Press Releases - Financial Services Commission

Press Releases

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Dec 21, 2020

Plans to Improve Rules on Market Makers & Tighten Monitoring of Illegal Short Sale Trades

The FSC introduced measures to improve market maker rules and strengthen detection of illegal stock short-selling activities on December 21 with an aim of boosting accountability in the market and establishing an effective monitoring system for illegal short sale activities. BACKGROUND The National Assembly passed a revision bill to the Financial Investment Services and Capital Markets Act on December 9, which introduces stricter penalties on illegal short sale activities. Along the same line, the government has prepared the following measures to improve rules on market makers and to strengthen monitoring of illegal short sale activities in order to boost accountability and develop a more effective system for market supervision. KEY MEASURES I. IMPROVING RULES ON MARKET MAKERS Marker makers quote prices on both buy and sell sides to satisfy the market. The marker maker system was first introduced in the derivatives markets in 1999 and then in stock markets in 2005. Recently, however, there have been concerns about the possibility of the abuse of the system as the trade volume of market makers has grown significantly as well as their short sale orders. In this regard, the Korea Exchange has conducted inspections on market makers compliance with short sale regulations, covering their transactions data from January 2017 to June 2020, and has found a few suspicious cases of naked short selling and violation of the uptick rule. To address this problem, the following measures have been drawn up to help restore confidence in market makers and foster their market making function. a) Introduce restrictions on short sale trades - Ban market makers short selling of mini-KOSPI 200 futures and options (when acting in their capacity as market makers) - Discontinue the uptick rule exemption for market makers in stock markets to address the issue of unfairness - Develop an automated monitoring and detection system for naked short selling activities and violation of the uptick rule
Nov 26, 2020

FSC to Work on Preventing Economic Shocks and Managing Financial Market Risks

Vice Chairman Doh Kyu-sang held the 30th financial risk assessment meeting via teleconference on November 26 to check the implementation of the COVID-19 emergency financial support programs. At the meeting, Vice Chairman Doh also discussed the current financial market conditions and potential risks, credit lending in the banking sector and the government’s plans to extend the period of support available for vulnerable debtors.The following is a summary of Vice Chairman Doh’s remarks.(CURRENT ECONOMIC CONDITIONS) In November, consumer confidence and business survey index rose while exports increased for a second consecutive month. KOSPI rose to a record high of 2,617.76 points on November 24 on strong foreign net buying. The corporate bond and short-term money markets also show signs of stability. The low-rated corporate bond and CP purchase program (SPV) launched in July helped to improve market conditions. While considering the past performance and market conditions, the FSC will decide in December whether to extend the operation of the SPV beyond its initial six-month period.(POTENTIAL MARKET RISKS) The Korean economy and domestic financial markets have shown speedy recovery from the pandemic due to the government’s aggressive stimulus programs and abundant liquidity supply. However, household loans have expanded more rapidly in that process. Amid an ultra-low rate environment, high-yield hunting in stock and real estate markets and more recently in cryptocurrencies may pose risks. The resurgence of COVID-19 infection cases throughout the world may hold back economic recovery and the uncertainty surrounding major economies’ stimulus measures also pose risks. Against this backdrop, the FSC will work to ensure an effective management of household debt and closely monitor the flow of capital into high-risk assets.(RECENT TRENDS IN CREDIT LENDING) Since the FSC announced the measures to curb credit lending on November 13, the growth of credit loans in the bank
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Oct 14, 2020

