Press Releases - Financial Services Commission

Press Releases

Period: start
~
end

1month 3month Reset

Requirement

Oct 28, 2022

Authorities Hold Meeting to Review Credit Supply to Lower Income Groups by Credit Businesses

The FSC and the FSS held a monitoring meeting with the Consumer Loan Finance Association on October 28 to check the situation of credit business sector with a focus on lower income groups. Financial authorities reviewed the current status of credit supply to lower income groups by credit businesses, checked borrowing conditions of credit businesses and listened to opinions raised by the Consumer Loan Finance Association. At the meeting, financial authorities and the association shared a common recognition that if credit supplies from credit businesses shrink significantly under the current economic conditions, lower income groups will face more difficulties. In this regard, financial authorities demonstrated a desire to actively communicate with the credit business sector. Authorities also encouraged credit businesses to fulfill their role and duty as a pillar of lower income finance by ensuring credit supply for lower income groups. * Please refer to the attached PDF for details.
Attachment 1
Oct 28, 2022

Authorities Hold Meeting to Review Asset Management Conditions of Insurance Sector

The FSC and the FSS had a meeting with non-life insurance companies hosted by the Korea Insurance Research Institute on October 28 to share recent issues in the insurance sector and check current market situations. Authorities reviewed the liquidity condition of insurers and their management over payment capacity amid recently increased uncertainty in financial markets. Authorities and participants discussed the role of insurers as major institutional investors to help stabilize the current market situation. At the meeting, financial authorities decided to pursue measures in response to recently increased volatility and uncertainty in money market. In this regard, authorities will allow more asset types to be recognized as liquid assets when applying the liquidity ratio regulation. Accordingly, the definition of liquid assets, which referred to assets with maturity of three months or less before, will be broadened to include instantly cashable assets such as debt securities with maturities of three months or more which are tradable in tight markets. In addition, despite current difficulties in their asset management conditions, financial authorities encouraged insurers to more actively contribute to market stabilization efforts as institutional investors, since their soundness indicators are expected to improve with the introduction of a new capital adequacy framework (K-ICS or Korean Insurance Capital Standard)next year. On November 3, authorities plan to hold a market monitoring meeting with life insurers. Authorities will continue to keep up with changes in financial markets carefully and carry out market stabilization measures promptly when needed. * Please refer to the attached PDF for details.
Attachment 1
Oct 27, 2022

FSC Proposess Revision of Supervisory Regulation on Savings Banks to Improve Soundness Management

The FSC proposed a revision to the regulations on supervision of mutual savings banks in order to improve management of their financial soundness. The key changes will require savings banks to: (a) set aside additional loan loss reserves for borrowers who have debt accounts with multiple lending institutions; (b) calculate their credit extension limits for real estate-related business category, which is regulated for asset quality control, based on de facto borrowers who have a duty to repay principal; and (c) exclude credit extension to nonoperational business branches (e.g., SPC branches) from the calculation of total credit extension within their operating localities. Background Savings banks have grown steadily since a major industry-wide restructuring in 2014, with total assets and net profits increasing year after year. So far, their financial indicators have been stable. However, as savings banks increasingly deal with vulnerable borrowersdebtors with multiple debt accountsthere is a growing need to strengthen savings banks financial soundness management in preparation for future external shocks such as further interest rate hikes or a drop in housing prices. In order to preventively manage mutual savings banks' financial soundness, authorities prepared the revision proposal below for the supervisory regulation of those institutions. Key Revision Details a) Additional loan loss provisions will be required for borrowers with multiple debt accounts. Most savings banks are currently maintaining higher-than-required loan loss provisions in accordance with the asset soundness categories established by supervisory regulation. However, unlike other financial sectors such as mutual finance and credit card companies, there is no rule requiring savings banks to set aside additional loan loss provisions to cover losses from borrowers with multiple debt accounts. As a result, the supervisory regulation will be amended to require savings banks to establish additional loan
Attachment 1
Oct 27, 2022

FSC to Bolster Financial Support Programs to Actively Assist Revitalization of Economy

