Financial stability is a prerequisite to innovation and inclusive finance policies. FSC maintains close market monitoring for any signs of market volatility and works to ensure stability in the financial markets. There are risk factors originating from abroad and from within. FSC focuses on making our economy more resilient from external shocks, such as a disruption in the global supply chain, and supporting Korea’s material, component and equipment industries to help boost their global competitiveness. Internally, FSC is closely monitoring the trends in household debt and seeking reforms to corporate restructuring in order to prevent domestic risk factors from turning into systemic risks. Policies aimed at increasing financial stability also include enhancing fairness in the financial markets by introducing a comprehensive legal framework for the supervision of financial conglomerates, improving market discipline and promoting transparency in corporate disclosure and accounting practices.
Jul 22, 2021
- KoFIU Notifies Foreign VASPs of Their Obligation to Register
- With the Act on Reporting and Using Specified Financial Transaction Information (hereinafter the Act) going into effect from March 25, 2021, all VASPs are required to register their business with the KoFIU by September 24, 2021. As such, the KoFIU has sent out a notice to 27 foreign VASPs about their obligation to register. Obligations of Foreign VASPs The Act requires VASPs to register with the KoFIU as the law equally applies to foreign VASPs that conduct activities outside Korea but have domestic consequences within Korea. Thus, if any VASPs conduct business operation targeting Koreans, they are required to register with the KoFIU and comply with requirements under the Act regarding their business operations targeting Koreans. Notice to Foreign VASPs The KoFIU has sent out a notice signed by the Commissioner of the KoFIU to 27 foreign VASPs that have business operations targeting Koreansabout their requirement under the Act to register with the KoFIU by September 24, 2021. If foreign VASPs fail to register with the KoFIU, they shall cease their business operation targeting Koreans from September 25, 2021. They are notified of the possibility of being subject to penalties as prescribed by the Act if they continue to operate without registration. Foreign VASPs that have not received any notice from the KoFIU but have business operation targeting Koreans are also required to register with the KoFIU or suspend their business operation targeting Koreans from September 25, 2021. If they continue to operate business without registration, they will be subject to up to five years of imprisonment or a maximum fine of KRW50 million as prescribed by the Act. Future Plan For foreign VASPs that continue to operate without registration beyond the September 24 deadline, the KoFIU will notify them of their illegal activities and take actions such as blocking access to their websites to inhibit their illegal business operations. The KoFIU will also bring charges against unregister
Jul 15, 2021
- Vice Chairman Holds 1st Taskforce Meeting on Household Debt Management
- The FSC held the 1st taskforce meeting on household debt management chaired by Vice Chairman Doh Kyu-sang on July 15 and discussed household debt management measures for the second half of this year. The following is a summary of Vice Chairman Dohs remarks. (Key Policy Direction) For the past year and a half, the Korean economy has faced an unprecedented level of crisis triggered by the COVID-19 pandemic. In response, the financial authorities introduced support measures worth KRW175 trillion-plus. As a result, the recovery has been faster than expected. However, in the process, the level of debt in the private sector has soared with a rapid rise in household debt posing risks to the economy. In the meantime, continuing with the provision of sufficient financing support remains an important task, especially with the recent spread of COVID19 variants. The financial authorities are aiming for an appropriate balance between these two objectives while aiming to control household debt growth within 5 to 6 percent this year and about 4 percent in next year. (Household Debt in H1 2021) Household debt in the first half of this year rose KRW63.3 trillion, or about KRW10.6 trillion a month. Compared to the same period from the previous year (up KRW6.1 trillion), the pace of growth has accelerated, but it has slowed down compared to the second half of last year (up KRW12.6 trillion). The household debt growth remained at about the same level in the banking sector but expanded in the non-banking sector. Given a higher rate of housing market transactions, there are growing risks in the non-banking sector. (Household Debt Management Plan for H2 2021) In order to meet the goal of containing the growth of household debt within the 5 to 6 percent level, the financial authorities will work to ensure effective implementation of the household debt management measures, such as a gradual expansion of the application of DSR on individual borrowers. In the fourth quarter, the authorities w
Jul 14, 2021
- FSC Proposes 1-Year Postponement of External Audit on Consolidated Internal Accounting Control
- The FSC proposed a postponement of external audit on the consolidated internal accounting control system for one year as many firms are experiencing difficulty in setting up the internal accounting management system due to COVID-19. The FSC introduced its proposal through revisions to the Enforcement Decree of the Act on External Audit of Stock Companies, which will be put up for public notice from July 14 to August 23. Under the current regulatory regime, stock companies with KRW2 trillion or more in assets would be required to set up and operate an internal accounting control system under a consolidated basis and be subject to an external audit from 2022. However, for many companies that have foreign affiliates and are unable to travel overseas due to COVID-19, it has been difficult to set up a consolidated internal accounting control system. As such, the revised Enforcement Decree proposes that the external audit on consolidated internal accounting control system be postponed for one year, while early implementation also remains an option for companies that wish to follow the previously set schedule. Aside from the postponement, the revision proposal also introduced measures to control external audit quality and to sanction registered auditors if they are found to have violated the duty to maintain certain registration requirements. The authorities plan to finish the revision process by the end of 2021. * Please refer to the attached PDF for details.