Government Reviews Financial Policy Agenda for Post-pandemic Era

Vice Chairman Sohn Byungdoo held the 25th financial risk assessment meeting via teleconference on October 14 and reviewed financial policy tasks for the post-pandemic era. The policy agenda focuses on four key areas—(a) supporting innovation-driven growth, (b) promoting digital finance, (c) expanding support for inclusive finance and (d) ensuring stability in the financial system.The following is a summary of Vice Chairman Sohn’s remarks.(NEED TO PREPARE FOR POST-PANDEMIC ERA) In response to the pandemic-induced economic shocks, the government has provided emergency financial support for small merchants and businesses. However, the disruption caused by COVID-19 may be just beginning. With global supply chains being reshuffled, contactless, medical, bio and green industries are becoming more prominent. This type of restructuring is also inevitable in the financial industry. There are also growing concerns about a deepening wealth gap between the haves and the have-nots. Potential risks in financial sectors, such as growing appetite for riskier and higher yield products as well as rising debt, have been accumulating. These are all the reasons that financial policies should account for the preparation of the post-COVID-19 era.(FINANCIAL POLICY AGENDA FOR POST-PANDEMIC ERA) The policy agenda announced on July 24 includes (a) supporting innovation-driven growth, (b) promoting digital finance, (c) expanding support for inclusive finance and (d) ensuring stability in the financial system. First, with regard to the first policy agenda, the government has been providing targeted financial support to innovative and promising businesses. Under the government-wide initiative to develop a thousand innovative firms, a total of thirty-two businesses have been selected with KRW211.1 billion in lending support being provided to sixteen of them. In November, more than 168 additional firms in the future car, biochemical and high-tech medical device industries are expected to be se
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Sep 24, 2020

FSC Adds 5 More 'Innovative Financial Services' to Regulatory Sandbox

The FSC added five more 'innovative financial services' to the regulatory sandbox on September 23, bringing the total number of designated services to 115 since the sandbox program was first launched on April 1, 2019.Five credit card companies (Shinhan Card, KEB Hana Card, Woori Card, KB Kookmin Card and Lotte Card) will be granted regulatory exemptions to provide small-sum overseas remittance services for non-residents or foreigners.The service is expected to be launched after March 2021. The government expects that the newly available service will improve consumer access to low-cost overseas money transfer services while promoting competition and innovation in the industry.* Please refer to the attached PDF for details.
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Aug 27, 2020

FSC Chairman Discusses Improving Rules for Retail Investors

FSC Chairman Eun Sung-soo met with the heads of the Korea Financial Investment Association and major securities firms on August 27 and held talks on the current market situation, temporary ban on stock short sale, improving rules for retail investors and channeling liquidity to the real economy sectors.(CURRENT MARKET SITUATION) With the recent resurgence in COVID-19 cases, volatility has increased in stock markets. However, compared to other major economies, the stock markets in Korea have shown a tendency of faster recovery. In the recovery process, retail investors have been strong net buyers. Overseas observers attributed this rapid recovery in Korea’s stock markets to successful pandemic response and market trust for the stability of the country’s macroeconomic conditions and corporate performances. In this regard, the six-month short sale ban put in place from March 16 until September 15 may have contributed in maintaining the stability of investor sentiment for retail investors.(TEMPORARY BAN ON SHORT SALE) The six-month temporary ban on stock short-selling is scheduled to expire on September 15. Public hearings and discussions on whether to extend the short sale ban revealed that the short sale system needs to be improved. In particular, there are legitimate concerns about the legality of short-selling activities involving institutional and foreign investors while the system is less accessible by retail investors. This suggests that the public demand for more transparency and fairness in opportunities also exists on the issue of stock short sale. Measures to strengthen sanctions and penalties on illegal short-selling activities are pending at the National Assembly. In addition, the government will reexamine the role of market makers while considering their side effects. The government also plans to look into ways to promote short sale for retail investors as it expands the horizon of opportunities.(IMPROVING RULES FOR RETAIL INVESTORS) To achieve a stabl
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Aug 20, 2020

FSC Seeks Innovation in Financial Regulations through Regulatory Sandbox Program

The FSC announced recent progress in the operation of the financial regulatory sandbox on August 20. Through its sandbox program, regulatory improvements were made to eight specific areas with five more currently in the process of revision and fourteen more recognized as necessary for reform.The FSC will continue to promote regulatory innovation through its sandbox program to facilitate a digital transformation in the 4th industrial revolution and for the post- pandemic economy. The FSC will work to remove regulatory obstacles and ensure a steady operation of the sandbox designated ‘innovative financial services.’BACKGROUNDThe FSC has been operating a financial regulatory sandbox program since April 1, 2019 to promote competition and innovation in the financial industry. A total of 110 ‘innovative financial services’ have been designated to be included in the sandbox until now. While providing consumers with opportunities to experience more innovative financial services, the sandbox program offers more business opportunities to financial institutions, fintechs and start-ups. At the same time, the sandbox also allows a reassessment of regulations in the financial sector in a more proactive manner.The 110 sandbox designated ‘innovative financial services’ are granted exemptions from 62 financial regulations, of which improvements have been made to eight areas, revisions are taking place in five areas and plans for making improvements are being drawn up for fourteen areas.REGULATORY IMPROVEMENTS► Revision completeda) Rules on the supervision of insurance businesses revised to simplify the process of insurance renewal (Oct 2019)b) Credit Information Use and Protection Act revised to (i) break down the uniform credit bureau business category into three specific sub-categories and lower entry barriers and (ii) allow credit card companies to operate own credit bureau businesses (Feb 2020)c) Credit Information Use and Protection Act revised to (i) allow credit
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Aug 05, 2020

