-
May 14, 2025
- Household Loans, April 2025
- In April 2025, the outstanding balance of household loans across all financial sectors rose KRW5.3 trillion (preliminary), growing at a faster pace compared with the previous month (up KRW0.7 trillion). (By Type) Home-backed mortgage loans increased KRW4.8 trillion, rising at a faster pace compared with a month ago (up KRW3.7 trillion). The pace of mortgage loan growth accelerated in the banking sector (up KRW2.5 trillion up KRW3.7 trillion), while slowing down somewhat in the nonbanking sector (up KRW1.2 trillion up KRW1.1 trillion). Other types of loans increased KRW0.5 trillion, shifting back up from the decline of KRW3.0 trillion in the previous month, as credit loans edged up KRW1.2 trillion from a month ago (down KRW1.2 trillion). (By Sector) In April, household loans in the banking sector rose at a faster pace compared with the previous month (up KRW1.7 trillion up KRW4.8 trillion). Banks own mortgage loans grew at an expanded level (up KRW0.7 trillion up KRW1.9 trillion) and policy-based loans also rose at a slightly faster pace (up KRW1.8 trillion up KRW1.9 trillion). Other types of loans in the banking sector turned back up from the decline in the previous month (down KRW0.9 trillion up KRW1.0 trillion) due to a rise in credit loans. In the nonbanking sector, household loans edged up KRW0.5 trillion, rising from the decline of KRW0.9 trillion a month ago. Savings banks (down KRW0.2 trillion up KRW0.4 trillion) and insurance companies (down KRW0.2 trillion up KRW0.1 trillion) saw household loans shifting back up, while specialized credit finance businesses (down KRW0.9 trillion down KRW0.1 trillion) saw a slower pace of decline. In the mutual finance sector (up KRW0.4 trillion up KRW0.2 trillion), the pace of growth slowed down somewhat compared with the previous month. (Assessment) The expanded pace of household loan growth in April can be attributable to the rise in housing transactions taking place between February and March, and the rise in credit loans
-
May 02, 2025
- Sale of Virtual Assets by Non-profit Corporations and Exchanges will be Allowed From June
- The virtual asset committee finalized the guidelines on sale of virtual assets by non-profit corporations and virtual asset exchanges, including permission on the issuance of real-name account for the purpose of virtual asset disposal and requirements to prevent money laundering and conflicts of interests. BACKGROUND Vice Chairman Kim Soyoung of the Financial Services Commission presided over the fourth meeting of the virtual asset committee on May 1 at the Government Complex Seoul. Joined by relevant ministry officials, agencies, and private sector experts, the committee finalized the guidelines on sale of virtual assets by non-profit corporations and virtual asset exchanges. The measure is a follow-up to the roadmap for allowing transactions of virtual assets by corporate entities. In addition, in response to growing concerns over investor harm caused by extremely volatile movements in virtual asset prices right after they become listed, the so-called listing pumps, the committee also discussed proposed revisions to the best practice guidelines for listing. key revision details Guidelines for Virtual Asset Disposal by Non-profit Corporations To ensure the proper level of internal controls and transparency, the guidelines for non-profit corporations will initially allow disposal of virtual assets by entities subject to external audit with five years or more in business operation and require them to establish an internal committee for prior reviews on the appropriateness of the donations and the plans for liquidation into cash. Given that virtual assets easy liquidation into cash is necessary for an adequate use of donated virtual assets, the virtual assets subject to donation will be limited to virtual assets that are traded in at least three Korean won-based exchanges only. Also, the donated virtual assets must be liquidated into cash immediately upon donation. In order to ensure safeguard measures for anti-money laundering, the guidelines strengthen verification
-
Apr 23, 2025
- FSC Chairman Visits Boston and New York to Strengthen Financial Cooperation
- Chairman Kim Byoung Hwan of the Financial Services Commission visited Boston and New York, the United States on April 21-22. On April 21, Chairman Kim visited Bostons biotech cluster and held a meeting with the investment companies and Korean biotech firms operating in the U.S. to seek insights on ways to bring about regulatory improvements to promote Koreas biotech venture investment. On April 22, Chairman Kim visited New York and had meetings with Blackstone CEO Stephen Schwarzman and Korean financial companies that have established business operations in New York. Visit to Boston Visit to KHIDIs U.S. Office On April 21, Chairman Kim visited the Korea Health Industry Development Institute (KHIDI)s U.S. office in Boston to gain overall insights into the regions biotech cluster (Kendall Square, aka the most