Press Releases - Financial Services Commission

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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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Apr 29, 2020

Foreign Currency Asset Limits Raised for Insurance Companies

The revisions to the Insurance Business Act passed the National Assembly on April 29, which increase the cap on foreign currency assets for insurance businesses. The revisions will go into effect six months after promulgation.KEY REVISIONS► FOREIGN CURRENCY ASSET MANAGEMENT: The current cap on insurance companies’ management of foreign currency assets will be increased from 20~30 percent to 50 percent for both general and special accounts in order to grant more autonomy in asset management.► ADEQUATE UNDERSTANDING BY CONSUMERS: Under the current law, insurance policies are the only document subject to evaluation to see how well consumers understand the documents. The revised law will also include pre-contractual information package to ensure more adequate understanding of insurance policies by consumers.► PENALTY RULES: For the failure of notifying consumers the right to request a lowering of interest rates, the revised law will impose a fine on the insurance company, not on the board members of the company to make the penalty rules more equitable with those of savings banks and credit finance businesses.* Please refer to the attached PDF for details.
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Apr 29, 2020

Revised Law Paves Way To Create Bailout Fund for Key Industries

The revisions to the Korea Development Bank Act passed the National Assembly on April 29, establishing a legal foundation to launch a bailout fund to help key industries struggling from the COVID-19 pandemic.KEY PROVISIONS► SUPPORT TARGETS: Businesses within industries that are considered crucial to the real economy, stability of the job market and national security, such as defense industry, industries barred from foreign investment, industries crucial for emergency resources, key technology industries, essential public service providers, etc. ► FINANING FOR FUND: KRW40 trillion state-guaranteed bond issuance► CONDITIONS: Aid recipients shall be subject to following requirements—a) both the management and employees will work toward maintaining employment, b) aid-receiving businesses shall come up with own funding sources within a 20 percent of the amount of aid, and c) businesses shall work to improve management while refraining from diviend payouts, share buybacks and executive compensation.► MANAGEMENT: a) Aid will be provided through loans, payment guarantees and investments according to the specific needs of industries and businesses, b) The fund shall be managed by the Korea Development Bank for five years until December 31, 2025, and a council shall be established at the KDB to ensure professionality, accountability and transparency of the fund management.FURTHER PLANSThe revisions to the Korea Development Bank Act are extected to take effect in May. The government will work on the changes to the relevant rules and regulations and draw up specific standards for aid provision to ensure prompt delivery of support to the businesses in need.* Please refer to the attached PDF for details.
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Apr 20, 2020

Plans for Temporary Easing of Financial Regulations in Response to COVID-19

The financial authorities announced on April 17 a set of temporary deregulatory measures on financial institutions’ capital adequacy, liquidity and asset quality requirements to help boost their financing capacity amid the COVID-19 crisis. The deregulatory measures are expected to pave the way for financial institutions to play a more active role in providing support to the real economy.BACKGROUNDThe international society including the G20 and the Basel Committee on Banking Supervision recognized the need for a more flexible application of financial regulations in response to COVID-19. The adoption of the Basel III standards in the aftermath of the 2007-2008 financial crisis has boosted the stability of financial institutions in crisis situations. But it also had an effect of constraining their ability to flexibly respond to crisis situations. Against this backdrop, the Financial Stability Board recently made a recommendation for more flexible application of regulations.In response to COVID-19, the Korean government has made available more than KRW100 trillion in financing support via financial institutions. The financial institutions at the forefront of delivering this emergency support package to businesses have been requesting an easing of such regulations so that they can increase their financing capacity to help support the real economy.TEMPORARY EASING OF FINANCIAL REGULATIONSThe deregulatory measures will be based on the four key principles—necessity, temporariness, promptness and effectiveness.I. REGULATIONS ON CAPITAL ADEQUACY► CONTRIBUTION TO STOCK MARKET STABILIZATION FUND: Banks, securities companies and insuance companies that are making contributions to the stock market stabilization fund will see lower risk weights for the amount of contribution they make.(Banks) Under the current regulations, banks’ investment in funds that have listed stocks as underlying assets should be assigned a 300 percent risk weight in principle. However, banks will b
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Apr 09, 2020

