-
Jul 31, 2006
- FSC Announces a Task Force on Capital Market Consolidatiln Legislation
- The Financial Supervisory Commission announced on July 17 the formation of a task force on the capital market consolidation legislation (provisionally titled “Financial Investment Services and Capital Market Act”) in order to conduct a thorough review of the new legislation and come up with recommendations for the Ministry of Finance and Economy. The task force was formed as part of the ongoing effort by the FSC to reduce regulatory arbitrage, provide a consistent regulatory framework and facilitate a balance growth of the capital market.In light of the importance and urgency the government attaches to the capital market consolidation legislation, the Securities and Futures Commission will lead the task force with nine senior officers from the FSC and the FSS. The task force will be supported by five staff-level teams that will separately focus on securities, asset management, unfair market conduct, banking, and trust services.The key areas of focus for the task force are:- Whether additional reinforcement measures are needed in the conflict-of-interest provisions for financial service firms offering multiple investment advisory services (articles 43 and 44 of the proposed legislation);- Whether additional reinforcement measures are needed for investor protection and for effective supervisory oversight (investor protection provisions, articles 45-51; safeguard measures against unfair market conduct, articles 70, 82, 92, and103);- Whether regulatory provisions are open to multiple interpretations (appropriateness of the meaning of investment product and investment business, articles 3-7), and- Follow-up measures and further reinforcement steps in the supervisory regulations.The task force is expected to complete its work by September and work closely with the Ministry of Finance and Economy on its recommendations for the capital market consolidation legislation.* Please refer to the attached PDF for details.
-
Jul 31, 2006
-
Jun 21, 2006
-
Jun 21, 2006
-
Jun 21, 2006
-
May 22, 2006
- Chairman/Governor Yoon Jeung-Hyun Holds High-Level Talks in Washington, D.C., and Attends 8th Integrated Financial Supervisor
- Chairman/Governor Yoon Jeung-Hyun of the Financial Supervisory Commission and the Financial Supervisory Service met with senior U.S. regulators in Washington, D.C., and attended the 8th Integrated Financial Supervisors Conference in Budapest, Hungary.During his visit to the U.S., Chairman/Governor Yoon met with Fed Chairman Ben Bernanke, SEC Chairman Christopher Cox, OCC Comptroller John Dugan, and Deputy Secretary of the Treasury Robert Kimmitt in Washington, D.C., and discussed financial supervision, steps to strengthen supervisory ties between the two countries, the new capital accord, and other issues of mutual interest.In New York City, Chairman/Governor Yoon met with President Timothy Geithner of the Federal Reserve Bank of New York and discussed banking supervision and facilitating supervisory support to each other. Chairman/Governor Yoon also delivered a speech before Asia Society stressing the need for close regional and global cooperation to ensure financial stability and promote economic growth. He also held a roundtable discussion with the heads of major U.S. financial institutions on the success of Korea’s regulatory reform and the financial hub initiative.After the meetings in the U.S., Chairman/Governor attended the 8th Integrated Financial Supervisors Conference in Budapest, Hungary, on May 18-19. The IFSC is an annual gathering of the heads of integrated supervisory authorities that first began in 1999 to promote sharing of knowledge and experiences on integrated financial supervision and enhance cooperation on areas of common interest among the integrated supervisors.The agenda for this year’s conference were updates on major developments in the member countries, quality management of financial supervision, informal power and responsibility, and integrated supervision cross-border issues. During the conference, Chairman/Governor Yoon met separately with Chairman Callum McCarthy of the U.K. Financial Services Authority for the annual high-level
-
May 04, 2006
-
Mar 22, 2006
- FSS to Host China Japan Korea Trilateral Financial Supervisory Cooperation Seminar
- The Financial Supervisory Service will host a two-day China Japan Korea Trilateral Financial Supervisory Cooperation Seminar in Seoul on March 28 and 29 with representatives from the China Banking Regulatory Commission and the Financial Services Agency of Japan.The seminar is a meeting of regulators and researchers the FSS proposed to forge closer ties and facilitate supervisory cooperation among the supervisory authorities of the three countries. It also follows a proposal FSC Chairman and FSS Governor Yoon Jeung-Hyun made in March 2005 to hold regular meetings among the heads of the supervisory authorities of China, Japan, and Korea to help reinforce trilateral financial supervisory cooperation.The Chinese delegation will be led by Mr. Han Mingzhi, Director General of International Department of China Banking Regulatory Commission, and the Japanese delegation by Mr. Chihara Nobuyoshi, Deputy Commissioner for International Affairs at the Financial Services Agency. Dr. Lee Jang Yung, Assistant Governor of the FSS, will lead the seminar as the host.At the seminar, Dr. Ba Shusong from Development Research Institute of China, Mr. Shirakawa Shunsuke from the FSA, and Dr. Park Hae-Sik from Korea Institute of Finance are scheduled to make presentations and lead discussions on topics ranging from supervisory challenges under Basel II and monitoring of hedge funds to early warning systems for financial supervision.* Please refer to the attached PDF for details.
