certificate of deposit rate) and approved the rules governing its calculation and publication duties of CD rates during its regular meeting held on June 21. In March 2021, the FSC selected CD rate as a critical benchmark rate under the Act on the Management of Financial Benchmarks. With the FSCs selection of KOFIA as a critical benchmark administrator and approval of its duties, CD rate as a critical benchmark rate will begin to have legal effect beginning on October 2 this year after a grace period of about three months (from June 22 to October 1) granted for adjustment in its calculation method. The method for calculating CD rates will be changed to a waterfall calculation method based on real transactions and expert judgment from the method that previously relied on securities companies submitting asking prices on a voluntary basis. Meanwhile, the frequency of calculating and publishing CD rates will be reduced from twice daily (12:00 and 16:30) previously to once a day (16:30). Due to their low level of usage, CD rates of specialized banks (Korea Development Bank and Industrial Bank of Korea) will no longer be calculated or published. During the three-month grace period, KOFIA will prepare a standard manual on CD rates and hold information sessions to ensure a seamless utilization of newly calculated CD rates. * Please refer to the attached filefor details.
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Jun 20, 2023

Government to Provide Active Support to Facilitate Innovative Tech Companies to Raise Funds

The Financial Services Commission announced on June 20 that the government will make all out efforts to facilitate innovative tech companies to raise funds through capital markets. To this end, the government plans to make changes to tech companies special listing rules and facilitate fundraising through MAs (mergers and acquisitions) and venture capital investment. First, in an inter-ministerial collaborative effort, the government plans to go on a series of roadshow in search for deep tech businesses to help cultivate their growth and listing on the stock exchange for about a month starting from June 21. Also, authorities will revamp the special listing system for tech companies and announce the improvement measures in July. Since 2005, the Korea Exchange has been operating various special KOSDAQ listing tracks for technologically innovative businesses or those with growth potential even when they are making no profit or have no sales record. So far, 184 companies made the listing on KOSDAQ through special listing tracks but still there are many startups and SMEs that are unaware of their eligibility or that lack relevant information. Thus, a month-long tech special listing roadshow will provide opportunities for tech companies to get information about the listing procedure and necessary preparatory work. Second, the FSC, the FSS and the KRX will set up a taskforce with relevant government ministries and other research and industry organizations with an aim to draw up measures to improve the rules and operation of special listing tracks for tech companies. The taskforce will look into the problem of having to go through a time-consuming and costly tech evaluation process for tech companies. Despite growing significance of open innovation where a startup company and a mid-sized company can make joint investment, the current regulations are restrictive for promising tech startups to scale up and commercialize their technology due to certain restrictions in the tech
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Jun 20, 2023

Authorities Review Market Situation and Discuss Rollback of Eased Regulatory Measures

The Financial Services Commission held a meeting with the Financial Supervisory Service, the Bank of Korea and financial industry associations on June 20 to check current market situation and discuss the progress of market stabilization measures and the operation of eased financial regulations. With financial market conditions stabilizing, demand for market stabilization programs remains not so high currently. However, to be prepared for uncertainties at home and abroad, authorities already made an agreement on continuing to make the PF-ABCP (project finance asset backed commercial paper) purchase program available until the end of February 2024 for PF-ABCPs guaranteed by securities firms.Market stabilization programs including the bond market stabilization fund and the corporate bond and CP purchase program currently have KRW35 trillion in their remaining capacity, which provides an ample room to respond in the future in the case of market instability. In addition, authorities are closely monitoring the real estate PF market and taking necessary steps to help normalize the projects considered to be facing the risk of default. In this regard, the real estate PF lending institutions consortium agreement was activated to ensure an orderly normalization of at-risk projects. Regarding the temporary easing of regulations applied on banks, insurers, savings banks, specialized credit finance businesses and financial investment businesses since after October of last year and extended partially in March 2023, participants evaluated that financial institutions are currently capable of responding to risks without the support made available by additional extension. However, to be prepared for potential expansion of uncertainties in the future, participants agreed on extending the availability of eased regulations for certain areas. As such, the eased regulations on banks loan-to-deposit ratio, credit offering limit between subsidiaries of a financial holding company and insuran
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Jun 19, 2023

FSC Concludes Series of Meetings on Promoting Overseas Expansion of Korean Financial Businesses