Fintech Innovation Fund to Invest More than KRW85.5 billion in Fintech Firms in 2020

The FSC announced on April 9 that the fintech innovation fund created in December 2019 will be put to use with direct investment expected in the amount of KRW20 billion in April this year. With many fintech firms expected to have troubles finding investment amid the COVID-19 pandemic, the FSC will continue to encourage effective and prompt investment through the fintech innovation fund.BACKGROUNDThe fintech innovation fund in the amount of KRW300 billion for a 4-year period (2020-2023) was created on December 23, 2019, led by major financial holding companies, banks and Koscom, to make more funding for investment available for innovative fintech firms. It is a fund of funds that provides tailored investments to fintechs from start-up to scale-up stages.For fintech start-ups with less than 5 years of experience, blind-pool feeder funds will be created for investment of about KRW150 billion. For scale-ups, project investment feeder funds will be established in the amount of KRW150 billion.Based on the future direction of fund management and market demand, the size of the fund of funds may be expanded to KRW500 billion over six years.PLANS FOR 2020A total of more than KRW85.5 billion in investment will be made available to fintech firms through the fintech innovation fund in 2020.► START-UPS: At least three feeder funds will be established with about KRW48 billion in investment. Korea Investment Partners and KB Investment have been selected as the designated fund management companies for this year with each managing KRW22.5 billion. In the second quarter, another fund manager will be designated for the management of a feeder fund specifically designed for a fintech accelerator or a foreign based fintech beginning in the fourth quarter.► SCALE-UPS: The first investment will be made in the amount of KRW20 billion to three fintech firms (big data, blockchain and foreign-based financial platform) in April and an additional investment of at least KRW17.5 billion will be
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Apr 06, 2020

Current Situation in Financial Markets and Government's Policies

WHAT ABOUT THE GOVERNMENT’S SUPPORT FOR LOW-GRADE CORPORATE BONDS AND COMMERCIAL PAPER NOT COVERED BY THE BOND MARKET STABILIZATION FUND?The bond market stabilization fund is aimed at supporting the issuance of investment-grade corporate bonds. If the Bank of Korea begins to offer lending support for non-bank financial institutions, it is expected to take some loads off the bond market stabilization fund, which may create some room for considering the purchase of certain types of low-grade corporate bonds as well.For low-grade corporate bonds and commercial paper, other financing support programs such as primary collateralized bond obligations (P-CBOs) are available through policy banks. It is the government’s policy to prevent bankruptcies due to a temporary liquidity shortage from COVID-19.PRIOR TO THE PROVISION OF FINANCING SUPPORT TO LARGE COMPANIES, WHAT SELF-RESCUE MEASURES SHOULD HAVE BEEN TAKEN?For businesses eligible to apply for the emergency support package, the government will make available financing support to all businesses regardless of their size or sector. However, the KRW100 trillion package cannot possibly cover all business financing demands.Unlike small merchants and SMEs, many large companies still remain capable of financing their businesses through market mechanisms. The corporate financing support programs in the past also required self-rescue efforts by large companies, including a requirement to pay a certain portion for refinancing their debt and to buy back a portion of securities in P-CBO programs.If it becomes necessary in the future, the government will draw up plans to further reduce the financing burdens for large companies.HOW DOES THE SUPPORT PACKAGE AFFECT THE SOUNDNESS OF THE FINANCIAL INSTITUTIONS?The soundness of the financial institutions remains strong currently. The banks’ BIS ratio and bad debt ratio improved compared with the previous crisis levels. In the process of the implementation of the emergency financial su
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Apr 01, 2020

FSC Adds 9 More Innovative Financial Services to Regulatory Sandbox at 1-Year Anniversary