-
Mar 13, 2006
-
Feb 16, 2006
- Equity Disclosure Filings for Publicly Held Companies: 2005
- Equity disclosure filings for publicly held companies for 2005 show a total of 2,409 investors held, together with related parties, five percent or more of the outstanding shares of 1,600 publicly held companies–689 Stock Market-listed and 911 KOSDAQ-listed companies–as of the end of the year. Eight tender offers and 133 proxy solicitations were made during the year, compared with 16 and 156, respectively, for 2004.Disclosures Related to the Five-Percent RuleDisclosures filed under the five-percent reporting rule totaled 10,216, up 2,988 or 41.3% from 7,229 a year earlier. The total figure for 2005 included 1,791 re-filings mandated under the amended reporting rule that took effect March 29, 2005.A breakdown of the filings by investment purpose shows investors who disclosed “Exercising Influence on the Management” numbered 1,591–in 1,553 companies, 657 Stock Market-listed, 896 KOSDAQ-listed–in 2005. Investors who disclosed “Investment Only” numbered 884–in 942 companies, 422 Stock Market-listed, 520 KOSDAQ-listed).Filings by Foreign InvestorsA total of 267 foreign investors–253 legal entities and 14 individuals–held five percent or more of equity interests in 450 publicly held companies, of which 218 were Stock Market-listed and 232 KOSDAQ-listed.Tender Offer FilingsEight tender offer filings were made in 2005: three for increasing the management’s control and five for going private. One of the eight tender offer filings was made by a foreign investor. In 2004, there were 16 tender offer filings, of which four were filed by foreign investors.Proxy SolicitationsA total of 133 disclosures were filed for proxy solicitation in 2005. Of the total, 114 or 85.7% were for meeting the quorum requirements in the general shareholders’ meeting, compared to 119 or 76.3% in 2004. The rest were for proxy contests* Please refer to the attached PDF for details.
-
Feb 09, 2006
- Bank Loans Classified as Substandard or Below: End-2005
- Preliminary figures show bank loans classified as substandard or below (SBLs)– substandard, doubtful, or presumed loss–totaled KRW9.7 trillion at the end of 2005, compared with KRW13.9 trillion a year earlier. During the same period, the ratio of SBLs to the total outstanding loans fell to 1.22% from 1.90%.Aggressive write-offs and disposition of SBLs totaling KRW20.1 trillion during the year and a sharp drop in new SBLs totaling KRW15.9 trillion–compared with KRW26.5 trillion a year earlier–helped to drive SBLs and the SBL ratio lower for 2005.Of the KRW20.1 trillion SBLs cleaned up during the year, loan write-offs made up KRW5.9 trillion (29.3%), loans reclassified above substandard KRW5.3 trillion (26.3%), and collateral sales and loan collection KRW4.0 trillion (20.1%).Corporate loans, household loans and credit card receivables classified as SBLs all fell in 2005 from a year earlier. SBL ratios fell from 1.90% to 1.31% for corporate loans, from 1.60% to 0.98% for household loans, and from 5.13% to 2.40% for credit card receivables.* Please refer to the attached PDF for details.
