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Aug 16, 2021
- Authorities Provide Consulting to VASPs and Advise Supplementary Actions Prior to Registration
- As a follow-up to the governments plan to enhance supervision on virtual asset service providers (VASPs) and their transaction activities,the FSC and relevant institutions provided on-site consulting to the 25 VASPs between June 15 and July 16 and advised them to take supplementary measures prior to their business registration. Out of the 33 VASPs that have already obtained the ISMS certification or are in the pending status, a total of 25 entities showed interest in receiving consulting from the authorities.As such, the FSC along with other relevant institutions provided on-site consulting to the 25 VASPs to review their preparation for business registration and check the level of stability in their transactions system. Key Details (Preparation for Registration) Pursuant to the Act on Reporting and Using Specified Financial Transaction Information (the Act hereinafter), VASPs should file necessary documents for registration until September 24 and adhere to AML duties from the time of their registration. As such, VASPs should have their own internal procedures, human resources and facilities ready to implement the AML requirements at the time of registration. When consulting was provided, no VASPs were found to have met all the registration requirements, and they have shown inadequate levels of preparedness for the implementation of the AML duties and other requirements set forth by the Act. Out of the 25 VASPs, 19 entities have obtained ISMS certification, but only four VASPs were found to have their business operation with real-name verified accounts. The VASPs that have obtained ISMS certification but have no real-name accounts may still apply for business registration but for the category that is barred from offering exchange services between virtual assets and a fiat currency. With regard to the level of preparedness in adhering to the AML requirements, the lack of employees overseeing this matter and insufficient system preparation for suspicious transactions
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Aug 11, 2021
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Aug 11, 2021
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Aug 10, 2021
- FSC Chairman Discusses Balance between COVID-19 Support and Preemptive Risk Management
- FSC Chairman Eun Sung-soo met with the heads of five financial holding groups on August 10 and held talks on creating quality jobs for young adults in financial sectors, managing household debt levels and maintaining COVID-19 financial support. (Creating Job Opportunities for Young Adults) Chairman Eun stated that a rapid transition to a digital economy may lead to diminishing job opportunities for young adults. However, the growth of fintechs is contributing to the creation of new jobs. As such, financial institutions should work to create quality jobs that are desirable for young adults, especially with this years joint job fair in financial sectors scheduled to be held in next month. (Household Debt Management) In the process of responding to the COVID-19 pandemic, a growth in private sector debt level has been unavoidable. In this regard, it is time to focus on risk management as the pace of the growth has been accelerating. In order to control the pace of growth at an appropriate level (5 to 6% for this year), the financial authorities are working on strengthening supervision. As such, financial institutions should work on preemptive management to help prevent excessive debt levels turning into potential risks for the economy and financial sectors. (COVID-19 Financial Support) Over the past year, financial institutions made available KRW204 trillionworth of financial support for SMEs and small merchants in the form of maturity extensions and payment deferrals. The authorities are closely looking at the upside and downside effects of extending these support programs and making them available for longer. In the process, the authorities will maintain close communication with financial sectors. * Please refer to the attached PDF for details.
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Aug 04, 2021
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Aug 03, 2021
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Jul 29, 2021
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Jul 28, 2021
- Open Banking Service Availability to be Expanded
- With 23 open banking participating fintechs making available their data about customers prepaid deposit balances for open banking, open banking users will be able to access information about their prepaid deposit accounts from mobile applications of major banks or any other open banking offering financial institutions beginning from July 30, 2021. Open banking has expanded rapidly since its first launch in December 2019 as the cumulative number of subscribers reaching more than 89.7 million with about 166.8 million accounts registered as of July 25, 2021. The FSC has worked on gradually expanding the availability of open banking services from more types of financial institutions. As a result, open banking services are now available from about 110 banks, fintechs, mutual finance firms, savings banks, securities firms, credit card companies and the Korea Post. Along with the account balance inquiry and wire transfer functions as well as checking monthly statements for credit cards that have been already in service, users can now access information about their prepaid deposit accounts from any mobile application of their choosing. The authorities will continue to work for advancement of open banking and seek ways to promote the development of an open finance platform, while continuing to work on ensuring system security. * Please refer to the attached PDF for details.