The Financial Services Commission held a meeting with the Financial Supervisory Service, relevant industry groups and financial institutions on June 19 and had discussions on ways to promote overseas expansion of domestic financial businesses and seek regulatory overhaul. Since launching a taskforce on the globalization of financial industry in March this year, authorities held a series of seminars and meetings with different sectors and todays meeting is the final session concluding what have been discussed thus far. At the beginning of the meeting, FSC Vice Chairman Kim So-young delivered opening remarks and outlined the FSCs plan to improve regulations in the following four areas(a) acquisition of a foreign subsidiary to bolster global competitiveness, (b) raising funds for an overseas subsidiary by the parent company, (c) flexible application of domestic use only regulations on overseas branches, and (d) removing excessive redundancy in disclosure and reporting duties and switching the current ex ante reporting requirement to ex post reporting The FSC plans to draw up and announce in July specific regulatory reform measures in support for domestic financial companies business expansion overseas. To help resolve the difficulty of financial companies in getting in touch with local financial regulatory agencies abroad and to address the shortage of information available on foreign markets, authorities also introduced measures to strengthen cooperation networks with relevant authorities for overseas expansion of domestic financial businesses. * Please refer to the attached filefor details.
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Jun 15, 2023

FSC Holds Financial Cooperation Forum with Thailand and Attends IOSCO Annual Meeting

The Financial Services Commission held the Korea-Thailand Financial Cooperation Forum and attended the 48th annual meeting of the International Organization of Securities Commission (IOSCO) held in Bangkok, Thailand on June 12-15. Korea-Thailand Financial Cooperation Forum The FSC held the Korea-Thailand Financial Cooperation Forum with the Bank of Thailand and the Council on International Financial Cooperation on June 13. The forum was attended by about a hundred regulatory authorities and relevant officials from both countries, and the participants held discussions on (a) the current status of financial markets and banking industry in both countries and (b) ways to increase bilateral cooperation on financial innovation and development. At the forum, Securities and Futures Commission (SFC) Standing Commissioner Kim Jeong-kag of the FSC delivered congratulatory remarks and talked about the importance of bilateral cooperation between the two countries. In his speech, Standing Commissioner Kim said that Koreas experience with online-only banks, open banking and financial MyData services can offer valuable examples regarding digital transformation of the financial sector and that Korean financial institutions are very much willing to participate and contribute to Thailands virtual banking initiative. IOSCO Annual Meeting The FSC and the FSS attended the 48th IOSCO annual meeting held on June 12-15. At this years meeting, the member countries held discussions on various capital market issues such as sustainable finance, managing fund liquidity risks, private equity financing, leveraged loans and collateralized loan obligations (CLOs). Regarding the issue of the IOSCO Board officially endorsing the sustainability disclosure standards prepared by the International Sustainability Standards Board (ISSB), the Korean delegation agreed with the suggestion for endorsement in principle but added that due to different regulatory and industry preparation in each member country, th
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Jun 12, 2023

FSC Plans to Improve Accounting Rules to Enhance Transparency and Stability

The Financial Services Commission announced a plan to make improvements to a set of key accounting rules on June 12, taking into account a comprehensive set of factors discussed and recommended by academic and industry experts. Since the accounting reform of 2017 (regarding the Act on External Audit of Stock Companies), there have been both positive and negative opinions in the past five years about the newly introduced accounting rules such as the periodic designation of an external auditor. Compared to the pre-reform period, experts generally see that the reform measures have helped to improve accounting transparency. However, businesses have called for making improvements to the system as they have been questioning whether the benefit outweighs the cost in introducing the reform measures. Against this backdrop, the FSC hasprepared the following measures to improve the accounting rules introduced five years ago. Lowering burden of external audit on internal accounting control system The cost of stock companies for setting up and maintaining an internal accounting control system is estimated to be about 90 percent of the cost paid out for audit fees. This sharp rise in their accounting costs has presented difficulties for many businesses. Meanwhile, a study by Korea Accounting Association finds that for stock companies with less than KRW2 trillion in assets, the relationship between the effectiveness of having a separate internal accounting control system and boosting their accounting transparency remains not so clear. Thus, authorities will postpone 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 (from 2024 to 2029). For those with assets worth KRW2 trillion or more, the external audit requirement will be implemented as scheduled starting from this year, but those asking for a postponement on their consolidated internal ac
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Jun 12, 2023