innovative square mile on the planet), which is the worlds largest biotech venture ecosystem hosting more than a thousand biotech companies, research institutions, hospitals, and universities. During his visit, Chairman Kim was also briefed about Korean biotech companies operating in the U.S. and the support made available by the KHIDI. Meeting with Venture Capital Investors Chairman Kim held a meeting with a group of Korean venture capitalists operating in Bostons biotech cluster to seek diverse opinions and gain insights on ways to cultivate a biotech venture investment ecosystem in Korea. At the meeting, Chairman Kim said that Koreas venture investment has declined after reaching a peak in 2021-2022, particularly in the biotech sector associated with high risks where long-term investments are required. Since investors may face difficulties in making an exit in the biotech industry, Chairman Kim said that there are concerns over a potential fall in the biotech venture ecosystem. In this regard, Chairman Kim sought diverse recommendations and opinions from participants that will help to foster a biotech venture ecosystem in Korea. Visit to AVEO Oncology Chairman
-
Apr 14, 2025
- New Sanctions Mechanisms on Unfair Trading and Illegal Short Sale Activities to Take Effect from April 23
- The Financial Services Commission announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) intended to establish new sanctions mechanisms against unfair trading and illegal short sale activities at the cabinet meeting held on April 14. The revised Enforcement Decree is scheduled to go into effect on April 23, 2025 along with the revised FSCMA and subordinate regulations. Background The government has continuously worked to strengthen monetary sanctions through the introduction of penalty surcharge and the increased level of fine imposable against unfair trading and illegal short sale activities in capital markets. However, in order to more effectively prevent the recurrence of unfair trading activities, the need for introducing non-monetary sanctions mechanismssuch as an account freeze and a restriction from being appointed or serving as an executive officer at listed companieshas been called for taking examples from major overseas countries, such as the U.S., Hong Kong, and Canada. Therefore, this revision bill introduces the following non-monetary sanctions mechanisms(a) a restriction for rule-breakers from engaging in transactions of financial investment products and being appointed or serving as an executive at listed companies and (b) an account freeze (payment suspension) on the accounts suspected to have been used in unfair trading or illegal short sale activities. Key Revision Details I. Restriction from Engaging in Transactions of Financial Investment Products Application of Regulation Under the revised FSCMA, the FSC is authorized to restrict rule-breakers (those who have engaged in unfair trading and/or illegal short sale activities) from engaging in transactions of financial investment products for up to five years depending on the nature, seriousness, period, frequency, and the level of unfairly gained profits of the rule-breaking activities. In this regard,
-
Apr 14, 2025
- FSC Proposes Legislative Changes to Improve Regulations on Financial Holding Companies
- The Financial Services Commission issued a preliminary notice of legislative changes on April 14 regarding the Financial Holding Companies Act (the Act hereinafter) and its Enforcement Decree, with aims to facilitate synergetic effects within financial holding companies and unleash more agile responses amid changing external environments. Background Financial holding companies (aka financial conglomerates) have been continuously growing since the enactment of the Act in 2000, which sought to improve the competitiveness of financial companies through enlargement and concurrent business operations, while promoting the sound management of their subsidiaries. However, despite the quantitative growth achieved thus far, it has been pointed out that their growth in qualitative terms has remained inadequate due to investment regulations and ownership restrictions. Particularly with rapidly changing environments in the financial sector, such as digital transformation and the big blur phenomena, it has become increasingly crucial to seek regulatory reforms enabling financial holding companies to more agilely and effectively cope with these changes. In this regard, the FSC has held a series of taskforce meetings and seminars with relevant stakeholders and private sector experts to draw up plans to improve rules on financial holding companies. Some of the measures that require no revision to legislation and can be enforced through authoritative interpretationsuch as the shared use of office space, sharing of information for management purpose, and expanding the scope of financial holding companies business areasbe will take effect immediately. The measure which requires a legislative revisionraising the maximum level of investment financial holding companies can make in fintech businesseswill go through a relevant amendment process. Key Revision Details Easing Financial Holding Companies Fintech Investment Limit Pursuant to the current Act, financial holding companies are allow