The 11th emergency meeting to stabilize peoples livelihoods was held on October 27 chaired by President Yoon Suk Yeol. At this meeting, relevant ministers and vice ministers discussed the governments programs to revitalize the economy. The FSC announced plans to bolster various financial support measures. The plans aim to (a) ease regulations in housing finance to sustain the soundness of the construction sector, (b) provide liquidity to stabilize operating conditions of SMEs and (c) relieve interest rate burden for households. Key Details of Financial Support Measures Announced a) (Easing Regulations in Housing Finance) Authorities will ease excessive LTV (loan-to-value) regulations by raising LTV ratio ceiling in regulated areas for no-home or one-home owners from 20-50 percent to 50 percent and allowing no-home or one-home owners to be eligible for home mortgage loans on apartments worth more than KRW1.5 billion. b) (Supporting Liquidity Provision for SMEs) Authorities will prepare KRW50 trillion worth of financial support package to alleviate interest rate burden on SMEs and startups and to provide sufficient financing for their future growth. c) (Reducing Interest Burden for Households) Authorities will relax the eligibility requirement for Relief Conversion Loan and encourage banks to voluntarily expand the scope of debtors eligible for their own debt adjustment programs. One-home owners whose house price is KRW600 million or less and annual income is KRW100 million or less can apply for Relief Conversion Loan from November 7. Maximum loan amount available will be increased from KRW250 million to KRW360 million. For banks debt adjustment programs, banks have offered these programs only to mortgage holders who lost jobs, closed businesses or got sick. Now, banks will additionally make mortgage holders undergoing difficulties in making paymentswhich became burdensome amid interest rate hikeseligible for these programs. * Please refer to the attached PDF for deta
Attachment 1
Oct 27, 2022

Regulation on Loan-to-Deposit Ratio to be Temporarily Eased to Facilitate Corporate Financing

The FSC announced that financial authorities will temporarily ease the regulation on loan-to-deposit ratio, which will enable banks and savings banks to provide sufficient liquidity to businesses. The demand for business loans increased as a result of the recent contraction of the corporate bond market.However, the current regulation on loan-to-deposit ratiohas prevented banks from responding actively to these demands for borrowing. To facilitate active response, loan-to-deposit ratio is chosen as a first step of temporary regulatory easing because it is only domestically regulated and swiftly adjustable. Authorities will continue to monitor financial market situations and consider whether other deregulatory steps on such indexes like LCR (liquidity coverage ratio), NSFR (net stable funding ratio) should be taken. Details of Temporary Regulatory Easing To help banks and savings banks to more effectively respond to corporate loan requests, the loan-to-deposit ratio requirements will be eased from 100 percent for both to 105 percent for banks and 110 percent for savings banks. The eased loan-to-deposit ratio requirements will be applied for upcoming six months first, and authorities will take into account extending the period after reviewing market situation. With this easing of loan-to-deposit ratio requirements, banks and savings banks will have additional capacity to lend more to businesses. Furthermore, competition for deposit-taking is alleviated, and thus reduced borrowing costs will help in part to contain upward pressure on interest rates of corporate loans. Further Plan Financial authorities will issue a no-action letter in October to allow temporary easing of loan-to-deposit ratio rules immediately. Changing the calculation method will also take effect immediately with a no-action letter in October, but authorities will revise the supervisory regulation on banking business afterward to make the change officially. Authorities will maintain close communication
Attachment 1
Oct 26, 2022

Authorities Hold Market Monitoring Meeting to Check Market Stabilization Efforts of Banks

The FSC and the FSS had a meeting with five major banks on October 26 to check the progress of the banking sectors efforts to stabilize current financial market situation after last weeks decision to postpone gradual normalization of banks LCR (liquidity coverage ratio) requirement by six months. At the meeting, officials from the banking sector said that banks now have more capacity for lendingwith the help of the postponement in gradual normalization of their LCR requirementand pledged to strengthen efforts to stabilize markets. In particular, banks said that they will purchase CPs (commercial papers), ABCPs (asset-backed commercial papers) and electronic short-term bonds to stabilize money market and bond market. Meanwhile, banks showed their commitment to quickly respond to capital calls from the bond market stabilization fund and minimize issuance of bank bonds. In addition, banks expressed their willingness to maintain financing support for the corporate sector through the purchase of special bank bonds including bonds issued by the Korea Development Bank (KDB), the supply of corporate loans and the extension of credit line. Financial authorities encouraged the banking sector to prop up and stabilize financial markets. Authorities also promised to step up communication with banks and keep close tabs on financial market situations. * Please refer to the attached PDF for details.
Attachment 1
Oct 26, 2022