The FSC added nine more innovative financial solutions to the financial regulatory sandbox on April 1, bringing the total number of ‘innovative financial services’ to 102 at the one-year anniversary of the launching of the regulatory sandbox program. FSC Chairman Eun Sung-soo stated that, despite the current adversity of COVID-19, the increased number of untact transactions in financial services, the advancement and convergence of big data and artificial intelligence and the expansion of cloud computing and IT security solutions will further accelerate innovation in the financial industry. While working to overcome the current adversity, Chairman Eun stressed the importance of cooperation between the government, fintech firms and all other market participants to continue to bring innovative solutions in the financial sectors.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. A corporate research institute tasked with RD projects focused on developing new financial technologies through cooperation with other fintechs and IT firms (KakaoBank)2. A mobile-based overseas stock investment platform which allows retail investors to make small-amount investments in foreign stocks (Qarasoft Mirae Asset Daewoo)3. A healthcare platform which connects health enhancement service providers and health insurance providers offering insurance plans which incentivize the use of health enhancement programs (SCOR Reinsurance)4. A non-recourse accounts receivable factoring service (Korea Credit Guarantee Fund)5. A small-sum overseas remittance service using automated currency exchange kiosks (Bellsoft)6. A personal tailored asset management service which tracks and analyzes users’ spending and saving patterns in real time (Rainist)7. A mobile-based insurance coupon issuance platform which offers prepaid insurance coupons at a discounted rate to be used in insurance premium payment in the future (Hyundai Marine Fire Insurance)89. One-stop online stock exchange platforms fo
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Mar 31, 2020

Loan Deferment Guidelines for SMEs and Small Merchants Hit by COVID-19

The FSC and the FSS along with all financial associations and federations adopted the guidelines for the loan extension of principal payments and the deferment of interest payments to be implemented beginning on April 1 for the SMEs and small merchants hit by COVID-19.The guidelines provide the minimum standard with which SMEs and small merchants can apply for financing support. Financial institutions may voluntarily apply more relaxed standards and expand the supporting targets.COMMON GUIDELINES► ELIGIBILITY: SMEs and small merchants directly or indirectly damaged by COVID-19 with no overdues, impaired capital or business closure► ELIGIBLE LOANS: Existing SME loans with maturity date of up to September 30, 2020, including guaranteed loans and foreign currency loans that have been issued prior to March 31, 2020. ► TERMS OF SUPPORT: A minimum of six months of maturity extensions and deferment of interest payments from the date of application regardless of the repayment method► APPLICATION METHOD: Applicants need to visit a branch of currently using financial companies for consulting. Or, depending on the company, non-face-to-face methods such as phone or fax can be possible.► APPLICATION PERIOD: April 1, 2020 ~ September 30, 2020ADDITIONAL GUIDELINES► INSURANCE COMPANIES: If policy loan holders qualify as SMEs or small merchants hit by COVID-19, they are also subject to the deferment of interest payments► SPECIALIZED CREDIT FINANCE BUSINESSES: Credit card loans, credit loans, secured loans, installment financing and leases will be subject to the deferment of interest payments, while credit sales, cash advance and loans, leases or installment financing for automobiles will not be included* Please refer to the attached PDF for details.
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Mar 23, 2020

FSC Designates 7 Additional Financial Solutions for Regulatory Sandbox

The FSC designated seven additional financial solutions as ‘innovative financial services’ to be included in the regulatory sandbox program on March 20, 2020. The FSC has designated a total of 93 ‘innovative financial services’ since the launching of the regulatory sandbox on April 1, 2019.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. A small sum foreign stock investment platform using reward points from affiliated businesses (Shinhan Investment Corp.)2. A financial fraud or scam detection service that provides information about possible voice phishing attempts for phone calls and text messages using telecommunications and financial information (Nice Information Service, SKT, KT, LG U+)3. A mobile-based local shopping voucher platform to promote the local economy (KT)4. A USIM-based mobile authentication process that allows individuals to register e-payment methods on their mobile devices for a simpler payment process (L Fin)5. A mobile-based paperless application solution for business-related insurance products, such as fire or disaster liability insurance (Hyundai Marine Fire Insurance)67. Online-based loan comparison platforms that offer a comparison on different loan products from various financial institutions (SK Planet Owrainfo Co.)* Please refer to the attached PDF for details.
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Mar 20, 2020