-
Apr 10, 2025
- Household Loans, March 2025
- In March 2025, the outstanding balance of household loans across all financial sectors edged up KRW0.4 trillion (preliminary), growing at a slower rate compared with the previous month (up KRW4.2 trillion). (By Type) Home mortgage loans increased KRW3.4 trillion, as the pace of growth decelerated in both the banking (up KRW3.4 trillion up KRW2.2 trillion) and nonbanking (up KRW1.5 trillion up KRW1.1 trillion) sectors from a month ago. Other types of loans dropped KRW3.0 trillion, declining at a faster rate compared with the previous month (down KRW0.7 trillion) as credit loans shifted back lower from a month ago (up KRW0.1 trillion down KRW1.2 trillion). (By Sector) Household loans in the banking sector (up KRW3.3 trillion up KRW1.4 trillion) grew at a slower rate, while shifting back lower in the nonbanking sector (up KRW0.9 trillion down KRW1.0 trillion). In the banking sector, policy-based loans rose at a slower rate compared with the previous month (up KRW2.8 trillion up KRW1.5 trillion), while banks own mortgage loans increased at a slightly faster rate (up KRW0.6 trillion up KRW0.7 trillion). Other types of loans including credit loans dropped at a faster rate from a month ago (down KRW0.2 trillion down KRW0.9 trillion). In the nonbanking sector, household loans grew at a slower rate in the mutual finance sector (up KRW0.8 trillion up KRW0.3 trillion), while declining at a faster rate in the savings banks sector (down KRW0.03 trillion down KRW0.2 trillion). Specialized credit finance businesses saw household loan growth turning back down (up KRW0.3 trillion down KRW0.9 trillion), while insurance companies saw a similar level of drop from the previous month (down KRW0.1 trillion down KRW0.1 trillion). (Assessment) The outstanding balance of household loans in March 2025 rose KRW0.4 trillion, edging up at a slower rate compared with the previous month (up KRW4.2 trillion), which shows a stable trend in the pace of growth. However, the high volume of housing mark
-
Apr 09, 2025
- FSC Introduces Plans to Improve Competitiveness of Corporate Financing by Securities Businesses
- The Financial Services Commission announced plans to improve the competitiveness of corporate financing by securities businesses on April 9. Under the newly introduced plans, comprehensive financial investment business entities (CFIBEs hereinafter) will be subject to increased credit granting limits for corporate financing and required to supply 25 percent of capital raised from promissory notes and investment management account (IMA) for venture capital. The IMA scheme, which was first introduced in 2017 but has not been utilized since, will go through improvements. Based on the improved IMA scheme, the process for designating CFIBEs that are eligible to handle promissory notes and IMA will begin within this year. Moreover, the plans contain measures to provide incentives for overseas expansion of securities firms and regulatory reforms intended to bolster the soundness management over derivatives-linked securities (DLS) and derivatives-linked bonds (DLB). In June this year, the FSC plans to prepare and announce detailed measures to strengthen the soundness of real estate financing and liquidity management by securities firms and ways to improve rules on the soundness of CFIBEs. FSC Chairman Holds Meeting with CEOs of CFIBEs On April 9, FSC Chairman Kim Byoung Hwan held a meeting with the CEOs of ten major CFIBEs and introduced the governments plans to improve the competitiveness of corporate financing by securities firms centered on regulatory improvements for CFIBEs. At the meeting, Chairman Kim and the participants discussed future directions for securities businesses in sustaining an innovative growth of our economy and promoting value-up in capital markets. In his opening remarks, Chairman Kim underscored the important role of capital markets in making sure that our economy maintains vitality and continues to grow in the future. In this regard, Chairman Kim said that the plans being introduced today are intended to boost the role of securities businesses in co
-
Mar 27, 2025
- FSC Introduces Plan to Facilitate Entrustment of Banking Services to Improve Consumer Access to Financial Services