30-Day Extension of Reporting Deadline Granted to 15 Companies

The Securities and Futures Commission decided on August 5 to lift administrative sanctions and grant a 30-day extension of reporting deadline to all fifteen companies that applied for sanctions exemptions due to pandemic-related disruptions in their business operation. Following the SFC’s decision, the semi-annual reporting deadline for eleven domestic companies and four KRX-listed foreign companies will be extended for 30 days from August 14 to September 14 and from August 31 to September 28, respectively.* Please refer to the attached PDF for details.
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Jul 30, 2020

Plans to Improve Rules on Structured Products

The FSC announced its plans to improve rules on retail structured products on July 30, with an aim to strengthen securities firms’ preparedness for market volatility, to encourage reduction in the size of the issuance as well as diversified investment for hedge assets and to bolster investor protection measures.BACKGROUNDThe market for retail structured products has grown significantly as the continuing trend of low interest rates made them an attractive alternative to bank savings. Although the structured products have provided relatively high yields and helped individuals to expand their assets, various risk factors began to surface. For securities firms, large volume of structured product issuance and management pose significant burdens on their financial soundness and liquidity. These burdens also may create shocks in the foreign exchange market and short-term money markets. In addition, both distributors and investors often espouse misperception that structured products are safe and non-risky products even though market volatility may rise depending on the performance of underlying assets. Therefore, it is necessary to draw up measures that will help minimize risks to securities firms, financial markets and investors.OVERVIEW OF STRUCTURED PRODUCTS(BALANCE) The outstanding balance of ELS, ELB, DLS and DLB issuance surged from about KRW22 trillion in 2010 to KRW108.6 trillion at the end of April 2020, maintaining an above KRW100 trillion level since 2016. About 60 percent of them are non-principal-protected structured products (ELS and DLS), accounting for KRW64.6 trillion. ELS and ELB (tracking stock indexes) account for 70 percent, or KRW75 trillion.(DISTRIBUTION) For ELS investment, retail investors made up about 98 percent, or KRW40.4 trillion at the end of March 2020. About 82 percent of all ELS issuance, or 88 percent of ELS issued to retail investors were distributed through banks.(RISK FOR SECURITIES FIRMS) Structured products make up increasingly larg
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Jul 27, 2020

FSC Announces Plans to Promote Digital Finance

The FSC unveiled its plans to promote digital finance on July 24, focusing on improving regulations for the industry, ensuring strong protection for digital finance users, building foundations and infrastructure to facilitate large volumes of digital financial transactions and strengthening data security to ensure stability in the financial system.BACKGROUNDDigital finance as a major ‘untact’ industry has grown significantly with the development of simple payment and money transfer services, authentication technologies and platform businesses. With the introduction of new technologies and the expanded use of e-commerce and telecommuting, digital transformation of the financial industry has been accelerated. The convergence of digital finance with ICT sectors and platform businesses will not only lead the transformation toward a digital economy but also help enhance financial inclusiveness.Recognizing the significance of digital finance, major economies have made changes to their regulatory framework to promote competition and innovation. Meanwhile, the Electronic Financial Transactions Act in Korea has not seen major updates since it was first enacted in 2006. As such, the current regulatory framework cannot fully accommodate the changes taking place in the financial industry which pose the following obstacles—a) relatively high entrance barriers for innovative electronic financial business entities, b) lack of strong user protection measures to guarantee safety in digital transactions and earn consumer trust, c) need for new infrastructure fit for new financial environment, and d) need to ensure financial data security.With the revisions to the Electronic Financial Transactions Act, the FSC will boost both convenience and safety of digital finance users, promote innovation and competition in the financial industry, and contribute to the government’s digital new deal initiative.KEY POLICY AGENDAI. PROMOTE GROWTH OF INNOVATIVE DIGITAL FINANCE PLAYERS (INDUSTR
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Jul 16, 2020

