Press Releases - Financial Services Commission

Press Releases

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Jan 19, 2021

FSC Announces 2021 Work Plan

The FSC unveiled its work plan for 2021 on January 18, highlighting the four areas of policy tasks as follows(a) maintaining the COVID-19 financial support and managing potential risks, (b) supporting K-New Deal initiatives for a green and digital economy, (c) promoting financial innovation and digital finance and (d) strengthening financial consumer protection and support for vulnerable groups. KEY ACHIEVEMENTS IN 2017-2020 A. STEADY MAINTENANCE OF FINANCIAL STABILITY AMID COVID-19 PANDEMIC Over the past four years, the FSC has focused on maintaining stability in the financial system as its utmost policy priority. In the wake of the COVID-19 pandemic, the FSC responded by quickly drawing up and providing financial support packages worth KRW175 trillion-plus and worked to prevent the crisis from spreading further into the financial markets. B. SUCCESSFUL CHANNELING OF FUNDS TO PRODUCTIVE SECTORS The FSC has worked to expand the supply of capital into more productive sectors by introducing innovative ways to assess corporate credit and through revisions to the relevant capital markets rules. In addition, the public sector has provided equity-based funding sources via growth ladder fund and other government-backed financing channels. C. ACTIVE PROMOTION OF COMPETITION AND INNOVATION IN FINANCIAL INDUSTRY The FSC has granted new business licenses to internet-only banks, insurance firms and real estate trust companies based on an industry-level competition assessment. In order to promote and expand financial innovation, the FSC has also worked to establish the necessary infrastructures, including the regulatory sandbox, open banking and MyData in financial services. D. ENHANCED INCLUSIVENESS VIA MICROFINANCE SUPPORT AND CONSUMER PROTECTION The FSC has worked to reduce the interest payment burdens of lower income households by lowering the maximum interest rate that can be charged on loans from 24% to 20%. E. IMPROVED FAIRNESS BASED ON RULES AND PRINCIPLES The FSC has al
Jan 14, 2021

FSC Plans to Improve Corporate Disclosure Rules

Vice Chairman Doh Kyu-sang held a meeting with industry officials and experts via teleconference on January 14 and discussed the government’s plans to improve rules on corporate disclosure.The following is a summary of Vice Chairman Doh’s remarks.BACKGROUNDAs the pandemic situation continues, there are growing uncertainties throughout the economy and rapid changes are taking place in the business management environment. As such, the accuracy and promptness in corporate disclosure has become ever more important. Considering a surge in retail investors’ participation in stock markets last year, the disclosure rules need to be improved to allow retail investors to more easily understand disclosure information while reducing filing burdens for companies. In addition, with growing significance of environmental, social and governance (ESG) factors and responsible investing, it is necessary to set up an appropriate regulatory environment.PLANS FOR IMPROVEMENTI. IMPROVE INVESTOR CONVENIENCE IN USING DISCLOSURE INFORMATIONThe required criteria for company disclosure reports and the categorization system will be changed and redundancy will be removed to help improve retail investors’ understanding of disclosure information. An easy-to-understand information booklet will also be published for retail investors. In addition, the Data Analysis, Retrieval and Transfer (DART) System managed by the Financial Supervisory Service will be improved to make it more user-friendly with the introduction of more useful menu categories and enhanced search capabilities.II. REDUCE COMPLIANCE BURDENS FOR BUSINESSESQuarterly reports which have placed relatively heavy burdens on companies will be simplified to contain only key disclosure information, reducing the current requirement items by about forty percent. In addition, corporate filing burdens will be reduced for a greater number of smaller sized companies. III. PROMOTE ESG/RESPONSIBLE INVESTINGThe Korea Exchange will provide a guida
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Jan 14, 2021