Jul 13, 2021
- FSC Announces Designation of Six Non-holding Financial Groups for 2021
- The FSC held the 13th regular meeting on July 13 and designated six non-holding financial groups for 2021 pursuant to the new law on the supervision of financial conglomerates.The designated entities are Samsung, Hanwha, Mirae Asset, Kyobo, Hyundai Motor and DB groups. The designated non-holding financial groups are required to select a top representative company within their group and report the selection to the Financial Supervisory Service within one month from the date of designation. Starting from January 14, 2021, or from six months after the designation, the designated non-holding financial groups should conduct self-inspection and assessment on group-wide risks (capital adequacy ratio, etc.) on a regular basis while maintaining internal control and risk management measures, which should be disclosed to the public in a transparent way and reported to the financial authority. The authorities expect that the designation of six non-holding financial groups will encourage sound management practices from the designated entities and have a positive impact on market confidence. * Please refer to the attached PDF for details.
Jul 13, 2021
- FSC Identifies D-SIBs for 2022
- The FSC identified five bank holding companies (BHCs) and five banks as domestic systemically important banks (D-SIBs) for 2022 on July 13: Shinhan Financial Group, KB Financial Group, Hana Financial Group, Woori Financial Group, NH Financial Group, Shinhan Bank, KB Kookmin Bank, Woori Bank, KEB Hana Bank and NH Bank. Those identified as D-SIBs are required to set aside an additional common equity capital of 1%, and the higher loss absorbency requirement will take effect on January 1, 2022. The FSC will identify D-SIBs every year in accordance with assessment criteria recommended by the Basel Committee on Banking Supervision (BCBS). In addition, the FSC identified D-SIBs as domestic systemically important financial institutions (D-SIFIs) under the amended Act on the Structural Improvement of the Financial Industry. D-SIFIs are required to prepare and submit their own recovery plans to the Financial Supervisory Service (FSS) within three months from the day of being designated as a D-SIFI. * Please refer to the attached PDF for details.