FSC to Work on Enhancing Transparency in Financial Regulatory Environment

FSC Chairman Eun Sung-soo presided over the 43rd financial hubs establishment committee meeting on July 16, and discussed ways to reassess the government’s financial hub policy following recent changes in market environments at home and abroad.The following is a summary of Chairman Eun’s remarks.The competition over the status of regional financial center in Asia has been accelerating. The Korean government has been pursuing its financial hub policy since it first unveiled the strategy in 2003 to turn Korea into a financial hub in Northeast Asia. However, due to increasing uncertainties in the global financial markets, financial companies have been reducing the number of overseas branches, and it has become more difficult to attract foreign based financial companies in Korea.Despite difficulties, it is important to regroup strategies based on the strength of our financial industry and renew our efforts. In this regard, the rising demand for asset management and growth in foreign investment continue to accelerate the globalization of the asset management industry. In addition, the rising demand for development finance in neighboring countries provides new opportunities for Korea through the government’s new northern and southern economic cooperation initiatives.Compared to other major financial centers in Asia, high corporate and income tax rates, lack of flexibility in labor markets and that of transparency in financial regulations have been pointed out as obstacles for Korea in becoming a major financial center in the region. From the perspective of macroeconomic management, the government’s capacity to change its tax or employment rules just for the purpose of advancing its financial hub policy will be limited. In the meantime, the government will work to enhance transparency in our regulatory environment and find innovative ways to improve competitiveness of our financial industry.* Please refer to the attached PDF for details.
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Jun 24, 2020

FSC Changes Rules on Liquid Asset Requirements for Repo Transactions

The FSC revised the regulations on financial investment business on June 24, laying out specific liquid asset requirements for the sellers of repurchase agreements.The FSC has been pursuing changes in regulations to improve the effectiveness and soundness of the repurchase agreement (repo) market. The revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act in December last year introduced a legal basis to require repo sellers (borrowers) to hold liquid assets. The changes in regulations adopted today are a follow-up measure, establishing the specific scope of liquid assets as well as holding requirements.SCOPE OF LIQUID ASSETSLiquid assets include cash, savings accounts, certificates of deposit, liquid loan commitments, readily disposable deposits of securities companies, up to 30 percent of money market trust (MMT) and money market wrap (MMW), promissory notes, payment reserves of the Bank of Korea. Liquid assets in foreign currencies also qualify.LIQUID ASSET HOLDING REQUIREMENTSThe requirements for liquid asset holding for repo sellers (borrowers) will gradually increase in three stages as shown in the table below from up to one percent of the transaction amount in July to up to ten percent between August 2020 and April 2021, and then to up to twenty percent thereafter.The above changes in regulations will go into effect on July 1, 2020 along with the improved rules on minimum margin requirements for repo buyers (lenders).* Please refer to the attached PDF for details.
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Jun 18, 2020

Vice Chairman Holds Meeting to Review Risks in Financial Sectors

Vice Chairman Sohn Byungdoo held a meeting to review market conditions and risk factors in the financial industry on June 18 with experts from the public and private sectors.The following is a summary of Vice Chairman Sohn’s remarks.(END-OF-QUARTER-EFFECT IN JUNE) In March, the global spread of the COVID-19 infection, rising instability in financial markets and the end-of-quarter shortage in capital supply led to difficulties in the corporate bond and short-term money markets. In response, the government launched various financial support and liquidity injection measures, including a bond market stabilization fund and an SPV to purchase lower-rated corporate bonds and CP. As a result, the markets have begun to show signs of recovery with yield spreads growing at a slower rate.However, blue chip companies and non-blue chip companies face different conditions for issuing bonds. In June, a total of KRW68 trillion worth of corporate debt will be up for maturity (KRW12.2 trillion in corporate bonds and KRW55.5 trillion in CP and short-term debt). About 90 percent of them are high rated debt and will face not much obstacle in meeting debt obligation. The securities firms with margin call obligations related to equity-linked securities are maintaining foreign currency liquidity in case of global stock price fall. Thus, the liquidity problem is not a major concern.The government will temporarily ease the liquidity requirements of repo sellers to prevent a surge in cash demand at the end of June. The government will also provide support through policy banks’ corporate bond and CP purchase programs.(INVESTOR PROTECTION WITH DERIVATIVES PRODUCTS) With investors’ interest in derivatives products growing, the volumes of FX margin trading and CFD transaction by retail investors have increased significantly this year. For FX margin trading, the proportion of retail investors is very high at about 92 percent, despite the implementation of various measures, such as stricter ru
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Jun 17, 2020