- The Financial Services Commission announced a plan to facilitate the entrustment of banking services to improve consumer access to financial services on March 27. Under the plan, the FSC plans to (a) establish a legislative ground for introducing bank agency services and (b) facilitate the use of jointly shared automated teller machines (ATMs) in the banking sector and the small-sum deposit and withdrawal services at convenience stores. With digital transformation rapidly taking place in the financial industry, the number of physical bank branches has been continuously declining.This declining trend has been evident not only in Korea but across the globe as it has become inevitable that online (non-face-to-face) work processes have picked up in a digital era. However, this declining trend in the number of bank branches may restrict financial access to digitally vulnerable consumer groups, such as the elderly. Thus, the proposed plan to facilitate the entrustment of banking services is expected to help address this problem and improve consumer access to financial services. Introducing Bank Agency Services Under the bank agency framework, third-party entities are authorized to provide intrinsic banking services specified under the Banking Act (deposit-taking, lending, money transfer, etc.). This allows consumers to conduct face-to-face banking businesses on-site at locations that are not bank branches. Bank agencies do not engage in all types of banking functions but instead only perform certain types of services requiring face-to-face interactions with customers on behalf of banks, such as consulting, receiving application forms, signing an agreement, etc. Other types of banking functions, such as the screening and approval of applications which require decision-making but no interaction with customers, are still directly performed by banks. Since bank agencies will perform intrinsic banking services, there will be entry restrictions, and only authorized entities wil
-
Mar 24, 2025
-
Mar 21, 2025
- Mobile Foreigner Residence Card to be Accepted for Opening Bank Account at Six Domestic Banks from March 21
- The Financial Services Commission, the Ministry of Justice, and the Ministry of the Interior and Safety announced that foreigners residing in Korea with registered IDs will be able to open bank accounts and conduct financial transactions using mobile foreigner residence cards from March 21. From January 10 this year, the Ministry of Justice began to issue mobile foreigner residence cards to those who have registered their status of residence in Korea. A mobile foreigner residence card can be obtained if the foreigner with registered status is 14 years of age or older and owns a smartphone under his or her own name. After downloading mobile ID app on their smartphones, foreign residents can obtain mobile foreigner residence cards by tagging their plastic foreign resident ID cards (integrated circuit cards) on smartphones, or by scanning the QR code with the mobile ID app. To make sure that personal ID verification is conducted safely and conveniently, the Ministry of the Interior and Safety established a blockchain-based and integrated mobile ID system and has introduced mobile IDs for drivers license (Jan. 2022), veteran ID card (Aug. 2023), and foreign resident ID card (Jan. 2025) in coordination with related ministries. The financial sector and the financial authorities have also been making relevant changes to boost the convenience and safety of consumers in their transactions with financial companies. As such, from March 21, 2025, foreign residents will be able to open bank accounts and conduct financial transactions using their mobile foreigner residence cards from six domestic banks (Shinhan, Hana, iM, Busan, Jeonbuk, and Jeju). Under the revised Immigration Act, mobile foreigner residence card is recognized as an equally valid form of ID as the original plastic ID card. The financial authorities in close coordination with the Ministry of the Interior and Safety and the banking sector have since then made changes and upgraded relevant procedures and systems to
-
Mar 12, 2025
- Household Loans, February 2025
- In February 2025, the outstanding balance of household loans across all financial sectors increased KRW4.3 trillion (preliminary), shifting back up from the drop of KRW0.9 trillion in the previous month. (By Type) Home mortgage loans increased KRW5.0 trillion, growing at a faster rate compared with the previous month (up KRW3.2 trillion). Mortgage loans expanded at a faster rate in the banking sector (up KRW1.7 trillion up KRW3.5 trillion), while growing at a similar level in the nonbanking sector (up KRW1.5 trillion up KRW1.5 trillion). Other types of loans dropped KRW0.6 trillion, declining at a slower rate compared with the previous month (down KRW4.1 trillion), as credit loans shifted back up from a month ago (down KRW1.5 trillion up KRW0.1 trillion). (By Sector) Household loans in the banking sector rose KRW3.3 trillion, turning back up from the decline of KRW0.5 trillion a month ago. Policy-based loans grew at a faster rate (up KRW2.2 trillion up KRW2.9 trillion), while banks own mortgage loans edged up from the decline in the previous month (down KRW0.6 trillion up KRW0.6 trillion). Other types of loans including credit loans declined at a slower rate compared with the previous month (down KRW2.1 trillion down KRW0.2 trillion). In the nonbanking sector, household loans rose KRW1.0 trillion, turning back up from the decline of KRW0.5 trillion a month ago. Mutual finance businesses (down KRW0.1 trillion up KRW0.8 trillion) and specialized credit finance businesses (down KRW0.1 trillion up KRW0.3 trillion) saw household loans shifting back up from the previous month. Savings banks saw a drop of KRW0.02 trillion from the growth of KRW0.2 trillion a month ago. Household loans in the insurance sector dropped at a slower rate compared with the previous month (down KRW0.5 trillion down KRW0.1 trillion). (Assessment) The outstanding balance of household loans across all financial sectors edged up somewhat considerably in February as financial companies have begun to i