Household Loans, December 2020

The outstanding balance of household loans in all financial sectors rose KRW8.5 trillion from the previous month at the end of December 2020 (up 8.0% y-o-y). The household loan balance increased KRW6.7 trillion in the banking sector and KRW1.8 trillion in the non-banking sector.By type, mortgage loans expanded KRW6.7 trillion in December, dropping KRW0.1 trillion from the previous month (up KRW2.1 trillion y-o-y). In the banking sector, mortgage loans grew KRW6.3 trillion while mortgage lending by non-banks increased KRW0.4 trillion from the previous month. Other types of loans rose KRW1.8 trillion, showing a significant decline (down KRW10.1 trillion m-o-m) from the previous month due to strict regulations on credit loans.In 2021, the financial authorities will continue to closely monitor trends in household loans and check the implementation of the household debt management plan. The authorities will draw up a plan in the first quarter that aims to make a gradual transition toward the the application of DSR rules centered on individual borrowers’ debt service capabilities.* Please refer to the attached PDF for details.
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Jan 14, 2021

Additional Lending Support Available for Small Merchants from January 18

The FSC announced the availability of additional lending support for small merchants on January 14, including lower interest rates and guarantee fees for the second phase COVID-19 financial support program and the newly launched lending support of up to KRW10 million for those hit by social gathering restrictions. Beginning on January 18, the second phase COVID-19 lending program for small merchants will be offered at an interest rate of maximum two percentage points lower than the previously offered levels. The banking sector agreed to lower interest rates for small merchant loans by one percentage point on December 29 last year. In addition, KB Kookmin bank, Woori Bank, KEB Hana Bank, NH Bank and Industrial Bank of Korea will offer an extra one percentage point reduction in interest rates. For small merchants whose businesses have been negatively affected by the governments social gathering restrictions, a special lending program of up to KRW10 million will also be available from January 18 on top of the existing loan support. * Please refer to the attached PDF for details.
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Jan 13, 2021

FSC Grants Preliminary Financial Investment Business License to IMC Trading BV

The FSC decided to grant a preliminary financial investment business license to IMC Trading BV, a Netherlands-based trading firm on January 13. It marks the first approval of a foreign-based trading firm in three and a half years.Based on the application processing results by the Financial Supervisory Service, the FSC decided that IMC meets the requirements set forth by the Financial Investment Services and Capital Markets Act.The entry of a new foreign-based securities firm into domestic markets has favorable effects as its market making function can help propel transactions on low-liquidity stocks and help promote domestic markets as global financial hubs.As such, the authorities will continue to work on close supervision of market makers to ensure their proper function.IMC is required to apply for the final approval within six months.* Please refer to the attached PDF for details.
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Jan 13, 2021

FSC Grants Preliminary MyData Business Licenses to Seven More Entities

The FSC decided to grant preliminary MyData business licenses to seven more business entities on January 13. The seven approved firms are Viva Republica, Minwise Co, Coocon, Fintech Inc., Habit Factory, Standard Chartered Korea and SK Planet.For Kakao Pay, the application review is still ongoing.The FSC plans to announce the final license approval results in late January.* Please refer to the attached PDF for details.
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Jan 13, 2021

FSC Announces Revisions to Enforcement Decree as a Follow-up to Improve Rules on Short Selling