-
Jan 16, 2006
- Credit Card Pruchases Total KRW192.5 Trillion in 2005
- Domestic credit card purchases, excluding corporate and overseas card purchases and cash advances, totaled KRW192.5 trillion in 2005, up KRW28.0 trillion or 17.1% from a year earlier. In particular, fourth quarter credit card purchases, boosted by seasonal year-end spending, jumped 11.4% from the third-quarter total of KRW48.2 trillion to KRW53.7 trillion, the highest level since 2003.The increase in credit card purchases was led by economy-sensitive and household purchases of goods and services. Income effect from the surge in the stock market as well as improved economic outlook most likely contributed to the continued growth of credit card purchases in 2005.Credit card data also suggest that most consumers are now increasingly using credit cards primarily for purchases of goods and services, not for cash advances. Since 2003, the proportion of credit card purchases has continuously risen and reached 70.3% of the total credit card use in the third quarter of 2005.The increase in credit card purchase was fairly uniformly spread across the board with notable jumps for restaurants and large discount retailers. Of the 176 credit card merchants classified by the Credit Finance Association, 141 merchant groups saw increased credit card purchases in 2005.* Please refer to the attached PDF for details.
-
Dec 29, 2005
-
Dec 15, 2005
- Financial Supervisory Commission Appoints Standing Commissioner Lee Woo-Cheol Deputy Governor of Financial Supervisory Servic
- The Financial Supervisory Commission appointed Lee Woo-Cheol Deputy Governor of the Financial Supervisory Service effective December 9, 2005. Prior to the appointment, Mr. Lee served as the Standing Commissioner of the FSC.Mr. Lee began his career in public service in 1978 at the Ministry of Finance and Economy (formerly Ministry of Finance) after passing the government senior civil servant examination in May, 1976. At the MOFE, he primarily focused on economic and public policy issues. After completing a two-year assignment at the Presidential Secretary Office in 1989, Mr. Lee returned to the MOFE and assumed a number of key positions related to accounting, financial markets, and legal affairs.Following another two-year assignment at the Administrative Office to the Prime Minister in 1998, Mr. Lee served in a number of senior financial policy positions at the FSC. They included Director General of Planning Administration Office, Director General of Financial Supervisory Policy Bureau, and Standing Commissioner of the Securities and Futures Commission. In September, 2004, Mr. Lee was appointed Standing Commissioner of the FSC.Mr. Lee graduated from Seoul National University with a B.A. in Law in 1971. He also received an M.A. in Public Administration from Harvard University in 1983 and an M.A. in Economics from the State University of New York at Albany in 1984.* Please refer to the attached PDF for details.