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Jul 28, 2021
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Jul 22, 2021
- FSC Selects Eight More 'Innovative Financial Services' for Financial Regulatory Sandbox
- The FSC decided to designate eight more financial solutions as innovative financial services at its regular meeting held on July 21. This brings the total number of designated services to 153 since the regulatory sandbox program was first launched on April 1, 2019. Overview of Newly Added Innovative Financial Services 1. A real-name identification and verification service using facial recognition technologies which allows consumers to visit bank branches and use financial services without presenting their ID cards (Daegu Bank, expected in Apr. 2022) 2. A real-name identification and verification service using facial recognition technologies for checking customers personal identification in contactless settings, which will allow customers to open up bank accounts even after the banks regular work hours (Busan Bank, expected in Oct. 2021) 3~5. Online-based telemarketing insurance subscription services using mobile devices that reduce the hassle of reading and recording scripts for insurance telemarketers while still guaranteeing supplemental measures for consumer protection (Toss Insurance, DB Insurance and NongHyup Life Insurance, expected in Oct. 2021, Feb. 2022 and Mar. 2022, respectively) 6~7. QR code enabled credit card payment services which require no physical point-of-service (POS) terminal for businesses to process credit card payments which will help improve convenience for consumers while allowing more small-scale businesses to adopt mobile simply payment methods (Seeroo Information and Paycoq, both expected in H1 2022) 8. A non-recourse accounts receivable factoring service which assumes the risk of buyers failure to honor payment obligations in place of the seller, thereby helping firms with new technologies to raise funds and carry out business operations in a more stable manner (Korea Technology Finance Corporation, expected in Jun. 2022) * Please refer to the attached PDF for details.
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Jul 22, 2021
- KoFIU Notifies Foreign VASPs of Their Obligation to Register
- With the Act on Reporting and Using Specified Financial Transaction Information (hereinafter the Act) going into effect from March 25, 2021, all VASPs are required to register their business with the KoFIU by September 24, 2021. As such, the KoFIU has sent out a notice to 27 foreign VASPs about their obligation to register. Obligations of Foreign VASPs The Act requires VASPs to register with the KoFIU as the law equally applies to foreign VASPs that conduct activities outside Korea but have domestic consequences within Korea. Thus, if any VASPs conduct business operation targeting Koreans, they are required to register with the KoFIU and comply with requirements under the Act regarding their business operations targeting Koreans. Notice to Foreign VASPs The KoFIU has sent out a notice signed by the Commissioner of the KoFIU to 27 foreign VASPs that have business operations targeting Koreansabout their requirement under the Act to register with the KoFIU by September 24, 2021. If foreign VASPs fail to register with the KoFIU, they shall cease their business operation targeting Koreans from September 25, 2021. They are notified of the possibility of being subject to penalties as prescribed by the Act if they continue to operate without registration. Foreign VASPs that have not received any notice from the KoFIU but have business operation targeting Koreans are also required to register with the KoFIU or suspend their business operation targeting Koreans from September 25, 2021. If they continue to operate business without registration, they will be subject to up to five years of imprisonment or a maximum fine of KRW50 million as prescribed by the Act. Future Plan For foreign VASPs that continue to operate without registration beyond the September 24 deadline, the KoFIU will notify them of their illegal activities and take actions such as blocking access to their websites to inhibit their illegal business operations. The KoFIU will also bring charges against unregister
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Jul 15, 2021
- Vice Chairman Holds 1st Taskforce Meeting on Household Debt Management