The FSC announced revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) on January 13 as a follow-up measure to the government’s effort to strengthen penalties on illegal stock short sale activities. The amendments will be put up for public comments until February 2, 2021.KEY REVISIONS(A) RESTRICTION ON SHORT SELLERS’ PARTICIPATION IN CAPITAL INCREASEThe revised FSCMA restricts short sellers from participating in a company’s capital increase via issuing new shares once the company has made such a plan public, except in certain cases. As such, the Enforcement Decree will be revised to determine a specific time period wherein the short seller’s participation in capital increase is restricted as well as specific cases for exception as specified below. If an investor has shorted a company’s stocks during the restriction period, the investor cannot participate in the company’s capital increase, except for the cases where the short selling is deemed to have no unjust effects on the issuing price as stated below.(RESTRICTION PERIOD) From one day after the disclosure of the company’s capital increase plan until the determination of the issuing price(EXCEPTIONAL CASES) (i) Purchase of new shares exceeding the amount of short positions between the time of the last short sale and the determination of the issuing price, (ii) participation in capital increase by trading units within a firm that operates separate trading units pursuant to the standards specified by the FSC that have no records of short selling the company’s stocks and (iii) short selling for market making or liquidity provision purposes(B) MAINTENANCE OF SHORT SALE TRANSACTIONS DATAThe revised FSCMA requires short sellers to keep their securities lending agreements for five years to be presented promptly to the relevant authorities upon request. As such, the Enforcement Decree will be revised to prescribe specific criteria to be maintained, includ
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Jan 12, 2021

FSC to Ensure Continuing Financial Support for Small Merchants and SMEs

Vice Chairman Doh Kyu-sang held the 32nd financial risk assessment meeting via teleconference on January 12 to review the progress of the COVID-19 financial support programs for small merchants and SMEs.The following is a summary of Vice Chairman Doh’s remarks.(PROVISION OF COVID-19 FINANCIAL SUPPORT) Since February last year, a total of KRW67.5 trillion in financial assistance has been provided to small merchants, SMEs and middle market enterprises. KRW18.3 trillion in lending support has been provided to some 790,000 small business owners. State-backed financial institutions offered preferential lending support to some 43,000 SMEs and middle market enterprises. In this regard, the government’s prompt response to the pandemic helped to lay foundations for an economic recovery this year.(IMPORTANCE OF PREVENTIVE MEASURES) Strict adherence to social distancing and other virus preventive measures needs to take place for a successful economic rebound. Financial institutions should strictly adhere to the social distancing measures. The authorities have been regularly conducting site inspections in this regard. Financial institutions should also ensure that their contingency plans are in place for an effective response to emergency situations.(COVID-19 FINANCIAL RESPONSE PLAN) The government will continue to ensure that financial assistance is available for small merchants and SMEs. In response to the third wave COVID-19 spread, the government unveiled additional assistance measures to ensure the availability of support for small merchants hit by recent social gathering restrictions. Local banks also announced their plans to lower interest rates by about one percentage point. As such, the government will work to ensure that the newly available small merchant support program is ready for operation starting from January 18.(UNSECURED LOANS) Credit-based loans issued by five major banks at the beginning of this year rose KRW217.9 billion. Compared to the early-month tre
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Jan 12, 2021

Government Announces KRW650 Billion Investment in KAMCO to Support Corporate Asset Sell-offs

The government announced its decision to make in-kind contribution of KRW650 billion in the Korea Asset Management Corporation to facilitate its operation of the corporate asset purchase program on January 12.The KAMCO has been operating the corporate asset purchase program mainly through bond issuance, which has led to a rise in its debt ratio in 2020 compared to the previous year. The government’s in-kind contribution in this regard will help contain the KAMCO’s debt ratio within 200 percent until 2022.The in-kind contribution of KRW650 billion raises the government’s total investment in the KAMCO from KRW580 billion to KRW1.23 trillion.With this capital increase, the government expects that the KAMCO will be able to provide more steady support for companies in need of asset sell-offs.* Please refer to the attached PDF for details.
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Jan 07, 2021

