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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
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Apr 29, 2020
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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
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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
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Apr 01, 2020
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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
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Mar 20, 2020
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Mar 13, 2020
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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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Jan 15, 2020
- FSC to Hold 2020 Korea Fintech Week
- The Financial Services Commission will hold the 2020 Korea Fintech Week from May 28 to 30, 2020 at Dongdaemoon Design Plaza (DDP), Seoul to promote fintech and innovation in the financial industry. BACKGROUND The FSC hosted Koreas first global fintech expo in 2019, providing opportunities for networking and information sharing on the latest trends in fintech. The three-day event was attended by more than 10,000 people. Connecting fintech firms with both domestic and foreign investors, the 2019 Korea Fintech Week attracted about KRW30 billion worth of investment in fintech businesses. 2020 KOREA FINTECH WEEK This years Korea Fintech Week is aimed at supporting fintech scale-ups. It will be held under the theme of Fintech for Open Innovation. Centered on the governments policy to support fintech firms to scale up,1 the three-day expo will feature programs, such as seminars, special sessions, educational programs, idea contest exhibition, etc. REGISTRATION SCHEDULE Preliminary application for participation in the 2020 Korea Fintech Week will be available starting from the second week of April through www.fintechweek.or.kr/2020. For further information, please contact the Fintech Center Korea via email fintechweek@fintechcenter.or.kr or by phone +82-70-8873-9005, 9006. * Please refer to the attached PDF for details.
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Jan 09, 2020
- Joint Response Unit on Financial Markets Holds First Meeting
- FSC Vice Chairman Sohn Byungdoo presided over the first meeting of the joint response unit on financial markets on January 9, 2020 to assess the impact of the recent Middle East instability on domestic financial markets. The officials from the relevant ministries and public institutions as well as private sector experts attended the meeting.The following is a summary of Vice Chairman Sohn’s keynote address:BACKGROUNDThe escalating conflict between the US and Iran has led to increased financial market volatilities both at home and abroad. Following President Donald Trump’s announcement not to seek further military action against Iran, the US stock market closed higher yesterday with Dow Jones adding 0.56% and SP500 gaining 0.49%. However, there are lingering uncertainties and the government has been preparing contingency plans considering all possible scenarios.On January 8, the government set up a joint response system in order to more systematically respond to situations. Today’s meeting on financial markets is one of the five thematically organized units.1DOMESTIC FINANCIAL MARKETSThe domestic financial markets have fluctuated recently2 against the backdrop of the US-China first phase trade agreement and the recent instability in the Middle East. Despite increased market volatilities following the uncertainty in the Middle East, it is necessary to remain calm and prudent.Korea’s external soundness remains solid as the net foreign assets in debt instruments (USD 479.8 billion) and the foreign exchange reserves (USD 408.8 billion) posted record highs in 2019. Given a low level of Iranian funds in domestic stock markets, the possibility of capital flight or damages to the financial soundness1 Five joint response units: financial markets, international oil prices, real economy, overseas construction and overseas logistics2 KOSPI: Jan. 6 (2,155.1, -0.98%) → Jan. 7 (2,175.5, +0.95%) → Jan. 8 (2,151.3, -1.11%)USD/KRW FX rate: January 6. (1,172.1, +5.0 won)
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Dec 23, 2019
- FSC Reforms Non-Face-to-Face Customer ID Guidelines for Corporations and Foreigners
- The Financial Services Commission unveiled a revised guideline for non-face-to-face customer identification on December 20, which is aimed at promoting online financial transactions by corporations and foreigners.BACKGROUNDThe non-face-to-face customer identification was first introduced to the banking sector in December 2015 for the purpose of improving consumer convenience. It was a major shift from the face-to-face identification method which had been in place for more than 20 years since the implementation of the real name financial transactions in August 1993. In February 2016, the non-face-to-face identification expanded to the non-banking sector (e.g. financial investment business and mutual banks).In January 2017, the FSC allowed corporations to open a new bank account though non-face-to-face customer identification; however, for corporations, only one representative could be identified through non-face-to-face identification method to prevent financial crimes, such as identify theft.Since its introduction, the number of new bank accounts opened through non-face-to-face customer identification has continued to increase. CHANGESFor corporations, opening a new corporate bank account by legal representatives, such as an employee or a board member, through non-face-to-face customer identification will be permitted. Legal representatives must present a power of attorney to financial companies for verification purposes.For foreigners, the alien registration card may be used to verify identity when opening a new bank account through non-face-to-face customer identification.SCHEDULEThe changes will go into effect on January 1, 2020, although each financial institution will determine whether and when to adopt non-face-to-face customer identification service for corporations. In January 2020, banks and financial investment sectors will draw up operational guidance in that regard.* Please refer to the attached PDF for details.