FSC Maintains Close Market Monitoring in Wake of North's Provocation

Vice Chairman Sohn Byungdoo held a market monitoring meeting on June 17 prior to the market opening to review market conditions in the wake of North Korea’s bombing of the inter-Korean liaison office building yesterday.Despite a momentary spike in offshore forward exchange rate, volatility has largely subsided including in major stock markets around the world and in Korea’s credit default swap premium for 5-year foreign exchange stabilization bonds.Experts at home and abroad see that North Korea’s provocation will have limited impact on the financial markets, while suggesting the need to keep a close eye on future developments.Amid rising volatility in stock markets and growing concern over another spread of COVID-19, the government will intently monitor market conditions and watch out for any spillover effects from geopolitical risks while preparing appropriate responses.* Please refer to the attached PDF for details.
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May 18, 2020

Vice Chairman Holds Meeting on Measures to Improve Asset-backed Securities Market

FSC Vice Chairman Sohn Byungdoo held a meeting with industry officials and experts on May 18 to discuss ways to improve the asset-backed securities market.The following is a summary of Vice Chairman Sohn’s remarks.(IMPORTANT ROLE OF ASSET-BACKED SECURITIES) The asset-backed security (ABS) provides businesses with a great means to raise funds and offers more favorable terms than credit-based financing. Businesses are able to treat securitized assets off-the-book for accounting purposes, which helps to improve their financial structure. The ABS allows businesses to securitize diverse assets including future assets and intellectual property rights to generate funds needed for now. In Korea, the enactment of the Asset-backed Securitization Act in 1998 contributed to clearing troubled assets and helped ride out the foreign exchange crisis. Since then, the ABS has been used as an innovative means to raise funds by enterprises and financial companies.(IDENTIFYING PROBLEMS) (a) With regard to risk management, the rapid expansion of the unregistered securities market can be a risk factor as it is difficult to identify the issuing entity, records of underlying assets and securitization structure. In particular, the real estate project financing asset-backed commercial paper (ABCP) poses problems for securities firms as they have to take the burden of refinancing risk due to a duration mismatch between fund raising and fund management. (b) The role of ABS in corporate financing has also been in decline. Over the years, the ABS market’s focus has been shifting toward transactions that follow interest margins. Due to the delayed reforms in the registered securities system, the current ABS market has been unable to fully accommodate diverse securitization demand in the market.(MEASURES FOR IMPROVEMENT) (a) To enhance risk management, the government will introduce the risk retention rule, requiring asset holders to possess about 5 percent of credit risk to prevent conflict of
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May 18, 2020

Measures to Improve ETF and ETN Markets

The FSC announced the measures to improve the exchange-traded fund (ETF) and exchange-traded note (ETN) markets on May 15, which seek to contain overheated investment demand and mitigate excessive concentration on particular investment products.The measures are aimed at (a) preventing indiscriminate investment behavior in ETF and ETN markets by requiring minimum deposits and mandatory online education for retail investors, (b) improving brokerage firms’ management of disparate ratios to minimize investor damages from speculative demand, and (c) creating an environment for the development of diverse investment products to break up excess demand on particular instruments.BACKGROUNDETFs and ETNs are exchange listed investment products structured to enable diversification of investment for retail investors in traditional investment assets, such as stocks and bonds, and to allow small-sum investing in a variety of alternative assets including foreign exchanges and commodities.The ETF market has grown as a major publicly offered fund market and ETNs have provided a niche market where ETF offering remained difficult. Recently, there has been excessive concentration toward leveraged ETFs and ETNs amid the COVID-19 pandemic-induced market volatility. After the collapse of international oil prices, investors flocked to major oil ETFs and ETNs with an expectation for a rebound in oil prices, thereby raising the potential for losses. Trend followers who lack information about the risk characteristics of these products also flocked to invest in oil ETFs and ETNs, artificially pushing up trading prices well above their intrinsic asset values. A series of investor alerts and cautions by securities companies, the Korea Exchange and the FSS as well as transaction suspensions have been issued, but they have yet to successfully curb the overheated demand. Thus, the financial authorities drew up measures to cool overheated investor demand and more effectively manage markets.RECENT IS
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May 18, 2020