Authorities Hold Meeting on Improving Financial Education Programs

The FSC and the FSS held a financial education council meeting via teleconference on January 7 to review the progress of the general plans to improve financial education programs announced on May 1, 2020 and to decide on a specific timeline for implementation. KEY DETAILS(CONTENTS) A guideline on the development of financial education contents and specific standards for the contents certification system are currently being developed. The authorities will finalize the guideline and the standards at the council meeting scheduled for April this year and begin the contents certification process.(CONTENTS DELIVERY CHANNELS) Due to the ongoing COVID-19 pandemic, a shift to more online contents delivery channels has taken place. In the second half of 2021, the one-stop online contents site will be set up to make certified educational contents available to the public at free of charge.(INSTRUCTORS) The authorities are currently working on developing certification standards for professional instructors. The instructor certification process will begin in the first half of 2021 and the one-stop online contents site will operate a professional instructor database in the second half of 2021.(EDUCATIONAL METHODS) Diverse educational and counseling programs are being developed for different groups of target audiences, which will be available for service in 2021.(SCHOOL PROGRAMS) Financial education programs suitable for middle school and high school students are being developed with a pilot program scheduled for March-April 2021.(IMPLEMENTATION FRAMEWORK) Specific details regarding the operation of the financial education council have been included in the enforcement decree of the new legislation on financial consumer protection, which will go into effect in March 2021. The FSS will assume the role of financial education center and coordinate functions of local financial education providers.* Please refer to the attached PDF for details.
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Jan 07, 2021

Amendments to Insurance Business Act to Set Up Joint Committee on Public-Private Health Insruance

The FSC announced amendments to the Insurance Business Act on January 7, which will lay legal foundations for an inter-ministerial cooperation between the FSC and the Ministry of Health and Welfare in the establishment and operation of a joint committee on public-private health insurance system.There have been growing needs for the development of a more closely linked health insurance system between the state-operated national health insurance (NHI) service and indemnity health insurance policies offered by private insurers. As such, the FSC and the MOHW have each drawn up amendments to the Insurance Business Act and the National Health Insurance Act, respectively, with an aim of guaranteeing the provision of a more systematic healthcare coverage and managing healthcare costs at a reasonable level.The amendments establish new provisions which (a) mandate policy cooperation between the FSC and the MOHW, (b) set up a joint committee on public-private health insurance system, (c) authorize the FSC and the MOHW to conduct joint surveys on the interplay between the NHI and private health insurance system and to disclose survey results to the public, etc.The revisions will be put up for public comments until February 16, 2021.* Please refer to the attached PDF for details.
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Jan 06, 2021

FSC Holds Talks on Boosting Innovation and Vitality in Financial Industry

Vice Chairman Doh Kyu-sang held a teleconference meeting with experts from consulting firms and financial institutions on January 6 and discussed the financial industry’s outlook for this year while sharing opinions on policy suggestions.The following is a summary of Vice Chairman Doh’s opening remarks.In the wake of the coronavirus outbreak in 2020, the government promptly rolled out emergency stimulus programs at an unprecedented scale and the financial sectors contributed to the recovery effort through maturity extension, deferment of payments, rent cuts, etc.The year of 2021 is critical as we need to successfully overcome the pandemic while carrying out strategies for a post-pandemic future at the same time. We should continue to move forward with digital innovation in our financial industry while looking for sustainable ways to maintain soundness and generate profit.On the regulatory front, there have been remarkable progress and improvements for digital finance in the areas of contactless, platform and big data services. This year, the government will continue to work on improving rules and regulations in our administrative capacity to make financial rules and regulations more predictable and reasonable. Key suggestions from today’s discussions will be included in the FSC’s work plan for this year.* Please refer to the attached PDF for details.
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Jan 05, 2021

FSC Announces Availability of One-stop Credit Card Reward Points Redemption Service

The FSC announced the introduction of one-stop credit card reward points redemption service made available through the websites and mobile apps of the Credit Finance Association and the Korea Financial Telecommunications and Clearings Institute.Beginning on January 5, individuals can visit either www.cardpoint.or.kr or CFA’s mobile app or KFTC’s mobile app called AccountNFO to check reward points from all their credit cards and redeem in cash and transfer to the account of their choosing.In addition, from January 5, making changes to automatic scheduled payment from credit or debit cards has become easier through KFTC’s mobile app (AccountNFO) or www.payinfo.or.kr.The FSC will continue to work on improving convenience and user experience for financial consumers.* Please refer to the attached PDF for details.
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Dec 29, 2020