-
Mar 06, 2025
-
Feb 26, 2025
- Authorities Propose Comprehensive Measures to Prevent Mis-selling of Highly Complex Investment Products
- The Financial Services Commission and the Financial Supervisory Service introduced a set of measures intended to prevent mis-selling of highly complex financial investment products on February 26. Background In the aftermath of large-scale losses incurred to investors regarding the sales of Hong Kong index-linked ELS (equity-linked security) products by domestic financial companies in early 2024, the FSS prepared the guidelines for compensations on March 11, 2024, and the banking sectors compensation programs have been in progress. As a result, the numbers of compensations being paid out to investors, of cases in which investors have agreed to the terms of compensation, and of the ratio of compensation amount on average have all continued to increase between the end of June 2024 and the end of 2024. On-site inspections conducted by the FSS revealed that most bank branches had no clear distinction of counters between the ones selling highly complex financial investment products and those handling ordinary deposit-taking functions. As a result, great numbers of consumers could have been misled into believing that these highly complex financial investment products were principal-guaranteed products. Moreover, their sales practices revealed that financial companies placed a higher priority on sales performance rather than on the compliance of sales regulations. As a consequence, there was inadequate information provided to investors regarding the risk associated with highly complex financial investment products, and the sales of ELS products took place without the establishment of sufficient internal control mechanisms designed to prevent mis-selling and ensure protection of consumers. Against this backdrop, the FSC and the FSS have prepared measures to prevent mis-selling of highly complex financial investment products after having a series of meetings with related experts and industry groups. Key Measures a) Making improvements to financial investment products sales c
-
Feb 18, 2025
- Revised Rules under FSCMA Pave Way for Resumption of Short Sale Transactions on Schedule from March 31
- The Financial Services Commission announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) at the cabinet meeting held on February 18. This revision is aimed at upgrading rules on short sale practices. Imposing a Limit on Institutional Investors Stock Repayment Period (Article 208-6) The stock repayment period for institutional investors, which shall be determined by an agreement from both lender and borrower, should not exceed 12 months in total with maximum repayment periods of 90 days for renewal each time. However, in the case of delisting of stocks or suspended trading on the final day of repayment, or when an account-to-account transfer is being restricted, the final day of repayment will be moved to three business days from the day in which the cause of the payment delay is lifted. Introducing Measures Intended to Prevent Naked Short Sale Activities (Article 208-7) Corporate entities that have plans to engage in short sales of listed stocks and securities companies that receive and place short sale orders will be obligated to comply with a set of naked short sale prevention measures. Corporate entities with a net short position balance of 0.01 percent of total issuance volume (excluding net short position balance of less than KRW100 million) or KRW1 billion or more as well as market makers and liquidity providers (institutional investors) will be subject to the following rules. First, they will be required to set up and operate electronic net short position balance management systems to facilitate item-by-item short position balance management and prevent naked short sale activities. Second, they will be required to prepare internal control standards, which should specify details about the role and responsibility of employees, short position balance management system, the recording and bookkeeping of short sale transactions details for at least five years, and the
-
Feb 13, 2025
- Transactions of Virtual Assets by Corporate Entities to be Allowed in Stages