Liquidity Support Programs Made Available for Securities Firms

The FSC held a meeting with securities firms on October 26 to explain the implementation plan of market stabilization measures, which was announced at the government-wide emergency meeting on macroeconomic and financial stability held on October 23. The meeting also checked the liquidity conditions of securities firms and money market. Authorities announced that liquidity support programs will be available for securities firms as part of the market stabilization measures announced at the earlier emergency meeting. The Korea Securities Finance Corporation (KSFC) begins providing KRW3 trillion-plus of liquidity support for securities firms from today. The Korea Development Bank (KDB) will begin to purchase KRW2 trillion-plus worth of CPs (commercial papers) issued by securities firms from October 27. With these programs in place, authorities expect that securities firms undergoing temporary liquidity shortages will be able to secure liquidity, depending on their situations. Key Details of Liquidity Support Programs a) Korea Securities Finance Corporation The Korea Securities Finance Corporation (KSFC) begins to provide KRW3 trillion of liquidity support for small and medium-sized securities firms through repurchase agreements (repos) and stock-secured loans from October 26. In particular, since the coverage of collateralizable securities for repos and loans is further expanded, securities firms will be able to make better use of this liquidity support program. b) Korea Development Bank The Korea Development Bank (KDB) begins to operate the corporate bond and CP purchase program worth KRW10 trillion. The KDB injects KRW2 trillion first to purchase CPs issued by securities firms from October 27. However, as this program exceptionally purchases financial companies CPs only during this time, the liquidity support will be provided to them with a condition of restructuring efforts. c) Efforts Aimed for Normalization of Money Markets by Securities Industry Along with the ope
Attachment 1
Oct 24, 2022

Financial Authorities Hold Meeting to Respond to Bond and Money Market Situation

FSC Chairman Kim Joo-hyun presided over a meeting of senior FSC officials on October 23 right after the government-wide emergency meeting on macroeconomic and financial stability took place. At this meeting, Chairman Kim ordered authorities to promptly take follow-up actions to implement the support measures announced at the earlier emergency meeting. After the senior official meeting, FSC Standing Commissioner Kwon Dae-young held another meeting with the Financial Supervisory Service (FSS), financial industry groups, policy financial institutions and commercial financial institutions to check the recent situation of bond and money market and related risk factors in financial institutions. At the meeting, financial authorities explained that they will immediately activate the KRW50 trillion-plus liquidity of supportive measures announced at the government-wide emergency meeting. Authorities emphasized that the government, aiming to ensure market stability, will provide ample support by all means necessary. In addition, as restoration of market mechanisms is the key to overcome the current problematic situation, authorities said, market participants such as financial institutions and institutional investors also should step up their own efforts to facilitate recovery of the role of financial markets as intermediaries and accordingly to ensure a virtuous cycle. Moreover, authorities underscored the need for concerted efforts of both the government and the private sector. Application of all available means at their disposal and close communication between them should be in harmony to ensure market stability as the government alone has limited financial resources. Financial industry groups, in response to authorities request, also showed their commitment to strengthen efforts to stabilize financial markets and actively cooperate with the governments measures. * Please refer to the attached PDF for details.
Attachment 1
Oct 21, 2022

FSC Decides 6-Month Postponement in Rolling Back Regulatory LCR for Banks

The FSC held a meeting with the Financial Supervisory Service (FSS) and five major bankson October 20 to review financial market situation with a focus on the banking sectors capital raising and management and the atmosphere of financial markets including money market. At the meeting, financial authorities and participants from five major banks shared the recent view that volatility and uncertainty have expanded in money market. In order to actively respond to this situation, financial authorities decided to slow down the pace to reverse eased regulations during the pandemic. Following this, the date of regulatory rollback on banks LCR (liquidity coverage ratio) requirement will be postponed for six months. Moreover, financial authorities encouraged banks to step up efforts in helping to stabilize the corporate bond and CP (commercial paper) markets. * Under the current regulatory rollback plan, banks are allowed to maintain regulatory LCR of 92.5% until the end of December 2022. But a six-month postponement would allow them to maintain LCR requirement of 92.5% until the end of June 2023. Financial authorities will strengthen monitoring of financial markets in the future and seek timely implementation of necessary measures. * Please refer to the attached PDF for details.
Attachment 1
Oct 20, 2022