Extra Lending Support Available for Small Merchants Hit by Social Gathering Restrictions

The government unveiled additional financial support for small merchants who have been hit by the recent heightening of social gathering restrictions at the 24th Meeting of the Central Economic Response Headquarters held on December 29. The newly announced support will be made available as soon as the system becomes ready at the lending institutions in mid-January 2021.KEY DETAILS(EXISTING PROGRAM) For all small merchants using the second phase small merchant financial support program, the current guarantee fee of 0.9 percent will be lowered to 0.3 percent for the first year for up to KRW20 million in loans.(NEW PROGRAM) A special lending support program will be newly launched to provide targeted support for small merchants who have been negatively affected by the recent heightening of social gathering restrictions. The new lending support for small merchants will be available for up to KRW10 million regardless of whether the borrower is a recipient of the government-sponsored second phase financial support program. There will be no guarantee fee for the first year with 0.6 percent fee rate applied from the second year.The lending institutions are recommended to make available these options to small merchants with low interest rates at their own discretion.* Please refer to the attached PDF for details.
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Dec 24, 2020

Government Extends SPV Operation for Six Months to Ensure Continuing Support

The government, the Bank of Korea and the Korea Development Bank decided to extend the operating period of the special purpose vehicle set up to purchase low-rated corporate bonds and CP for six months until July 13, 2021.The SPV was launched on July 14, 2020 with an initial operating period of six months until January 13, 2021. In order to strengthen support for companies facing liquidity problems, the SPV will reduce the purchasing of AA rated bonds while expanding the proportion of low-rated (A~BBB) corporate bonds. To raise the purchasing capacity of the SPV, a second capital call will be made in the amount of KRW2 trillion.The government, the BOK and the KDB will continue to maintain close cooperation to ensure stability in the financial markets.* Please refer to the attached PDF for details.
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Dec 23, 2020

Government Unveils Plans for K-New Deal Fund

The government announced its plans for the K-New Deal fund at the 23rd Meeting of the Central Economic Response Headquarters held on December 23.PUBLIC SECTOR-LED NEW DEAL FUNDFrom 2021 to 2025, the government aims to raise a total of KRW20 trillion public sector-led New Deal fund through matching investments from the private sector. The public sector funds in the amount of KRW7 trillion will be invested in the fund over the next five years, which will pump-prime private sector investments in the amount of KRW13 trillion.In 2021, the government aims to launch and operate a New Deal fund in the amount of up to KRW4 trillion, thirty-five percent of which will be funded by the public sector including fiscal spending of KRW510 billion and investments from the Korea Development Bank and Korea Growth Ladder Fund. The remaining portion of the fund will be financed with private sector investments from both institutional and retail investors. Retail investors will be allowed to invest via public offerings of privately placed funds, which will make up about five percent of the total private sector investments.INVESTMENT ALLOCATION PLANThe public sector-led New Deal fund in 2021 will be allocated according to policy priorities and the purpose of the investments. First, fund allocation will be based on a bottom-up approach, reflecting investment proposals from the private sector. The investment will be focused on six major New Deal sectors—data, network and artificial intelligence (DNA) sectors, future car green mobility sectors, eco-friendly green industries, New Deal services, SOC digital logistics and smart manufacturing smart farming sectors.At the same time, the fund will invest in New Deal sector businesses for their New Deal related projects on MAs, acquisition of technologies, RD, facility investment and business transformation projects. The proportion of investments on New Deal businesses will make up about seventy to ninety percent with about ten to thirty percent o
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Dec 22, 2020