2023 Korea Fintech Week Scheduled to be Held from August 30 to September 1

The annual global fintech expo, 2023 Korea Fintech Week, is scheduled to be held from Wednesday, August 30 to Friday, September 1 at Dongdaemun Design Plaza (DDP) in Seoul this year. The 2023 Korea Fintech Week will be held on the theme of the new wave of fintech, providing a venue for fintech businesses, financial companies, big tech platforms and investors to come together to share some of the latest fintech trends, pitch innovative business models and promote investment in the fintech industry. A variety of programs including fintech exhibitions, theme-based seminars and events for first-hand fintech experience will be available for participants. In order to actively support domestic fintech firms business expansion in overseas markets, this years Korea Fintech Week will have an expanded size of global hall to promote participation by many investors, accelerators and venture capitalists from many different countries. In addition, a collaboration hall will be newly set up for operation this year to encourage participation by the entire domestic fintech ecosystem including local government bodies, relevant organizations and universities. Also, a variety of helpful programs and events including a global fintech talk with a foreign influencer, fintech idea contest, finance-themed musical and fintech job mentoring and career consulting will be available to help visitors to learn about various fintech services and trends in an easy and fun way. It is expected that the 2023 Korea Fintech Week will provide vast opportunities to expand and reinvigorate Koreas fintech ecosystem. * Please refer to the attached filefor details.
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Jun 09, 2023

Household Loans, May 2023

The outstanding balance of household loans (preliminary) across all financial sectors went up KRW2.8 trillion in May 2023, which rose for the second consecutive month. Financial authorities will closely monitor trends in household debt and work to ensure stable management of household loans. (Overall) Household loans across all financial sectors rose KRW2.8 trillion in May 2023, but the year-on-year growth rate edged down 1.4 percent, showing a continuous trend of declining balance on year since November 2021. (By Type) Mortgage loans grew at a faster pace for the third consecutive month and other types of loans declined at a slower rate for three month in a row. Mortgage loans went up KRW3.6 trillion, despite a decline of KRW0.6 trillion in the nonbanking sector, as banks saw an increase of KRW4.3 trillion. Other types of loans fell KRW0.8 trillion as both the banking and nonbanking sectors saw a drop of KRW0.02 trillion and KRW0.8 trillion each. (By Sector) Household loans rose in the banking sector but fell in the nonbanking sector. Household loans in the banking sector increased KRW4.2 trillion in May, edging up for the second straight month. Mortgage loans from banks grew KRW4.3 trillion, despite a drop in jeonse loans (down KRW0.6 trillion), as the volume of policy mortgage loans (up KRW2.8 trillion), general individual mortgage loans (up KRW2.0 trillion) and group lending for new apartment subscription (up KRW0.1 trillion) increased. Other types of loans in the banking sector declined (down KRW0.02 trillion) at a slower pace compared to a month ago (down KRW0.5 trillion) as credit loans expanded from a fall in the previous month (down KRW0.6 trillionup KRW0.03 trillion). Nonbanks saw a drop of KRW1.4 trillion in household loans with slight increases in the insurance (up KRW0.4 trillion) and specialized credit finance (up KRW0.4 trillion) sectors but declines in mutual finance (down KRW2.2 trillion) and savings banks (down KRW0.03 trillion). The pace of declin
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Jun 08, 2023

Authorities Hold 1st Meeting on Benchmark Rate and Short-term Money Market

The Financial Services Commission held a meeting with the Bank of Korea, the Financial Supervisory Service and relevant industry groups and institutions to monitor how domestic financial institutions are preparing for a transition away from LIBOR (London interbank offered rate) and discuss issues surrounding the operation of domestic financial benchmark rates. In coordination with relevant institutions and financial companies, the government has been working to make a transition away from LIBOR, responding to the European Unions Benchmark Regulation (BMR) compliance and participating in the global benchmark rate reform efforts. The following is an overview of these efforts so far. First, all financial contracts based on non-USD LIBOR, which ceased to be published in 2022, were successfully converted, and financial contracts based on LIBOR, which will be discontinued from July 2023, are being converted to an alternative rate such as secured overnight financing rate (SOFR). As of the end of May 2023, about 95.3 percent of domestic financial institutions contracts have made this transition. Second, the government enacted the Act on the Management of Financial Benchmarks, which became effective in November 2020 and reflects international standards on benchmark rate reform, to strengthen credibility of domestic benchmark rates. In order to ensure a seamless utilization of domestic benchmark rates (Korea overnight financing repo rate and certificate of deposit rate) in the European Union, authorities have been working with EU counterparts to get an approval for congruity. Third, in February 2021, authorities selected the Korea Overnight Financing Repo Rate (KOFR) as Koreas new risk-free reference rate (RFR) and designated it as a critical benchmark rate under the Act on the Management of Financial Benchmarks. The KOFR is being published by the Korea Securities Depository (KSD) since November 2021. Currently, three-month KOFR futures and exchange traded funds (ETFs) have b
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Jun 08, 2023

FSC Holds Meeting to Monitor Soft-landing of Maturity Extension and Payment Deferment Support