- Vice Chairman Kim Soyoung of the Financial Services Commission presided over the third meeting of the virtual asset committee on February 13 and held discussions with related ministry officials and private sector experts on the final policy measures aimed at allowing corporate transactions of virtual assets in the virtual asset market. At the meeting, the committee also discussed ways to bring about improvements to the best practice guidelines for listing virtual assets to help resolve the problem of listing competition among exchange service providers and reviewed the progress of regulatory reform regarding the introduction of security token offering (STO). A Roadmap for Allowing Corporate Participation in the Virtual Asset Market Background The transaction of virtual assets by corporate entities has been prohibited in principle following government regulations introduced in 2017. At the time, in comparison to transactions by individuals, the government was concerned that corporate transactions of virtual assets could pose significant threats of money laundering and market overheating. Thus, the government decided to ban corporate transactions of virtual assets to help ease the highly speculative market conditions, and as a routine practice, banks have been restricting the opening of real-name verified accounts for corporations intended for virtual asset transactions. However, with the implementation of the Virtual Asset User Protection Act from July 19, 2024, the legislative foundation has been established to provide protections for users. In addition, there have been changes in market environment with major countries around the world widely accepting corporate transactions of virtual assets and the demand for pursuing new blockchain-related business opportunities rising among domestic businesses. As such, there has been growing demand for permitting corporate entities to engage in virtual asset transactions in the domestic market. Against this backdrop, the virtu
-
Feb 12, 2025
- Household Loans, January 2025
- In January 2025, the outstanding balance of household loans across all financial sectors declined KRW0.9 trillion (preliminary), turning back down from the growth of KRW2.0 trillion in the previous month. (By Type) Home mortgage loans increased KRW3.3 trillion, growing at a slightly slower rate from the previous month (up KRW3.4 trillion). Mortgage loans expanded at a faster rate in the banking sector (up KRW0.8 trillion up KRW1.7 trillion) but at a slower rate in the nonbanking sector (up KRW2.6 trillion up KRW1.6 trillion). Other types of loans fell KRW4.2 trillion, declining at a faster rate compared with the previous month (down KRW1.4 trillion), as the pace of decline expanded significantly in the nonbanking sector (down KRW0.3 trillion down KRW2.0 trillion). (By Sector) Household loans in the banking sector saw a similar level of decline from the previous month but shifted back down in the nonbanking sector. In January 2025, banks saw a drop of KRW0.4 trillion in household loans, showing a similar level of growth from a month ago (down KRW0.4 trillion). Government-backed policy loans increased at a slower rate (up KRW2.5 trillion up KRW2.3 trillion), while banks own mortgage loans declined at a slower rate (down KRW1.7 trillion down KRW0.6 trillion). Other types of loans including credit loans dropped at a faster rate compared with the previous month (down KRW1.1 trillion down KRW2.1 trillion). In the nonbanking sector, household loans fell KRW0.5 trillion, shifting back down from the growth of KRW2.4 trillion a month ago. Mutual finance businesses (up KRW2.2 trillion down KRW0.2 trillion) and insurance companies (up KRW0.3 trillion down KRW0.5 trillion) saw household loans edging down from increases in the previous month. Specialized credit finance businesses experienced a slower pace of decline (down KRW0.3 trillion down KRW0.01 trillion) and savings banks saw a faster rate of growth (up KRW0.1 trillion up KRW0.2 trillion). (Assessment) The outstanding balan
-
Feb 05, 2025
- FSC Grants Final Approval to Nextrade for Operation of ATS Scheduled to be Launched on March 4
- The Financial Services Commission held a regular meeting on February 5 and granted final approval to Nextrade for operating an alternative trading system (ATS). The introduction of an ATS in domestic stock market will officially set off a multiple-exchange and competition-based stock trading system in Korea. As part of capital market reform efforts, the government first established legislative grounds for ATS in 2013 with aims to make capital market more accessible through diversification of stock market infrastructures and improvement in transaction convenience for investors. After granting preliminary approval to Nextrade in July 2023, the FSC and related organizations held a seminar on May 9, 2024 where the authorities introduced a set of measures on ATS operation and integrated market management and oversight plans. Based on diverse opinions discussed at this seminar, Nextrade took steps needed to prepare its organization and set up a trading operation and filed an application to the FSC on November 29, 2024 to obtain final approval for operating ATS. After having an external review conducted by a committee