FSC Designates 15 More 'Innovative Financial Services' for Regulatory Sandbox

The FSC added fifteen more financial solutions to the financial regulatory sandbox on December 22, bringing the total number of ‘innovative financial services’ to 135 since the launching of the financial regulatory sandbox program on April 1, 2019.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. A mobile food order platform within the existing mobile banking application that offers convenience and low-cost financial services to both registered small merchants and consumers (Shinhan Bank)2. A personal health condition rating service offering discounts to existing health insurance premiums (Grade Health Chain)3~5. Personal authentication and ID verification services using facial recognition technologies (Kakao Bank, Toss Securities, Toss Innovation)6. A contactless real-name verification service based on digital certification system (Coinplug)7. An online-based business insurance subscription service that allows an easier sign-up process (DB Insurance)8. A group insurance service offering coverages for small scale employers with less than five employees (Kyobo Life Insurance)9~11. Mobile gift card services using e-commerce platforms (Hana Life Insurance, Kyobo Life Insurance, etc.)12~14. Monthly housing rent payment services using credit cards (Samsung Card, Woori Card, Hyundai Card)15. A credit card reward points service that helps small merchants save on credit card transaction fees and offers them reward points on credit card sales amount on the next business day following credit card transaction (Shinhan Card)* Please refer to the attached PDF for details.
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Dec 22, 2020

FSC Grants Preliminary MyData Licenses

The FSC decided to grant preliminary MyData business licenses to twenty-one financial institutions, fintechs and electronic financial businesses out of a total of thirty-five applicants on December 22. The approved entities were tested on six specific categories, such as the minimum capital requirement, data security capacity, appropriateness of business plan, shareholders’ financial background, board qualifications and professional expertise.For eight other applicants, application review is ongoing as they are asked to take supplemental actions to meet requirements.Aside from the approval process, the authorities are working on measures to strengthen consumer protection in MyData sector. The authorities plan to come up with a specific guideline in this regard in February 2021.* Please refer to the attached PDF for details.
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Dec 21, 2020

FSC Chairman Reviews Policy Response to COVID-19 & Discusses Next Year's Financial Policy

FSC Chairman Eun Sung-soo held a meeting via teleconference on December 21 to assess the implementation of the COVID-19 financial support programs and discuss the 2021 financial policy direction.At the meeting, Chairman Eun stated that the effective provision of the COVID-19 financial support packages was made possible due to close cooperation from all financial sectors, which also helped to create the right conditions for an economic rebound. As a result, out of the KRW175 trillion-plus stimulus programs, about 76 percent of the first phase emergency loan program for small merchants was provided within the first two months and some KRW32.5 trillion in special lending support for SMEs and middle market enterprises was provided in excess of the original target amount of KRW29.1 trillion. Since April, the financial authorities, local lenders and other relevant institutions were able to systematically respond to the crisis by holding financial risk assessment meetings thirty-one times.With regard to the protracted pandemic situation and the next year’s financial policy direction, Chairman Eun stressed the importance of strict compliance with virus prevention measures and urged cooperation from all financial sectors. As the COVID-19 pandemic continues to place burdens on small merchants and SMEs, Chairman Eun indicated his intention to focus on the vulnerable sectors.Chairman Eun also pledged to preemptively manage risks emanating from abundant market liquidities by preventing concentration of liquidities in high risk assets and promoting an orderly deleveraging.Finally, Chairman Eun called for financial institutions to take a leading role in the country’s transition toward a “first mover” economy in the post-pandemic era, highlighting the importance of their active participation in the government’s New Deal initiative and carbon neutral goal for 2050.* Please refer to the attached PDF for details.
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Dec 21, 2020

Open Banking Available from Mutual Finance & Securities Firms

The FSC announced the availability of open banking services from five mutual finance businesses, the Korea Post and thirteen securities companies starting from December 22.During the first half of 2021, savings banks and credit card companies will also join the open banking system.In addition, from January 1, 2021, open banking inquiry fee levels for participating institutions will be reduced to one third of the previous levels.With more types of financial institutions joining the open banking system, it will help promote competition and improve consumer convenience.* Please refer to the attached PDF for details.
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