FSC Unveils 5th Plan for Financial Hub Policy

The FSC unveiled the 5th three-year plan for Korea’s financial hub policy (2020-2022) on May 15. The specific strategies include pursuing regulatory reforms to promote private sector-driven innovation, building infrastructure to continue innovative growth in the financial industry and adopting a ‘selection and concentration’ approach to build global capacity with a particular attention paid to the ASEAN markets.To accomplish these goals, the FSC adopted three key sectoral tasks—(a) supporting financial sectors that have comparative advantages, (b) developing financial infrastructure on a par with global standards and (c) providing effective support for financial hubs.Since 2008, the FSC has drawn up three-year plans for Korea’s financial hub policy, maintaining a consistent policy direction while effectively responding to rapid changes taking in the industry.KEY TASKSI. SUPPORT FINANCIAL SECTORS WITH COMPARATIVE ADVANTAGES(FINTECH INNOVATION) Foster the fintech industry through adequate funding support and creating a virtuous cycle between the financial regulatory sandbox program and regulatory reforms(ASSET MANAGEMENT MARKET) Promote pension fund management services and facilitate innovation in the asset management sector through improvements in regulations(PUBLIC FUNDS’ OVERSEAS INVESTMENT) Have the National Pension Service (NPS) and Korea Investment Corporation (KIC) boost their overseas investment as well as their contribution to the growth of the domestic asset management industry II. DEVELOP FINANCIAL INFRASTRUCTURE ON PAR WITH GLOBAL STANDARDS(DATA USE) Establish legal and institutional frameworks to promote a widespread use of big data in the financial industry(ANTI-MONEY LAUNDERING) Improve the regulatory framework on anti-money laundering scheme on a par with global standards and strengthen capacity to combat money laundering(FOREIGN EXCHANGE SYSTEM) Ensure smooth overseas transactions by improving user convenience in foreign exchange transacti
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May 14, 2020

Overview of Financial Regulatory Sandbox

The FSC has been operating a financial regulatory sandbox program since April 1, 2019 to promote competition and innovation in the financial industry and provide more benefits to consumers.OVERVIEWA total of 102 ‘innovative financial services’ have been designated so far through fourteen evaluation committee meetings. Under the regulatory sandbox program, the designated firms are granted exemptions from licensing and other sales regulations for up to four years. The evaluation is based on the level of innovativeness, potential contribution to consumer convenience, and the soundness and feasibility of business plan.Among the 102 designated service providers, fintech firms (54 cases, 53%) made up a majority, followed by financial institutions (39 cases, 38%), IT firms (6 cases, 6%) and public sector institutions (3 cases, 3%).By service types, banks were most numerous (16 cases), followed by insurance services (15 cases), capital markets-related services (15 cases), loan comparison services (14 cases), payment cards (13 cases), data services (12 cases), electronic finance (11 cases), foreign exchange (3 cases) and others (3 cases).As of now, 36 ‘innovative financial services’ are at the stage of market test with 66 more expected to be launched in the first half this year.FINANCIAL INNOVATIONINCREASING BENEFITS TO CONSUMERS: a) The shift away from a supplier-driven market toward a more consumer-oriented environment has lowered costs for financial services in the form of interest payments, insurance premiums, etc., b) With the launching of easy-to-use financial services in everyday life, consumer access to financial services has been improved, c) Development of specific services tailored to the needs of SMEs and small-scale businesses has helped extend more financing opportunities to those that had been traditionally unable to access financial services, d) Innovative financial services have contributed to addressing various social problems in the areas of renewa
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May 11, 2020