FSC Vice Chairman Kim So-young presided over a meeting with the Financial Supervisory Service and relevant financial industry groups on June 8 to review current status of the efforts to soft-land the loan maturity extension and payment deferment program. The maturity extension and payment deferment program was introduced in the wake of the coronavirus pandemic to support SMEs and small merchants experiencing temporary liquidity problems. Since it was first launched in April 2020, the availability of support program was extended every six months. Currently, it is available under the measures to soft-land loan maturity extension and payment deferment for self-employed and SMEs, the fifth such six-month extension plan announced in September 2022.In accordance with the measures announced in last September, maturity extension is available for three years (until September 2025) and payment deferment is available until September 2028 according to individual payment plans submitted by borrowers. Specific terms of their payment plans (interest-only period, installment payment plan, etc.) are drawn up in consultation with each financial institution. Some of the key statistics of the maturity extension and payment deferment program as of the end of March 2023are as follows. Compared to the end of September 2022, the amount of loan balance and the number of borrowers receiving support declined by about KRW15 trillion and 46,000, respectively, as shown in the table below. This shows a smooth landing of the support program as borrowers are recovering payment capabilities due to improving business conditions, availability of low interest rate refinancing loans, debt adjustment support and so on. At the meeting, Vice Chairman Kim So-young said that authorities will work to ensure a soft-landing of the support program and continue to operate a help center at the FSS to make sure that borrowers can seek consultation on their payment plans, debt adjustment and the availability of othe
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Jun 08, 2023

KRX Derivatives Market to Open 15 Minutes Early Starting from July 31

Financial authorities announced that the derivatives market, which currently opens at the same hour as stock markets, will open fifteen minutes early at 8:45 am beginning on July 31. The Financial Services Commission, the Financial Supervisory Service and the Korea Exchange announced the plan at a seminar held on the topic of strengthening the global competitiveness of financial investment business on June 8. The need and the plan for early opening was discussed at the second such seminar held in April this year. At that time, FSC Vice Chairman Kim So-young said that the derivatives markets early opening will help ease price volatility in stock market at opening hours and improve global consistency. Since its launch in 1996, the opening hour for derivatives market has remained the same as the opening hour of stock markets. Prices determined in the derivatives market reflect various expectations from market participants about the future prices of underlying assets (price discovery function). However, unlike in overseas markets, Korea has the same opening hour for both the spot market and futures market, which has made it difficult for stock investors to discover prices of derivatives products during the early hours of stock trading sessions. Also, due to the same opening hour, price volatility has been high in stock market especially at the time of market opening (for about fifteen minutes) as adjustments needed to take place in the futures market prior to the stock market opening are directly reflected in stock prices. In this regard, to help ease stock markets early-hour price volatility, financial authorities and the KRX plan to move up the derivatives markets opening hour fifteen minutes from 9:00 am currently to 8:45 am in line with international standards. Thus, the normal trading hours will be extended by fifteen minutes (from 9:00~15:45 currently to 8:45~15:45) and the single-price auction hours will be reduced by fifteen minutes (from 8:30~9:00 currently to
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Jun 05, 2023

Foreign Investor Registration Requirement to be Abolished in Korea

The government approved a revision bill of the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) abolishing the foreign investors registration requirement at a cabinet meeting held on June 5. The foreign investor registration system, which has been in place for about three decades since 1992, will be abolished starting from December 14 this year, six months after promulgation of the revised law which is expected to be on June 13. Under the foreign investor registration system, foreign investors had to register with the Financial Supervisory Service (FSS) prior to investing in locally listed securities (stocks, bonds, etc.). For foreign investors, opening an investment account at a securities firm was possible only after registering with the authority and being assigned a registration certificate (foreign investor ID). As this process can be time-consuming and requires much paperwork, this rule was pointed out as a significant barrier for foreign investors in investing in Korean stock markets. Moreover, this kind of registration requirement for foreign investors is not being implemented in major advanced economies such as the U.S. and Japan. Thus, from the perspective of making Korean regulations more consistent with global standards, global investors have made continuous calls for the need to change this rule. Introduced in 1992 to manage foreign investors maximum investment limit, the foreign investor registration system has been in place for the past three decades without much change despite the fact that the foreigners investment limit was abolished in 1998 in principle, leaving only 33 items under the authorities watch for foreigners total holding limit and two items for foreign individual holding limit out of some 2,500 listed companies currently. Once the revised Enforcement Decree of the FSCMA takes effect, foreign investors will be able to open investment accounts at securities firms without having to go through a prior
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Jun 01, 2023