-
Dec 06, 2005
-
Oct 13, 2005
- Amended Regulation on Indirect Investment Asset Management Business to Take Effect on October 7, 2005
- The FSC/FSS amended Regulation on Indirect Investment Asset Management Business and the accompanying enforcement rules on September 30. The amended regulations, which take effect October 7, are intended to strengthen prudential oversight of asset management companies (AMCs) and ease restrictions on asset management activities. The following is a summary of the amended regulations.Prudential Oversight of AMCsAmended Investment Risk Weights on Net-Asset Basis(To take effect after six months from October 7, 2005)The risk weight for mark-to-market funds for the purpose of regulatory capital is to be differentiated according to the funds’ asset holdings in order to lower capital burden on AMCs with large funds. Prior to the amendment, 0.1% was uniformly applied as risk weight to all mark-to-market funds. Below is a table of amended new risk weights to be applied to mark-to-market funds on net-asset basis.The risk weight for book -value funds is to remain unchanged at the current uniform level of 0.2%. The same risk weight is to be applied to private equity funds managed by AMCs. For AMCs with outside directors and an audit committee in place, 10% of the risk amount determined is to be additionally deducted. In determining risk amount, borrowed funds for investment purposes are to be included in the net asset amount.Amended Management Status Evaluation(To take effect after six months from October 7, 2005)For assessment of capital adequacy of AMCs, the ratio of capital impaired is to be newly added to the quantitative capital assessment criteria so that undercapitalized AMCs do not receive a quantitative rating higher than the third (fair) grade. The effective capital adequacy ratio, which had varies little among AMCs, was eliminated from the quantitative capital assessment criteria.Prompt Corrective Action for AMCsWhere an AMC subject to prompt corrective action (PCA) satisfies the mandatory soundness standards with capital restoration or other necessary measures, the b
-
Oct 04, 2005
- Consumer Credit Card Spending: January-August, 2005
- An analysis of consumer credit card spending by the FSS for the first eight months of the year showed that credit card spending−purchase of goods and services and cash advances−came to KRW184 trillion, down KRW10.7 trillion or 5.5% from KRW194.7 trillion during the same period a year earlier. Credit purchase of goods and services totaled KRW111.1 trillion, up KRW9.5 trillion or 9.3% from a year earlier, while cash advances fell KRW16.8 trillion or 19.6% to KRW68.9 trillion as credit card issuers cut back on cash services and canceled card members with poor payment history. Since the first quarter of 2004, the amount of credit card purchase of goods and services has been greater than that for cash advances.Purchase of Goods and ServicesDuring the Jan.–Aug. period, the amount of goods and services purchased totaled KRW111.1 trillion, compared with KRW101.6 trillion during the same period a year earlier. Consumer purchase of goods and services has increased for four consecutive quarters since the third quarter of 2004.In May and August, credit purchases totaled KRW14.93 trillion and KRW14.88 trillion, respectively, close to the December 2004 record of KRW14.94 trillion.Full-Payment Installment Payment PurchasesCredit purchases paid in full upon the due date have steadily increased since 2002. During the Jan.–Aug. period, purchases paid in full jumped 10.9% from a year earlier. Installment purchases, typically used for durable consumer goods and other high-price goods and services, showed a modest increase of 4.5% during the Jan.– Aug. period.Credit Purchases by Age GroupBy age group, the share of credit card purchases by consumers older than 40 years has risen steadily, while the share of purchases by consumers younger than 30 years has fallen, suggesting that the increase in credit card purchases is being led by older consumers with relatively stable and higher income.Major PurchasesFigures from 15 of the 178 merchant groups that made up approximately 56.4%
-
Sep 12, 2005
- Direct Corporate Financing Decreases in August
- Data compiled by the FSS showed that stocks and bonds issued by domestic companies in August totaled KRW3.74 trillion, marking a decrease of 30.9% from a month earlier. The decrease in direct corporate financing was due to the seasonal effect of low demand for corporate financing. Stocks and bonds issued fell 46.4% to KRW290.6 billion and 29.1% to KRW3.45 trillion from a month earlier, respectively.Equity FinancingStocks issued fell 46.4% in August due to temporary adjustments in the stock market. There were two IPOs during August totaling KRW16.8 billion, compared with 14 IPOs of KRW215.4 billion in July. The amount of seasoned equity offerings (SEOs) in August fell 16.3% from a month earlier to KRW273.8 billion.Debt FinancingCorporate BondsExcluding Asset- backed securities (ABS) and financial bonds, corporate debt issues decreased 19.8% to KRW1.40 trillion in August as interest rates in the bond market rose and the amount of