Jul 02, 2021
- Government to Closely Manage Risk of Rate Hike and Maintain Support for Small Businesses
- Vice Chairman Doh Kyu-sang presided over the 40th financial risk assessment meeting via teleconference on July 2 and discussed the effects of looming interest rate rises on financial markets and post-pandemic transition policies. The following is a summary of Vice Chairman Dohs remarks. (Risk from Interest Rate Hike) There are growing expectations for both domestic and global economy to recover from the pandemic following a strong economic rebound seen in the U.S. However, the prospect for rate hikes poses a new challenge to economies. The Fed in June indicated that it has begun discussions on tapering and the Bank of Korea has continued to suggest the possibility of rate hikes within this year. For market participants that have largely become accustomed to the low interest rate environment, it is time to manage risks associated with possible increases in interest rates. Rate hikes are expected to have considerable effects on asset markets that have surged to record high levels on the back of abundant liquidities around the world. Unlike stock markets backed by strong fundamentals, the virtual asset and real estate markets are forecast to experience significant impact from monetary tightening. The virtual asset market is showing extremely unstable trends and housing prices surged to record levels by historical standards. Last week, the Bank of Korea identified recent asset price hikes as the main factor behind the financial vulnerability index reaching a record high level since the 2008 global financial crisis. In particular, the housing price increase in Korea in relation to income growth was found to be two to three times above the levels seen in major economies. As such, it is necessary to stay alert as experts warn about the risks of shifting monetary policy. To help mitigate risks originating from excessive debt, the government will work on effective implementation of policies, such as the application of DSR on individual borrowers. In this regard, financial in
Jun 30, 2021
- KoFIU Holds Meeting to Monitor Fraudulent Account Activities of VASPs
- The Korea Financial Intelligence Unit held a meeting with relevant institutions on June 30 to review the progress of monitoring fraudulent accounts of virtual asset service providers and other AML requirements. The KoFIU has been carrying out comprehensive inspections on fraudulent activities and fictitious accounts held by VASPs and taking appropriate measures on those that have been detected for illegitimate activities. Upon detection, fraudulent accounts are being suspended for use and relevant information is shared with investigative authorities. In this regard, the authorities are also working on setting up a risk management system on VASPs across all financial sectors to facilitate the suspension of account transactions, suspicious transaction reporting and information sharing. As such, the KoFIU will continue to work on strengthening the risk management system in the future. With the deadline (Sep. 24) approaching for VASPs to register their business with the authority, there is a greater risk of VASPs closing their business with investors facing the risk of losing their deposit money. To help prevent embezzlement and damages to investors, financial institutions are asked to file STRs to the KoFIU immediately when detecting large amount transfers from VASPs deposit collection accounts. With regard to the AML duties of financial institutions, the KoFIU also called for stronger internal control measures to prevent money laundering and other illicit transactions through loan, investment and fund management sectors. * Please refer to the attached PDF for details.
Jun 25, 2021
- FSC Recommendation on Capital Management for Banks to be Expired as Scheduled on June 30
- The FSC decided to let its recommendation on capital management for banks and bank holding companies expire as scheduled at the end of June.The following aspects were taken into account for arriving at this decision. a) Improvements in the real economy compared to six months ago with major institutionsincluding the Bank of Korea, IMF and OECDrevising up their growth forecasts for the Korean and global economy b) Domestic banks and bank holding companies demonstrating their financial soundness even as they have been injecting relief funds into the economy in the wake of the COVID-19 outbreak Improvements in banks loss absorbing capacities with their BIS capital ratios largely surpassing the threshold End of 2019 End of 2020 End of Q1 2021 BIS capital adequacy ratio 13.91% 15.00% 15.36% Loan loss provision for banks 112.1% 138.8% 137.3% c) All banks and bank holding companies passing stress tests carried out by the FSS in May-June 2021 d) Major economies, such as the U.S. and Europe, announcing their plans for easing banks dividend restrictions after passing stress tests amid economic recovery From July 1, banks and bank holding companies can decide their dividend payout policies on their own according to the relevant law and the rules set forth by the banking association. With the ongoing COVID-19 situation, the FSC and FSS will continue to closely monitor improvements in the real economy, financial market stability and the soundness of financial institutions and draw up appropriate measures when deemed necessary. * Please refer to the attached PDF for details.
Jun 24, 2021
- Suspension of Business Operation Extended for Optimus Asset Management
- The FSC decided to extend the period of suspension of business operation for Optimus Asset Management for six more months from June 30 until December 29, 2021 in order to ensure a sufficient timeframe for investor protection measures. The suspension of business operation was first issued by the FSC on June 30, 2020 and has been extended once until June 29, 2021. The fund sellers have agreed to set up a new fund management company through collective investment which will take over and manage funds previously operated by Optimus Asset Management. It is expected that setting up a new fund management company will take about three to four months. In the meantime, the fund sellers will take remedial steps on their own to address damages inflicted on investors. With the plan for fund management in place, the authorities plan to take further steps in terms of the sanctions process for Optimus Asset Management in the second half of this year. * Please refer to the attached PDF for details.