Scope of Data Categories for Financial MyData Service to be Expanded

The FSC announced a plan to expand available data on financial MyData service from the end of this year. The number of personal data categories will grow significantly from 492 to 720, which can cover most financial sectors including banks, insurers, card companies, financial investment firms and public financial institutions. A demand survey on MyData service providers in March 2022, which was conducted right after the launch of financial MyData service in last January, revealed additional data categories that need to be added. To insert these categories into MyData ecosystem, many data providers like financial industry groups, financial institutions and MyData service providers voluntarily organized MyData taskforce to discuss mutual development and cooperation. Between April and August this year, the taskforce held over 40 meetings and reached an expansion plan. MyData portal (www.mydatacenter.or.kr) will provide information on new service offerings and service improvement of MyData service providers, enabled by this expansion of data categories available. Achievement So Far (Penetration of MyData Service) Since the launch of financial MyData service on January 5 this year, financial MyData service has grown rapidly. The cumulative number of subscribers grew to about 54.8 million (in September 2022), increased about 3.9 times from about 14 million users in January. The volume of API (Application Programming Interface) transfers per day went up from 274 million at the end of January to about 384 million at the end of September. The number of MyData service providers also increased from 33 to 52 for now. (Enhanced Consumer Convenience) Financial MyData service made data ecosystem more consumer-oriented where financial consumers can quickly and conveniently access a variety of their personal data scattered around financial sphere with a single sign-on. As data sharing practice changes from indiscriminate data scraping to formal data transfer under consumer acknowled
Attachment 1
Oct 20, 2022

FSC Chairman Orders Short-term Money Market Stabilization Measures

Financial authorities observe money market with careful attention to the recent increase in its volatility. In particular, authorities are closely watching instigating factors that contribute to market anxieties in the aftermath of the PF-ABCPincident in Gangwon-do, where the provincial government promised debt guarantee. In this regard, aiming to prevent those anxieties from spreading across financial markets, FSC Chairman Kim Joo-hyun urged authorities to strengthen market response efforts in need. To this end, authorities will make the bond market stabilization fund restart the purchase of corporate bonds and CPs (commercial papers) with KRW1.6 trillion of residual amount in it and prepare for making additional capital calls immediately. Authorities are also monitoring securities firms and specialized credit finance companies with a focus on their liquidity availability, and plan to actively provide liquidity support through the Korea Securities Finance Corporation. In addition, authorities would ease some liquidity requirement for financial institutions in such a way to postpone the normalization of banks regulatory LCR (liquidity coverage ratio). Along this line, if needed, authorities will promptly prepare and announce a financial support program to avoid the spread of fear related to the real estate development project financing market. * Please refer to the attached PDF for details.
Attachment 1
Oct 13, 2022

Household Loans, September 2022

In September 2022, the outstanding balance of household loansacross all financial sectors fell KRW1.3 trillion (m-o-m). It edged back lower again from the increased one of last month and sustains a stable level overall.Financial authorities will manage to keep the growth rate of household debt stable while making continuous efforts to alleviate financial burdens of low income households and non-speculative homebuyers. (Overall) Household loans across all financial sectors declined KRW1.3 trillion last month. The growth (y-o-y) was 0.6 percent which continued to slow since the second half of 2021. (By Type) Mortgage loans increased at a slower rate than the previous month and other types of loans fell at a faster rate, leading to an overall drop in household loans. - (Mortgage Loans) Mortgage loans rose KRW2.0 trillion in September, growing at a slower rate compared to the previous month (up KRW2.7 trillion), as group lending for new apartment subscription fell from KRW1.2 trillion to KRW0.5 trillion. - (Other Types of Loans) Other types of loans fell KRW3.3 trillion, declining significantly from the previous month (down KRW1.8 trillion), due to a drop in credit loans. (By Sector) Household loans edged back down in both the banking and nonbanking sectors. - (Banking Sector) Banks saw a drop of KRW1.2 trillion in household loans. Mortgage loans from banks grew KRW0.9 trillion,rising at a slower rate than the previous month (up KRW1.6 trillion), as jeonse loans and group lending for new apartment subscription went up KRW0.6 trillion and KRW0.5 trillion, respectively. Other types of loans from banks fell KRW2.1 trillion, declining at a faster rate than the previous month (down KRW1.3 trillion), as credit loans dropped KRW1.8 trillion. - (Nonbanking Sector) In September, nonbanks saw a drop of KRW0.1 trillion in household loans with increases in insurance companies (up KRW0.6 trillion) and savings banks (up KRW0.2 trillion) and declines in mutual finance (down KRW0.5 tri
Attachment 1
Oct 12, 2022