Vice Chairman Calls for Strengthening Information Sharing and Policy Cooperation

FSC Vice Chairman Sohn Byungdoo participated in the Financial Stability Board Steering Committee meeting which was held over a conference call on March 19, 2020. The steering committee meeting was held to check the effects of the COVID-19 outbreak in the global financial markets and share policy responses.The following is a summary of Vice Chairman Sohn’s remarks:The Korean government has been closely monitoring the effects of the COVID-19 outbreak on the financial markets. As the government has been working on preventive measures, the number of newly infected cases has declined. To minimize impact on the real economy, various policy tools have been applied from both the demand and the supply side. The Bank of Korea lowered the base rate to 0.75 percent and the government unveiled a KRW50 trillion additional financial support package.As capital outflows from emerging markets triggered foreign exchange market volatility, it is important to maintain stability through currency swaps between the U.S. and other countries.To minimize market instability, closer international cooperation and information sharing between countries are needed.* Please refer to the attached PDF for details.
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Mar 13, 2020

FSC to Ease Rules on Overseas Expansion of Financial Institutions

The FSC announced on March 12, 2020 its plans to revise the regulations on overseas expansion of financial institutions in order to ease regulatory burdens of operating overseas businesses and help boost their global competitiveness. The amendments will include streamlining the registration and reporting process and easing unnecessary requirements. The revisions will take effect gradually within this year in a two-pronged process.KEY FEATURESThe first stage amendments to the regulations include a) an expanded application of the ex post facto reporting rule for foreign direct investment, b) an improvement to the regular reporting process, and c) a simplified reporting rule for dissolving overseas businesses.I. EX POST FACTO REPORTING RULE FOR FDI(As is) In principle, all financial institutions are required to report their foreign direct investment activities before overseas investment takes place.(To be) Allow ex post facto reporting of new foreign direct investment for financial institutions with cumulative investment in the amount of USD30 million or less during the recent year.The government will work to maintain the stability in the FX market by reviewing the soundness of overseas investment businesses and through the imposition of penalties for businesses deemed to be substandard.II. IMPROVEMENT TO REGULAR REPORTING REQUIREMENT(As is) Financial companies are required to report the status of the establishment and operation of their overseas businesses to both the Financial Supervisory Service and the Bank of Korea once every three months.(To be) Financial companies will report the status of the establishment and operation of overseas businesses to the FSS once every year.The information provided to the FSS will be shared with the Bank of Korea.III. EX POST FACTO REPORTING RULE FOR DISSOLVING OVERSEAS BRANCHES(As is) When seeking dissolution of overseas business operations or making changes to the initial declaration, financial institutions are required to report
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Jan 28, 2020

Government Bolsters Market Monitoring amid Coronavirus Outbreak

FSC Vice Chairman Sohn Byungdoo convened a meeting on January 28, 2020 to assess the impact of the spread of coronavirus on the domestic and global financial markets. Amid rising concerns over economic and financial markets at home and abroad, the Korean government has put in place a response system, working on preventive measures and monitoring its impact on our economy.The following is a summary of Vice Chairman Sohn’s remarks:The financial markets in Korea remained stable until mid-January following the conclusion of the first phase deal between the US and China over their trade conflicts and due to eased tension in the Middle East. However, with the spread of the new coronavirus, volatility increased last week.Today, KOSPI fell 3.1 percent while the won-dollar exchange rate rose 0.7 percent (up 8.0 won).Based on our past experiences with the SARS (severe acute respiratory syndrome) outbreak in 2003, the avian influenza in 2009, and the Middle East respiratory syndrome (MERS) in 2015, the impact of the new coronavirus outbreak on domestic financial markets will depend on how extensive it spreads in Korea.The Korean financial markets may experience rising volatilities for a while due to increased appetite for risk-free assets.However, Korea’s external soundness remains solid as its foreign exchange reserves (USD408.8 billion by the end of 2019) and net foreign assets in debt instruments (USD479.8 billion by end of Q3 2019) increased to record high levels.In order to stabilize financial markets, the government should bolster the 24-hour market monitoring system and be prepared for any volatility. The government should also work to provide financial assistance to the industries that may be heavily affected by the epidemic, such as the tourism industry.* Please refer to the attached PDF for details.
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