Jun 23, 2021
- Revision to FSCMA and Lower Regulations to Improve Investor Protection and PEF Management
- The FSC announced revisions to lower regulations of the Financial Investment Services and Capital Markets Act in order to prepare for the implementation of the revised FSCMA that is scheduled to go into effect from October 21, 2021. The revision proposal will be put up for public notice for forty days from June 23 until August 2. The revised FSCMA and lower regulations will improve the overall framework on private equity funds while strengthening investor protections for qualified retail investors and increasing efficiency in PEF management. First, the current PEF classification system placing distinctions between the professional investment type and the management participation type based on the purpose of fund management will be changed to a new classification system of general PEFs and institution-only PEFs according to the type of investors. Second, investor protections will be strengthened for qualified retail investors while different regulations for professional investment type and management participation type PEFs will be integrated into a single regulatory framework to help improve efficiency in fund management. Key Details (Investor Protections) Under the new classification scheme, qualified retail investors are eligible to invest in general PEFs only and investor safeguards will be strengthened for qualified retail investors investing in general PEFs. (PEF Management Rules) The rules governing the management of both general PEFs and institution-only PEFs will be integrated into a single regulatory framework that is identical to the current rules on the professional investment type PEFs. The existing rules that are intended to prevent large companies from expanding their governance clout using PEFs will continue to apply to all PEFs. (Market Soundness and GP Supervision) Various measures will be put in place to ensure soundness of the general PEF market and enhance supervision over general partners. In this regard, a new rule on the cancellation of regist
Jun 22, 2021
- Government Approves Rules Change Requiring SIFIs to Draw Up and Submit Recovery Plans
- The government approved a revision proposal for the Enforcement Decree of the Act on the Structural Improvement of the Financial Industry at a cabinet meeting held on June 22. The revision proposal requires systemically important financial institutions (SIFIs) to draw up their own recovery plans every year to be submitted to the Financial Supervisory Service for crisis management purpose. The FSC introduced this revision proposal in February of this year following the passage of the amended Act on the Structural Improvement of the Financial Industry by the National Assembly in December last year. The Act is scheduled to take effect from June 30 of this year. Key Details (Selection of SIFIs) The FSC should select SIFIs every year after considering their function, scale, ties to other financial institutions and influence on the domestic financial markets. In this regard, the selection of SIFIs will be confined to banks and bank holding companies. (Recovery and Resolution Plans) SIFIs will be required to prepare and submit their own recovery plans to the Financial Supervisory Service within three months from the day of being designated as a SIFI. The FSS will then immediately pass on their recovery plans to the Korea Deposit Insurance Corporation (KDIC) and be required to evaluate the recovery plans and file evaluation reports to the FSC within three months. At the same time, the KDIC will be required to draw up resolution plans and submit them to the FSC within six months. A deliberative body within the FSC will then decide on the final approval of both recovery and resolution plans within two months. In this regard, recovery plans should have been approved at a board meeting prior to being submitted and contain specific details about the role and responsibilities of board members and executives, major business areas, standards of determining crisis situations, specific crisis management measures, etc. The deliberative body within the FSC will be made up of an FSC com
Jun 17, 2021
- FSC Proposes Additional AML Duties for VASPs
- The FSC announced a revision proposal to the Enforcement Decree of the Act on Reporting and Using Specified Financial Transaction Information on June 17. The revisions are intended to impose additional AML requirements on VASPs and clarify implementation details about the customer due diligence (CDD) and suspicious transaction report (STR) requirements. The proposal will be put up for public notice from June 17 to July 27 before moving on to further legislative steps. Key Revisions (AML Measure for VASPs) The problem of VASPs registering false information on their own networks for illegitimate activities including price rigging has been identified. Pursuant to the Act on Reporting and Using Specified Financial Transaction Information (the Act hereinafter), the Enforcement Decree will be revised to add an AML measure for VASPs, which restricts VASPs and their employees from handling or engaging in cross-trading of virtual assets that are issued by ones own exchange or by an entity that is deemed to be in a special relationship with the former as specified by the relevant law. This proposal is aimed at improving