FSC and FSS Hold Joint Market Monitoring Meeting

The FSC held a market monitoring meeting jointly with the Financial Supervisory Service (FSS) on October 12, reviewed the impact of the Bank of Koreas recent interest rate hike (+50 bp) on financial markets and financial institutions, and discussed response strategies to mitigate risk. To ease volatility in stock markets, financial authorities agreed to ensure a timely reactivation of the stock market stabilization fund by promptly carrying out additional purchase agreements with institutional investors. While continuously watching market situations, authorities will spare no effort to prepare for a timely implementation of additional market stabilization measures in need. In addition, authorities shared the same view that institutional investors need to play a responsible role based on a mid- and long-term perspective to prevent the spread of anxiety in financial markets. Authorities also promised to make efforts to alleviate corporate financial difficulties amid interest rate hikes and to prevent an abrupt one-side movement of market interest rates. To this end, authorities plan to carry out the following. a) Strengthen support for businesses with low credit by expanding the corporate bond and CP (commercial paper) purchase capacity of policy financial institutions from current KRW6 trillion to KRW8 trillion. b) Actively respond to the recent vulnerabilities in bond markets such as real estate project financing and ABCP (asset-backed commercial paper) and bolster efforts to prevent liquidity crunch of healthy businesses. c) Take necessary steps depending on market situations to activate a backstop to reduce volatility in market interest rates. For example, restart purchase of corporate bonds and commercial papers with KRW1.6 trillion residual amount of the bond market stabilization fund. d) Actively prepare a liquidity injection mechanism to stabilize financial markets in close coordination with relevant institutions. Authorities also committed to reduce burdens o
Attachment 1
Oct 07, 2022

FSC to Overhaul Accounting Regs to Ease Burden on SMEs while Ensuring Accounting Transparency

The FSC prepared measures to overhaul the accounting regulations to make them more SME-friendly and to support SMEs better comply with the accounting and external audit regulations. The key measures include (a) exempting small-sized listed firms (less than KRW100 billion in asset) from external audit requirement for their internal accounting control systems, (b) launching and operating an accounting support center for SMEs at the Korea Exchange (KRX), (c) reducing the scope of large unlisted firms that are subject to the same accounting regulations in place for listed firms and (d) applying a simplified auditing standard for non-listed small firms. In line with the regulatory improvements, the FSC will also strengthen the responsibility of executive officers over internal control of accounting practices and raise incentives for whistleblowing on accounting frauds within a company. For this, disclosure on the internal accounting control system will be improved substantially and the reward amount for whistleblowers will be increased significantly (by three times). Background The accounting and external auditing regulations in Korea have been designed and developed with the focus on large listed companieswhere the need for investor protection is high. SMEs have been subject to similar accounting and external auditing regulations with the large companies despite their smaller scale in terms of the size of interested parties like investors. This has resulted in relatively higher compliance burden on SMEs. As such, it has been pointed out that there is more cost than benefit in applying the same accounting regulations to SMEs. Moreover, it should be taken into account that the accounting reform of 2018 imposes financial burdens more on SMEs which usually have relatively lower profitability. The government has listened to headaches of SMEs, discussed with experts and interested parties and reached the following proposals. An in-depth discussion followed at the 3rd financia
Attachment 1
Oct 05, 2022

New Start Fund Launched on October 4 to Support Rebound of Micro-enterprises and Self-employed

The FSC announced that New Start Fund, a bespoke debt adjustment program to help pandemic-hit micro-enterprises and self-employed business owners was launched on October 4. At the launching event, 19 financial industry groups and financial institutions signed a memorandum of understanding (MOU) for New Start Fund. From October 4, application for New Start Fund became available at 76 on-site nationwide locations and New Start Fund website. The MOU has been prepared after a series of consultation and communication between New Start Fund, Credit Counseling and Recovery Service (CCRS) and financial industry groups and institutions. It contains details about New Start Fund like eligibility, details of support, method of debt adjustment and its process, debt purchasing price, etc. Each financial industry group participating in the MOU signing event is currently at the final stage of collecting agreements from about 3,730 financial institutions expected to sign up for the partnership. FSC Chairman Kim Joo-hyun attended the New Start Fund launching event and thanked everyone who has contributed to the preparation. While stating that New Start Fund will help support the recovery of micro-enterprises and the self-employed and prevent social, economic and financial anxieties about insolvency risks, Chairman Kim urged authorities to ensure seamless operation of this new debt adjustment program. The pandemic-hit self-employed and micro-enterprises wishing to apply for debt adjustment can apply for New Start Fund by visiting one of the 76 on-site locationsfrom 9:00 am, October 4. Application is also available through an online platform. * Please refer to the attached PDF for details.
Attachment 1
Oct 05, 2022