maturing bonds decreased KRW618.4 billion from a month earlier. Corporate debt issued for facilities investment and rollovers increased 311.5% and 14.7%, respectively, while corporate debt for operating capital dropped35.6%.Financial BondsFinancial bonds issued in August fell 30.4% to KRW803.0 billion from KRW1,153.0 billion in July due to a rise in bond interest rates. Bonds issued by credit card companies and installment finance companies dropped 34.8% to KRW543.0 billion and 18.8% to KRW260.0 billion, respectively.Asset-Backed SecuritiesAsset-backed securities (ABS) issued by public offering totaled KRW1.24 trillion in August, down 36.6% from July but up 26.1% from the same period last year. The total ABS issuances in August came to KRW2.59 trillion, up 2.0% from July and 19.1% from the same period last year.Direct Financing by Large Companies and SMEsThe amount of debt (excluding ABS and financial bonds) and equity financing by large companies fell 26.5% to KRW1,433.1 billion and that of SMEs also fell 23.9% to KRW259.6 billion from a mon
-
Sep 06, 2005
- Equity Disclosure Filings: First Half of 2005
- An analysis of equity ownership disclosure filings during the first half of this year showed that a total of 2,413 investors held together with related parties 5% or more of the outstanding shares of 1,548 publicly-held companies—671 Stock Market (formerly KSE)-listed and 877 KOSDAQ-listed companies—as of the end of June. Five tender offers and 108 proxy solicitations were made during the period, compared with nine and 124, respectively, during the same period a year earlier.Disclosures Related to the 5% RuleThe number of disclosures filed under the 5% rule rose 2,038 or 55% to 5,718 from 3,680 a year earlier. Most of the increase resulted from investors re-filing disclosures as mandated under the amended 5% rule that took effect March 29 this year.A breakdown of the filings by investment purpose showed that, of the 2,413 investors who filed disclosures under the 5% rule, a total of 1,494 investors—1,417 domestic investors and 77 foreign investors—declared Exercising Influence on the Management as the intended investment purpose; the rest declared Investment Only as the intended investment purpose.Disclosures on Tender OffersA total of five tender offer-related disclosures were filed during the first half of the year. Of the five, four were intended for going private and the other as a defensive move against potential hostile takeover bids. All five were filed by local investors and companies. A year earlier, there were a total of nine tender offer filings, of which three were by foreign entities.Disclosures on Proxy SolicitationA total of 108 disclosures were made for proxy solicitations during the first half of the year. Of the total, 93 were for meeting the quorum requirements in the general shareholders’ meetings; the rest was for proxy contests. One of the proxy solicitation disclosures was filed by Crest Securities on behalf of Sovereign for SK Corporation’s general shareholders’ meeting.* Please refer to the attached PDF for details.
-
Jul 29, 2005
- Amended Regulation on Outsourcing by Financial Services Companies Takes Effect July 27, 2005
- The FSC/FSS announced on July 26 that the newly amended Regulation on Business Delegation of Financial Institutions took effect July 27, 2005. The newly amended regulation is a major deregulatory step that significantly broadens the range of activities that can be outsourced by financial services companies and help them utilize outsourcing more efficiently. One of the key changes to be implemented under the amended regulation is a shift from a positive regulatory regime that provides for activities financial services companies may outsource to a negative regulatory regime that provides for activities financial services companies may not outsource. Thus, as a general rule, financial services companies will be allowed to outsource activities unless the regulation specifically provides otherwise. The following is a summary of the newly amended regulation on outsourcing.Expanded outsourcing by financial services companies• Adoption of negative regulatory regime for outsourcingAs a rule, outsourcing is to be allowed for financial services companies unless the activity to be outsourced (i) constitutes a part of the core business activities of the financial service company; (ii) is mandated under the law to the financial service company, or (iii) poses risk to the soundness of the financial services company, undermines orderly conduct of their business, or causes consumer harm. In addition, the core business activities of financial services companies are specifically provided for so that non-core activities may be outsourced without undue discretionary intrusion from the regulators.• Back-office support activitiesThe amended regulation newly defines outsourcing as utilizing the services or the facility of a third party in order to perform financial services activities approved by the FSC/FSS and provides that outsourcing encompasses the back-office and other support activities of financial services companies. As a general rule, outsourcing is to be allowed for back-off