transaction transparency. (Clarification on AML Duties of Financial Institutions) Financial institutions are required under the Act to perform risk assessment on their clients as part of the AML duties. However, the current Enforcement Decree may be misinterpreted as to require risk assessment for the purpose of checking highly risky clients only. As such, the revision proposal clarifies this and states that financial institutions are required to perform risk assessment on all clients. This will also help encourage financial institutions to develop and operate a graded risk management system on a par with global standards under the FATF recommendations. (Verification of Corporate Client Identity) Financial institutions are required to confirm the legal name, date of birth and nationality of their corporate clients. However, there exist confusions as the curren
Jun 16, 2021
- Authorities Hold 1st Taskforce Meeting on Maximum Legal Lending Rate Reduction
- The FSC and FSS along with the relevant industry groups launched a taskforce to prepare for the maximum legal lending rate reduction scheduled to take place in July this yearand ensure an effective implementation of relevant measures. At its kick-off meeting held on June 16, the taskforce discussed ways to improve rules on microfinance, credit businesses and mid-range interest rate loans in line with the change in the maximum legal lending rate. These measures are aimed at making sure the availability of financing opportunities for lower-income individuals and protecting them from predatory lending practices. The meeting also discussed plans to more closely monitor market situations to prevent illegal predatory lending practices and to operate a complaints team in order to provide tailored consulting and referral services for those in need. The taskforce will be operated through the following three teamspolicy inspection team, market inspection team and complaints team. * Please refer to the attached PDF for details.
Jun 15, 2021
- Multiple Subscriptions Restricted for IPO Shares
- The government approved the revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act during a cabinet meeting held on June 15. The revisions (a) restrict retail investors from applying for multiple subscriptions for IPO shares, (b) increase the annual cap for issuing securities via crowdfunding and (c) introduce specific rules for financial investment companies credit extension to overseas branches. The revisions will go into effect from June 30, 2021, except for the provision on the restriction of multiple IPO subscriptions, which will begin to apply for securities reports being filed after June 20, 2021. (Restricting Multiple Subscriptions for IPO Shares) With the introduction of a more equitable share allocation method in last December, retail investors are given more opportunities for IPO share subscription. However, in IPOs with multiple lead managers, multiple subscriptions were made possible as retail investors could open up accounts at multiple brokerage firms and apply at each brokerage firm. This resulted in inconvenience for investors and heavy workload for brokers. As such, multiple subscriptions for IPO shares will be banned for retail investors. Brokerage firms will be required to check whether investors have applied for share subscriptions at other brokerage firms. Even when an investor applies for multiple subscriptions, share allocation will be made only on the first subscription. (Follow-up Measures to Promote Crowdfunding) The annual cap for issuing securities through crowdfunding will be increased from KRW1.5 billion to KRW3 billion. The authorities will strengthen supervision over the financial soundness of crowdfunding platforms by checking their capital requirement more frequently from once a year to once every month and shortening the grace period before withdrawal from one year to six months. (Financial Investment Companies Overseas Operation) Financial investment companies can extend credit to oversea
Jun 09, 2021
- KoFIU and Probing Institutions to Strengthen Monitoring and Inspection on AML Duties of VASPs
- The Korea Financial Intelligence Unit held a meeting with eleven institutions tasked with probing virtual asset service providers for their AML requirements on June 9.At the meeting, the KoFIU and relevant institutions discussed ways to bolster inspection of VASPs use of fake and false name bank accounts and to strengthen AML supervision over financial institutions. (Strengthen Monitoring of Fraudulent Bank Accounts) As VASPs are required to register with real name bank accounts by September 24 this year, their use of fictitious bank accounts has become more prevalent. As local banks have begun to more tightly restrict VASPs from opening up new accounts for collection of money, the use of accounts opened at mutual finance firms and other small-scale financial firms has also increased. As such, the authorities will strengthen monitoring of fraudulent and inappropriate use of bank accounts by VASPs. Financial transactions through fraudulent and fictitious bank accounts will result in rejection of transactions and termination of accounts. In this regard, the authorities will also strengthen monitoring of suspicious account activities. (Conduct Comprehensive Inspections on Fraudulent Accounts) The relevant institutions will carry out comprehensive inspections on the fraudulent accounts operated by VASPs between June and September. In the future, the status on the use of fraudulent accounts by VASPs will be analyzed monthly and shared with relevant institutions. (Enhance Monitoring of VASPs) As the deadline is approaching for VASPs to register their business with the authority, there exists a greater risk of business closure. As such, the authorities will enhance monitoring of VASPs operating accounts as well as accounts used for collecting deposits. (Strengthen AML Supervision) The authorities will strengthen AML supervision and inspection over financial institutions in order to prevent fraudulent activities, such as inappropriate lending, embezzlement of funds, illicit