Relief Conversion Loan Available for Mortgagors Owning Houses Worth KRW400 Million or Less

The FSC announced that mortgage holders owning only one house which is worth KRW400 million or less can apply for Relief Conversion Loan from Thursday, October 6 (The application period already started on September 15 for mortgage holders owning house worth KRW300 million or less). This preferential Relief Conversion Loan program which covers KRW25 trillion in total loan amount offers eligible mortgage holders to refinance their adjustable-rate or mixed-rate mortgages to those with long-term maturity, fixed interest rate and monthly principal payments. Application for Relief Conversion Loans will be accepted from October 6 to 17.Exact date will be allocated like the table below according to the last digit of birth year on applicants resident registration number (RRN). Depending on the type of the institution an applicant borrowed from, the institution receiving the application differs. When an original lender is Kookmin, Shinhan, Nonghyup, Woori, Hana Banks or Industrial Bank of Korea, the applicant should submit to the original lender. However, when an original issuing institution is other bank or nonbank financial institution, the application should be submitted to Korea Housing Finance Corporation. Applicants need to keep in mind the following factors before application. a) Check the type of benchmark rateyour mortgage uses and its adjustment periodas well as trends in benchmark rates to understand when your interest rate will be adjusted next and how much your benchmark rate will be increased during the interval. b) Decision to apply for Relief Conversion Loan should be made after comparing the expected interest rate of the forthcoming adjustment datenot your current interest ratewith the interest rate of Relief Conversion Loan. c) If interest rates fall in the future and then a borrower wishes to switch Relief Conversion Loan to another mortgage loan that offers a lower interest rate, a refinancing is possible without burden of an early termination fee. If the
Attachment 1
Sep 30, 2022

Measures to Soft Land Loan Maturity Extension and Payments Deferment for Self-employed and SMEs

The government and financial institutions decided to provide loan maturity extension for up to three more years and payments deferment for up to one more year for the borrowers currently using these programs.While providing sufficient time for the self-employed and SMEs to recover their repayment capabilities, authorities will ensure thorough protections for those who are unable to recover on their own with New Start Fund for the self-employed and a debt adjustment program for SMEs. During the extended period, loan forbearance programs will allow businesses to draw up their repayment plans tailored for individual situations in consultation with financial institutions. This will help ease the concern about financial institutions financial soundness and support soft landings for both borrowers and financial institutions. Overview Since April 2020, the financial authorities and financial institutions have made available loan maturity extension and principal or interest payments deferment for SMEs and small merchants experiencing temporary liquidity shortage from COVID-19. As businesses continued to incur damages from COVID-19, the maturity extension and payments deferment program has been extended six-month each for four times over the past two and a half years. Financial institutions have provided forbearance support for KRW362.4 trillion loan through this program till June 2022. As of the end of June 2022, 570,000 borrowers and KRW141 trillion loans are still under this support. Evaluation on Current Situation After COVID-19 business restrictions were completely lifted on April 18, business conditions for the self-employed and SMEs are gradually returning to normal. However, deterioration in economic and financial conditions such as rising interest rates, high price level and falling currency value delays a full recovery. Amid slow business recovery, there is a concern that the self-employed and SMEs may default on their debts if the loan maturity extension and payme
Attachment 1
Sep 29, 2022