- The FSC held the 1st taskforce meeting on household debt management chaired by Vice Chairman Doh Kyu-sang on July 15 and discussed household debt management measures for the second half of this year. The following is a summary of Vice Chairman Dohs remarks. (Key Policy Direction) For the past year and a half, the Korean economy has faced an unprecedented level of crisis triggered by the COVID-19 pandemic. In response, the financial authorities introduced support measures worth KRW175 trillion-plus. As a result, the recovery has been faster than expected. However, in the process, the level of debt in the private sector has soared with a rapid rise in household debt posing risks to the economy. In the meantime, continuing with the provision of sufficient financing support remains an important task, especially with the recent spread of COVID19 variants. The financial authorities are aiming for an appropriate balance between these two objectives while aiming to control household debt growth within 5 to 6 percent this year and about 4 percent in next year. (Household Debt in H1 2021) Household debt in the first half of this year rose KRW63.3 trillion, or about KRW10.6 trillion a month. Compared to the same period from the previous year (up KRW6.1 trillion), the pace of growth has accelerated, but it has slowed down compared to the second half of last year (up KRW12.6 trillion). The household debt growth remained at about the same level in the banking sector but expanded in the non-banking sector. Given a higher rate of housing market transactions, there are growing risks in the non-banking sector. (Household Debt Management Plan for H2 2021) In order to meet the goal of containing the growth of household debt within the 5 to 6 percent level, the financial authorities will work to ensure effective implementation of the household debt management measures, such as a gradual expansion of the application of DSR on individual borrowers. In the fourth quarter, the authorities w
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Jul 14, 2021
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Jul 14, 2021
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Jul 13, 2021
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Jul 13, 2021
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Jul 13, 2021
- FSC Identifies D-SIBs for 2022
- The FSC identified five bank holding companies (BHCs) and five banks as domestic systemically important banks (D-SIBs) for 2022 on July 13: Shinhan Financial Group, KB Financial Group, Hana Financial Group, Woori Financial Group, NH Financial Group, Shinhan Bank, KB Kookmin Bank, Woori Bank, KEB Hana Bank and NH Bank. Those identified as D-SIBs are required to set aside an additional common equity capital of 1%, and the higher loss absorbency requirement will take effect on January 1, 2022. The FSC will identify D-SIBs every year in accordance with assessment criteria recommended by the Basel Committee on Banking Supervision (BCBS). In addition, the FSC identified D-SIBs as domestic systemically important financial institutions (D-SIFIs) under the amended Act on the Structural Improvement of the Financial Industry. D-SIFIs are required to prepare and submit their own recovery plans to the Financial Supervisory Service (FSS) within three months from the day of being designated as a D-SIFI. * Please refer to the attached PDF for details.
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Jul 13, 2021
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Jul 08, 2021
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Jul 06, 2021
- FSC Holds Symposium on COVID-19 Financial Policy
- The FSC and the Korea Institute of Finance co-hosted a policy symposium on the effectiveness of COVID-19 financial policy on July 6. FSC Chairman Eun Sung-soo attended the symposium and delivered a keynote address highlighting the progress of policy implementation and future policy direction. The following is a summary of Chairman Euns remarks. (COVID-19 Crisis Policy Response) In the wake of the COVID-19 pandemic, the government rolled out policies focusing on the prevention of risk transfer channels, provision of an exhaustive level of support and setting up firewalls in financial markets to help remove market anxieties. The authorities worked on stock market and bond market stabilization measures while prioritizing support for small-scale businesses. Financial support was extended to businesses of all sizes that have been hit by the pandemic. The KRW175 trillion-plus COVID-19 financial support programs were introduced to contain fear and anxiety in markets. This unprecedented level of financial support by the government helped to quickly stabilize the financial system, provide liquidity to small merchants and SMEs while preventing large-scale bankruptcies or job losses in key industries. As a result, the Korean economy saw the smallest negative growth last year while stock markets continue to set new record highs. In March this year, the IMF stated that Koreas decisive policy response has helped the country navigate the COVID-19 shock. (Future Policy Direction) In order to overcome the pandemic-induced crisis and be prepared for potential aftershocks, an orderly process for policy normalization is necessary. First, the government will maintain close monitoring on the status of virus prevention, real economy and financial market conditions as there still exist uncertainties, such as the spread of COVID variants. Second, the government will work to ensure financial stability by preemptively managing potential risk factors, such as an excessive accumulation of debt.