Jun 03, 2021
- FSC Announces Analysis on Stock Markets with Partial Resumption of Short Selling
- With the partial resumption of short selling being in place for about a month, the FSC announced an analysis on stock market trends for the period of May 3 to June 2. During this period, stock prices moved in a similar pattern as global stock markets while domestic stock prices showed relatively stable movements compared to other markets. Although the average daily amount of short selling transactions rose somewhat, it appears that there exists no significant relationship between short selling and stock prices for the given period. The FSC and other relevant institutions will continue to closely monitor market trends while working to bring about transparency and fairness in the markets. Stock Market Trends As of June 2, KOSPI and KOSDAQs closing prices were up 2.4 percent and down 0.2 percent, respectively, compared to April 30, the last trading day before the partial resumption of short selling began. In May, global stock prices showed mixed trends with the possibility of tapering by the Fed amid price increases in the U.S. Asian stock markets moved in the same direction as global stocks while domestic stock markets showed relatively stable trends as corporate earnings improved and retail investors remained net buyers. In May, foreigners net sold KRW9 trillion but turned to net buying in the last week of the month. Due to concerns about a monetary tightening from the U.S., other Asian markets also experienced foreign outflows. Short Selling Trends During the one-month period from May 3 to June 2, the average daily amount of short selling transactions increased somewhat to KRW688.2 billion. However, considering the fact that the total transaction amount increased more than twice the level seen before the partial resumption of short selling began, the growth is not that considerable.Also, as the built-up demand for short selling begins to fade out, the growth in the amount of short selling transactions also shows a downward trend toward stability. During the one-mont
Jun 02, 2021
- Authorities Introduce Operational Guideline on the Suitability and Appropriateness Test for Investors
- The FSC introduced an operational guideline on the suitability and appropriateness test for investors which will be put up for public notice from June 3 to June 22. Background Financial institutions selling investment products to customers are required to carry out a suitability and appropriateness test for investors based on the information provided by customers in order to sort out investment products that are considered to be inappropriate for them. With the Financial Consumer Protection Act taking effect in March this year, certain changes have been made to the suitability and appropriateness test. First, the scope of investor information that needs to be checked by financial institutions as well as the standards for the measurement of investors risk appetite and tolerance have become legally mandated through the Act.Second, financial institutions have become subject to monetary penalties if their employees are found to have engaged in fabrication of consumer data or evaded the duty to conduct a suitability and appropriateness test. However, in implementing the Financial Consumer Protection Act, certain aspects of the suitability and appropriateness test have been identified as sources of inconvenience for consumers. As such, the authorities have prepared an operational guideline to help remove the inconvenience and improve the sales process. Key Details of the Guideline I. General Principles a) The seller should explain to consumers the purpose of carrying out a suitability and appropriateness test in an easy-to-understand manner and clearly indicate to consumers what kinds of information are being requested. b) The suitability and appropriateness test for investors should be carried out in a consistent manner according to the standards prescribed by the relevant laws. c) The test results should be stored and maintained along with the justifying documents. II. Online and Onsite Test Use For consumers who have already obtained their suitability and appropriatene
May 29, 2021
- FSC Chairman Delivers Opening Remarks at the Green Finance Special Session of P4G Seoul Summit