FSC Holds Meeting to Monitor Progress of Real Estate PF Market Normalization

The Financial Services Commission held a meeting on June 1 to monitor progress in the normalization of the real estate project finance (PF) market along with officials from the Financial Supervisory Service, Creditors Coordination Committee, major financial holding groups and relevant policy financial institutions. As of the end of May 2023, a total of 30 real estate development projects have become subject to the assistance of the real estate PF lending institutions consortium agreement. Among them, business normalization is under way for 19 projects through provision of rollback on acceleration clause, new funds, deferment of interest payments and maturity extension. At the meeting, officials also went over the status of the support programs already announced and being provided by policy financial institutions such as business guarantees and policy finance support being offered by the Korea Housing Urban Guarantee Corporation (HUG) and Korea Housing Finance Corporation (HF), as well as KRW1 trillion worth of funds managed by Korea Asset Management Corporation (KAMCO). To support a seamless transition from short-term bridge loans to PF loans, the government already announced its plan to provide business guarantees worth KRW15 trillion through HUG and HF until the end of this year. As of May 30, the policy financial institutions provided a total of KRW6.01 trillion (KRW3.34 trillion by HF and KRW2.67 trillion by HUG) in support of the normalization of real estate projects. In addition, the special guarantee program set up to help alleviate anxieties in refinancing PF-ABCPs (asset backed commercial papers) provided a total of about KRW1.211 trillion (KRW0.12 trillion by HF and KRW1.914 trillion by HUG). To help ease the liquidity burden of regional real estate PF sites outside the Seoul metropolitan area and small- and medium-sized construction firms, the Korea Development Bank (KDB), Industrial Bank of Korea (IBK) and Korea Credit Guarantee Fund (KODIT) plan to prov
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May 31, 2023

FSC Announces 6th Financial Hub Policy

The FSC held the 49th meeting on promoting financial hubs in Korea on May 31 and decided on the 6th financial hub policy for 2023-2025. At the meeting, FSC Chairman Kim Joo-hyun delivered opening remarks and discussed some changes that took place in the global financial environment over the past three years. In this regard, Chairman Kim said that compared to the year 2020 when the 5th three-year plan for promoting financial hubs in Korea was formulated, todays global financial environment is experiencing rapid changes amid digital transformation and spread of sustainable finance. In this regard, Chairman Kim stressed that how we respond to these changes will determine the competitiveness of global financial hubs. As such, the 6th three-year plan to promote financial hubs in Korea contains the following four key task areas which will allow the government and the financial sector to quickly respond to the changing global financial environment and actively make use of the areas where the Korean financial industry has a comparative advantage. a) Continue to seek innovation in financial regulations and boost support for fintech businesses to improve the global competitiveness of Korean financial companies amid digital transformation. b) Ensure establishment of relevant infrastructure to be able to make the most use of the changing trends in financial sector such as digital finance and sustainable finance. c) Pursue bold regulatory reforms to help increase foreign investors investment in domestic capital markets and alleviate factors associated with the so-called Korea discount. d) Make utmost use of the financial industry globalization taskforce to provide active support for domestic financial companies business expansion overseas and to create synergetic effects with the efforts to promote foreign financial companies entry in domestic market and the Seoul and Busan metropolitan governments own financial hub development strategies. At todays meeting, the Seoul Metropolit
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May 30, 2023

Online One-stop Loan Transfer System Available

The FSC announced that financial consumers will be able to make a switch from their existing credit loans to loans offering more favorable borrowing conditions using their smartphones without having to visit a branch office of financial institutions beginning on May 31. Establishing an online one-stop loan transfer system has been a key policy agenda of this administration to help alleviate peoples interest payment burdens and promote digital transformation in the financial sector and competition between banks. In this regard, the FSC has been closely working with the Financial Supervisory Service, the Korea Financial Telecommunications Clearings Institute, major financial companies and fintech businesses to launch an online one-stop loan transfer system. In particular, prior to its launch on May 31, authorities have closely looked into ways to improve user convenience and guarantee stability and security of the system. Beginning on May 31, consumers will be able to use their smartphone apps (MyData-enabled loan comparison platform app or major financial company apps) to search for loans offering better borrowing terms and make a switch from their existing credit loans issued by 53 financial institutions (19 banks, 18 savings banks, 7 credit card companies and 9 specialized credit finance businesses). The online one-stop loan transfer app service will be available during the banks operating hours from 9:00 am to 16:00 pm on business days. Consumers can use the loan transfer service for their existing credit loans of up to KRW1 billion issued by 53 financial companies. From the time of downloading a mobile app until completing the verification of result, the service usage time is estimated to be around fifteen minutes, which is significantly shorter than at least two business days it took for consumers to visit the branch office of two financial institutions previously. The loan conditions calculated for consumers will be based on the same lending standards (maximum
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