of private sector experts and going through a screening of qualifications by the Financial Supervisory Service (FSS), the FSC decided to grant final approval to Nextrade for the operation of ATS. Expected Changes in Trading Experience with Nextrade Nextrade plans to begin operating from March 4, 2025. Nextrades launch is expected to bring about increased benefits to investors, such as extended trading hours, availability of more diverse order types, and reduction in transaction costs resulting from competition over fees. The market oversight and supervisory framework will also shift to an integrated system to ensure investor protections. I. A new stock trading experience Aside from regular trading hours, which will be identically operated by both the Korea Exchange (KRX) and Nextrade, the ATS will operate pre-market (between 08:00 and 08:50) and after-market
-
Feb 03, 2025
- Rule Changes Proposed to Establish Legal Grounds for Fractional Investment and Allow ATS to Trade ETFs
- The Financial Services Commission issued a preliminary notice of rule changes on February 3 regarding the Enforcement Decree and Enforcement Rules of the Financial Investment Services and Capital Markets Act (FSCMA) and subordinate regulations on financial investment businesses and the issuance and disclosure of securities. The rule changes being proposed address the following. First, there will be legal grounds established for fractional investment platforms issuing beneficiary certificates and securities lending intermediary platforms (both currently operate under the regulatory sandbox program). Second, trading exchange traded funds (ETFs) and exchange traded notes (ETNs) will be made possible via alternative trading system (ATS). Third, IPO bookrunners will be required to conduct due diligence and prohibited from accepting compensation outside the confines of the contract. Other rule changes include the followingmaking backdoor listing (where a larger sized non-listed firm determined by corporate value merges with a smaller sized listed firm) subject to listing review, allowing more types of foreign currency-denominated bonds (supranational bonds and Korean paper) to be included in the foreign currency repurchase agreements (repos) offered to investors, and raising the limit on retail investors over-the-counter (OTC) bond transactions in small scale, which are eligible for same-day transaction settlement (T+0), to KRW10 billion from KRW5 billion currently. The rule changes are put up for public comment until March 17 and expected to take effect from June 16 this year after going through a legislative review and a successive approval process. Establishing Legal Ground for Fractional Investment Fractional investment involves the sale of a share in underlying asset, such as real estate and intellectual property, after it has been securitized, and takes the form of public offering of securities. In general, it can take the form of issuing either non-monetary trust b
-
Jan 24, 2025
-
Jan 21, 2025
- Reform Plans for IPO and Delisting Rules
- On January 21, the Financial Services Commission and related organizations including the Financial Supervisory Service (FSS), Korea Exchange (KRX), Korea Financial Investment Association (KOFIA) and Korea Capital Market Institute (KCMI) held a joint seminar on improving initial public offering (IPO) and delisting rules, as part of the governments ongoing efforts for capital market reforms. At the seminar, the FSC unveiled reform plans for IPO and delisting rules and gathered feedback from various market participants. FSC Chairman Kim Byoung Hwan delivered his congratulatory remarks outlining the background and directions of the reform plans. The Chairman said that the market structural improvement is needed to boost the overall valuation of our capital market as the government has been pushing forward capital market reform initiatives since last year. Regulatory reforms on IPO and delisting rules will be pushed forward as another major task for the value-up initiatives, he emphasized. In regard with the IPO market, Chairman Kim said that reform plans will incentivize institutional investors to hold shares for a longer period under a lock-up commitment, which will help shift the IPO market more towards investments based on corporate value. Reforms will also strengthen the roles and responsibilities of underwriters for determining appropriate IPO prices and securing mid-to-long-term investors, he added. Regarding the delisting rules, Chairman Kim explained, the authorities will strengthen the requirements for companies to remain listed and streamline delisting procedures so that companies undermining market trust can be timely removed without delay. Along with this, Chairman Kim suggested that the government will consider overhauling the stock market structure to make it more efficient and provide stronger investor protection. We will seek differentiation and linkage between market segments so that companies can raise funds in the market tailored to their growth stage