- FSC Chairman Eun Sung-soo delivered opening remarks at the special session on green finance held on May 29. Please see below for the full text of the speech. I. Introduction Good evening, everyone. Good afternoon, Europe. Good morning, America. Welcome to the 2021 P4G Seoul Summit Special Session on Green Finance. The world is still in the midst of the Covid-19 crisis. Covid-19 is not an individuals problem, nor a regions or a countrys problem. It is the whole humanitys problem. Likewise, climate change is everyones problem. In this regard, P4G puts emphasis on the value of partnerships across all sectors. I hope P4G Seoul Summit can induce everyone to take part in climate action. II. Why Green Finance? Achieving carbon neutrality involves a fundamental restructuring of industry. This might require trillions of dollars across the world. Many countries including Korea, have announced large-scale fiscal stimulus under Green New Deal schemes. However, public finance alone cannot cover the scale of investment we need. MDBs and private sector investors need to get involved as well. In a different angle, the financial industry can induce companies to lessen their environmental impact by altering the lending or investing criteria. For example, BlackRock, the worlds largest asset manager, evaluates a companys ESG performance when making an investment decision. III. Progress of Green Finance Green finance has been rapidly taking root in the global financial market over the past years. By the end of 2020, around 3,000 institutional investors have joined the UN Principles for Responsible Investment. Globally, ESG fund assets are nearing $2 trillion. Also, quarterly issuance of green bonds has risen to $150 billion. South Korea is also actively stepping up efforts to promote green finance. Last year, the government pledged to double the share of funding for green projects in public financial institutions by 2030. We are also planning to gradually make ESG data disclosures manda
May 28, 2021
- Government to Strengthen Oversight on Virtual Asset Transactions and Improve Transparency
- The government announced its plan to enhance supervision on virtual asset transactions at a taskforce meeting led by the Office for Government Policy Coordination on May 28. The measures introduced are aimed at strengthening efforts to prevent illegal transaction activities and improving transparency amid growing market size of virtual assets. The taskforce meeting also assigned specific tasks for each government authority and agency dealing with virtual asset transactions. With the revised Act on Reporting and Using Specified Financial Transaction Information providing a six-month grace periodfor current virtual asset service providers (VASPs) to register their business with the authority, the government will ensure an effective management over the registration process as well as ensuing risks both during and after the grace period. Key Measures I. Preemptive management during the grace period In order to encourage prompt and early registration from existing VASPs, the financial authorities will provide consulting on the registration and supplemental requirements, such as obtaining an ISMS certification, opening up a real-name checking account, etc. The KoFIU will promptly process applications for business registration as they come in to promote market reorganization with registered entities. To let market participants know in advance and help them prepare for the possibility of business closure, the authorities will let the public know the status of business applications being filed through relevant websites. The authorities will continue to share information about VASPs with the investigative authorities to help enhance the effectiveness of necessary investigations. As of May 20, about sixty VASPs appear to be in operation. Twenty entities have received ISMS certifications and four them are found to run their operation with real-name accounts as of May 27. The authorities will continue to closely monitor fraudulent activities by VASPs and ensure strict response.
May 27, 2021
- FSC to Host Special Session on Green Finance at the 2021 P4G Seoul Summit
- The FSC will host a green future session on the topic of green finance at the 2021 P4G Seoul Summit at Dongdaemun Design Plaza on Saturday, May 29, from 20:00 to 22:00 (Korean Standard Time). The special session on green finance will be available for online live streaming for anyone who is interested in watching via official websites of the 2021 P4G Seoul Summit, FSC and their YouTube channels. The special session will feature discussions on the role of finance in fostering green recovery in the post-COVID-19 era. Speakers and panelists will include foreign dignitaries and experts from climate and finance-related international organizations and institutions, such as the UNFCCC, WEF, IFC, BIS, EIB, TCFD, GCF, GGGI and SP. FSC Chairman Eun Sung-soo will deliver opening remarks through which he will offer an outlook on the future tasks of global green finance efforts while calling for close cooperation from financial sectors across the globe to achieve carbon neutrality. In particular, Chairman Eun will introduce Koreas green finance policies that have been actively pursued by the government as it announced the 2050 carbon net zero goal last year. The special session on green finance will shed a new light on the important role of finance in responding to climate change. It will also help raise domestic financial sectors interest and participation in green finance efforts. For more details about the program, please see the attached reference material. * Please refer to the attached PDF for details.