Financial Measures to Stamp Out Vishing Scams

The FSC introduced financial measures to stamp out vishing scams. The measures include the suspension of payment from the account exploited for fraud and the suspension of money transfer from accounts for first three days since joining open banking made through non-face-to-face process. Background In 2021, there were 30,900 cases of vishing scams. As the amount of monetary damages incurred to victims rose to about KRW774.4 billion,vishing scams pose a serious threat to the society. Since December 2021, the Office for Government Policy Coordination, the Prime Ministers Secretariat organized and has operated a government-wide joint taskforce to draw up government-wide policy responses to vishing scams and to pursue intensive crackdowns and investigations led by the National Police Agency and a special joint investigation team. After consultation with the ruling party and multi-ministry taskforce meetings, the government prepared a package of detailed response measures tailored for the telecommunications and financial sectors. The following are financial sector measures. Key Details of Financial Sector Measures I. Suspend Payment from an Account Exploited for Face-to-face Vishing Scams a) Revise some provision of the Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund for Loss (the Special Act hereinafter) to enable investigative authorities to immediately request suspension of payment from an account exploited for face-to-face vishing scam to financial institutions as soon as they make an arrest on the spot. II. Lower the Maximum Cash Deposit through ATMs without Card or Bankbook a) Lower the upper limit of cash deposit at ATMs (automatic teller machines) requiring no card or bankbookto KRW500,000 per transaction from the current level of KRW1 million per transaction. This is to prevent transfers of fraudulently obtained cash through cash deposit at ATMs. b) Limit the maximum daily amount withdrawable from the unlimited
Attachment 1
Sep 28, 2022

2022 Korea Fintech Week Opens

The 4th annual global fintech expo, 2022 Korea Fintech Week will be held for three days from September 28 to 30 for both on-site (Lotte Hotel Seoul) and online viewing. Fintech businesses and experts from at home and abroad participate. Welcoming Remarks by FSC Chairman FSC Chairman Kim Joo-hyun delivered welcoming remarks at the opening ceremony. He spoke about the economic, financial and regulatory environment surrounding the fintech ecosystem and the governments policy direction to promote fintech. The following is a summary of Chairman Kims remarks. Koreas fintech industry expanded its size significantly in terms of the number of businesses in operation. However, recent global fintech rankings show Koreas ranking dropped from 18th in 2019 to 26th in 2020. And currently, fintech firms are facing challenges from expanding platform-based big tech companies and financial institutions which accelerate digitalization. Fintech firms also experience difficulties in attracting investments amid tightening monetary policies around the world. Besides, there are continuing concerns about inflexible regulations in the financial sector. In response to rapidly changing conditions surrounding the fintech industry, the government will act in a more agile manner to support fintech businesses in four aspects. First, the government will improve the financial regulatory sandbox program to promote commercialization of fintech services in order to make fintech startups to utilize this program more actively. Second, the government will examine and strengthen the financial support infrastructure to facilitate investment and funding on fintech firms. Third, the government will work to expand regulatory flexibility for artificial intelligence (AI)-based services and the rules on cloud computing use and network separation. Fourth, through a fundamental reexamination of current regulations, the government will actively pursue digital regulatory reforms throughout the whole financial industry
Attachment 1
Sep 28, 2022

Measures to Strengthen Capacity to Respond to Unfair Trade Practices in Capital Markets

The FSC proposed new measures to improve the effectiveness of penalties on unfair trade practices in capital markets. The measures include (a) a ban on new transaction and account opening for investment products and (b) disbarment from serving as a board member of listed companies up to 10 years. These measures will help prevent flagrant and repeated unfair trade practices and establish a sound capital market order. Authorities will propose a revision bill of the Financial Investment Services and Capital Markets Act (FSCMA) and propel its passage at the National Assembly. In addition, the FSC will make efforts to pass another FSCMA revision bill to provide calculating method for unfair profits acquired by unlawful trades and to introduce penalty surcharges. Background In capital markets, unfair trade practices increasingly take diverse and complex forms. However, the measures to punish, block and prevent them remain somewhat ineffective. In particular, unfair trades on material nonpublic information by board members of listed companies (who in fact should have a high degree of integrity) happen frequently and recidivism by those who previously committed unfair trades proliferates. The majority of ordinary investors suffer financial losses and trust in our capital markets is damaged. In May 2022, the new administration announced improving the effectiveness of penalties on unfair trade practices as one of 120 national policy tasks to restore fairness and trust in capital markets. Then, the government has prepared detailed plans through policy seminars and expert meetings. Current Situation and Problems (Overview of Unfair Trade Practice Cases) In recent five years (2017-2021), the number of unfair trade practice cases handled by the Securities and Futures Commission (SFC) was 274 in total, which translates into 54.8 cases annually. In terms of violation type, use of material nonpublic information was most prevalent (43.4%), followed by unfair trading (29.6%), market p
Attachment 1