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Dec 19, 2019
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Dec 04, 2019
- Measures to Promote Fintech Scale-ups
- The FSC announced measures to promote fintech scale-ups on December 4, which includes 24 key tasks in 8 different policy areas.BACKGROUNDThe government has been promoting the fintech industry as part of its innovation-led growth strategy amid digital transformation and the 4th industrial revolution. To this end, the government has introduced a financial regulatory sandbox, open banking, regulatory reforms and budget earmarks for fintech. In order to further develop Korea’s fintech industry and its ecosystem, the government plans to implement the following fintech scale-up strategies, which builds upon the progress made so far.KEY MEASURESI. IMPROVING THE CURRENT REGULATORY SANDBOX SYSTEM► Designate more than 100 ‘innovative financial services’ by the end of March 2020, which marks the one-year anniversary of launching the regulatory sandbox► Improve rules and practices in operating the regulatory sandbox: (i) protect innovative ideas and technologies through patents and intellectual property rights (e.g. providing legal counsel or expediting patent dispute resolution); (ii) impose a minimum level of additional requirements on ‘innovative financial services;’ and (iii) grant continuation of designation status through MA► Provide continuous support (e.g. costs on testing, security inspection, office space, etc.) for the entire cycle from designation of ‘innovative financial services’ to commercialization of innovative financial solutions.► Set up a supervisory framework tailored to the promotion of fintech firms – e.g. conducting supervision and inspection aimed at providing counseling or establishing regulatory grounds to grant fintech firms immunity in case of minor violations.II. PERFORMING REGULATORY REFORMS TO FACILITATE FINTECH DEVELOPMENT► Promote a flexible and dynamic regulatory environment where testing of ‘innovative financial services’ can lead to commercialization and ultimately to an improvement in regulatory reforms.► Con
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Nov 06, 2019
- FSC Designates Additional Financial Solutions as 'Innovative Financial Services'
- The FSC designated seven additional financial solutions as ‘innovativefinancial services’ to be accepted into financial regulatory sandbox. As of November6, the FSC has designated a total of 60 such services.Overview of Newly Added ‘InnovativeFinancial Solutions’1. An online-based paperless application solution for business-relatedinsurance products, such as fire or disaster liability insurance (Samsung Fire MarineInsurance)2. An online payment service which allows buyers of used goods topre-charge e-points with their credit cards and transfer e-points to sellers asa means of payment when purchasing used goods directly from the seller in onlinee-commerce platform (KBKookmin Card)3. A monthly wage payment solution which uses mobile location datato log individuals’ work hours and allows workers to receive wages prior to themonthly payday through an escrow account (Emmaus)4. An automated intellectual property report solution which analyzesthe economic value of intellectual properties using big data and artificialintelligence, and forward the information to financial institutions (Wisdomain)56. An alternative credit evaluation service for individuals,business owners and SMEs, which utilizes non-financial information, such as profitrecords, types of business, number of days in operation and so on, to analyzeand provide alternative credit rating system for small businesses (BC Card, KB Kookmin Card)7. A small sum investment platform which allows individualinvestors to trade small amounts in foreign stocks and diversify portfolios (Korea Investment Securities)
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Oct 31, 2019