2020 Online Korea Fintech Week to Start May 28

The FSC will hold the 2020 Online Korea Fintech Week from May 28. With the theme of “Fintech for Open Innovation,” this year’s virtual expo will feature special information sessions, virtual exhibitions and an online job fair.The following is a schedule of the virtual expo.(OPENING SESSION) Welcoming remarks, congratulatory remarks by key dignitaries(SPECIAL SESSIONS) Key information sessions and seminars about open innovation, industry trends in domestic and foreign marketsa) FSC: Digital finance innovation in Koreab) FSS: Showcasing regtech and suptech firmsc) KPMG: Korean fintech industry in 2020 policy trendsd) World Bank: Digital finance for crisis response and economic development – Role of the WBe) VISA-Fintech Center Korea: Sharing a successful collaboration lesson between a global financial company and a fintechf) KFTC: Open banking – achievements and futureg) FSI: Financial data security in the era of 4th industrial revolutionh) KOSCOM: Financial cloud computing and compliance in financial services(ONLINE JOB FAIR) Co-hosted by the Fintech Center Korea and Korea Internet Security Agency and participated by 34 hiring institutions looking for 40 new hires(VIRTUAL EXHIBITIONS) The six virtual exhibition halls will be organized into a fintech ecosystem hall, a financial enterprise hall, a fintech start-up hall, a fintech scale-up hall, a big tech hall and a global enterprise hall, participated by about 150 firms(CYBER VOICE PHISHING PREVENTION HALL) Introduce voice phishing prevention app and the relevant technology and provide education on how to detect voice phishingFor further information, please contact the Fintech Center Korea via email at fintechweek@fintechcenter.or.kr or by phone at +82-70-4150-4490 and +82-70-8873-9006.* Please refer to the attached PDF for details.
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May 06, 2020

FSC's Revision Proposal Designates 7 Key Industries for Key Industry Bailout Fund

The FSC announced revisions to the enforcement decree of the Korea Development Bank Act on May 6, which designate seven specific industries to be eligible for the key industry bailout fund and establish necessary provisions for the fund’s operation. KEY REVISIONS(DESIGNATION OF KEY INDUSTRIES) The Korea Development Bank Act broadly defines key industries as those considered crucial to the real economy, stability of the job market and national security, such as defense industry, industries barred from foreign investment, etc., and prescribes that the designation of specific industries be carried out by enforcement decree. Through this amendement, the airline, maritime shipping, machinery, automobile, shipbuilding, electric power and communications industries will be designated as key industries. The FSC may include additional sectors upon request from the relevant ministers if funding support is deemed necessary.(ISSUANCE OF BONDS) The revisions to the enforcement decree established the necessary rules including the issuance of bonds, subscription, etc.(VOTING RIGHT) The KDB may exercise its voting right only in the following two exceptional circumstances to preserve the fund’s assets—a) decisions involving significant stakes to the value of equities and b) when a company receiving the support undergoes structural adjustment.(FUND MANAGEMENT COUNCIL) The 7-member council will consist of members recommended by the relevant standing committees of the National Assembly, government ministries and the KDB.SCHEDULEThe revisions to the enforcement decree of the Korea Development Bank Act will be finalized at a cabinet meeting after an examination by the Ministry of Government Legislation.* Please refer to the attached PDF for details.
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Apr 29, 2020

FSC Extends Guidelines on Supervision of Financial Conglomerates for Another Year

The FSC approved the revisions to the best practice guidelines on the supervision of financial conglomerates on April 29 and decided to extend its implementation for another year. KEY REVISIONS► CAPITAL ADEQUACY ASSESSMENT: a) Combine the ‘risk concentration’ and ‘risk transfer’ categories into a single unified framework for assessing capital adequacy requirements, b) Allow the application of domestic industry standards when assessing capital adequacy for foreign branches► INTERNAL CONTROL SYSTEM: Require financial conglomerates to establish a group-wide internal control system and standards for which a group-wide consultative body can be established to oversee the process► DISCLOSURE RULES: Have financial conglomerates disclose their group-wide risks every quarter starting with the risk information as of the end of 2019► OTHERS: a) Specify the designation of financial conglomerates subject to supervision to those with domestic financial companies with total assets amounting to KRW5 trillion, b) Specify the process of exemption, c) Extend the implementation of the guidelines for another year (May 1, 2020 to April 30, 2021)FURTHER PLANSThe implementation of the best practice guidelines will be extended for another year from May 1, 2020 to April 30, 2021, The financial conglomerates will disclose their group-wide risks at the end of September 2020The FSC will promote efforts to legislate the supervision of financial conglomerates as recommended by the IMF’s Financial Sector Assessment Program report on Korea.* Please refer to the attached PDF for details.
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