Jun 10, 2021
- Online Education Program Offered on the Supervision of Financial Conglomerates
- The FSC and FSS announced that the authorities will provide an online education program for the employees of non-holding financial groups from June 10 ahead of the newly enacted law on the supervision of financial conglomerates taking effect on June 30. The online live streaming education program was prepared to ensure thorough preparation for the implementation of the new law and make sure that the employees of relevant financial institutions have a clear understanding about the relevant rules and requirements, such as the self-assessment on capital adequacy, internal control and risk management and reporting and disclosure requirements, etc. The program will be available in two separate sessions on June 10 to 11 and June 17 to 18 for about 134 employees of 46 financial companies affiliated with the six major non-holding financial groups. In the process of implementing the new law on the supervision of financial conglomerates, the authorities will maintain close communication with financial institutions and make support available. * Please refer to the attached PDF for details.
Jun 10, 2021
- Household Loans, May 2021
- The outstanding balance of household loansin all financial sectors fell KRW1.8 trillion from the previous month at the end of May 2021 (up 9.6% y-o-y). The household loan balance dropped KRW1.5 trillion in the banking sector and KRW0.3 trillion in the non-banking sector. All financial sectors (y-o-y): +8.5% (Mar 2021) +10.0% (Apr 2021) +9.6% (May 2021) By type, mortgage loans expanded KRW4.5 trillion in May, growing at a slower rate compared with the previous month (up KRW5.2 trillion y-o-y), due to an overall drop in housing transactions. Other types of loans including credit loans fell KRW6.3 trillion due to a large-scale refund of deposits taking place in the aftermath of the SKIET IPO subscription. The financial authorities will closely monitor trends in household loans and work for an effective and consistent implementation of the household debt management measures. * Please refer to the attached PDF for details.
May 25, 2021
- Government Approves Revised Rules to Introduce Small-sum & Short-term Insurance
- The government approved the revisions to the Enforcement Decree of the Insurance Business Act at a cabinet meeting on May 25, aiming to introduce a small-sum, short-term specialized insurance business with a variety of insurance coverage such as pet, leisure and travel insurance. Key Revisions (Small-sum Short-term Insurance Business) The minimum capital requirement for a small-sum, short-term specialized insurance business will be set at KRW2 billion. They are allowed to provide various types of insurance coverage e.g. pet insurance, leisure travel insurance, weather insurance, etc with a one-year renewable term and premiums of up to KRW50 million. The insurers annual gross premium revenue will be capped at KRW50 billion. (Scope of Insurers Subsidiaries) To promote digital transition in the insurance sector, the revision permits insurers to own more than a 15% stake in a healthcare or MyData service provider as subsidiaries. (Access to Administrative Information) Currently, insurance policy holders are required to submit required administrative documents such as a copy of residence registration, family relation certificate, drivers license, etc, to insurers. To ease such a burden, the revision will allow insures to access to administrative information upon policy holders consent. (External Evaluation of Policy Reserves) Insurance businesses with total assets of KRW1 trillion or more will be required to have external actuaries approve the appropriateness of their policy reserve. Schedule The revisions will take effect from June 9, 2021. The FSC will complete revisions to subordinate rules including the Regulation on Supervision of Insurance Business in accordance with the revised Enforcement Decree. * Please refer to the attached PDF for details.
May 13, 2021
- Financial Development Review Committee Holds 1st Special Committee Meeting on Young Adults
- The FSC announced that the financial development review committee launched an eighteen-member special committee on young adults made up of members in the age of twenties and thirties representing diverse areas of professions on May 13. At its kick-off meeting, the special committee on young adults held discussions on the issue of housing finance and the housing ladder. During his keynote address, FSC Chairman Eun Sung-soo spoke about the importance of maintaining close communication with young adults as the level of interest shown by young adults recently on financial markets and policies have grown significantly. As such, Chairman Eun pledged that the FSC will continue to listen closely to the needs of young adults to help improve conditions and minimize disadvantages for them. Throughout the year, the special committee will hold meetings and have discussions on a range of topics that are of concern to young adults, such as creating fairer conditions for stock investment, challenges of young adults as startup entrepreneurs, the electronic payment system and so on. * Please refer to the attached PDF for details.
May 12, 2021
- Household Loans, April 2021
- The outstanding balance of household loansin all financial sectors rose KRW25.4 trillion from the previous month at the end of April 2021 (up 10.0% year-on-year). The household loan balance increased KRW16.0 trillion in the banking sector and KRW9.4 trillion in the non-banking sector. All financial sectors (y-o-y): +8.5% (Feb 2021) +8.5% (Mar 2021) +10.0% (Apr 2021) By type, mortgage loans increased KRW5.2 trillion in April, growing at a slower rate compared with the previous month (up KRW6.5 trillion y-o-y). Other types of loans saw a spike of KRW20.2 trillion as demand for credit loans jumped ahead of the SKIET IPO which attracted about KRW80.9 trillion in subscription deposit. However, as of May 3, the household loan balance in both the banking and non-banking sectors appear to have fallen back following refunds of subscription deposits. The temporary spike in credit loans in both the banking and non-banking sectors in April was mainly caused by an increase in demand for credit loans amid large-scale IPO subscription activities. The financial authorities will continue to closely monitor trends in household debt while working for an effective implementation of the household debt management measures. * Please refer to the attached PDF for details.
May 06, 2021
- Financial Authorities to Improve Rules on the Suspension of Licensing Review Process
- The financial authorities introduced the measures to improve rules on the suspension of licensing review process for financial institutions. The measures are intended to increase predictability and minimize legal uncertainties for businesses. The rules on the suspension of licensing review process have been introduced to prevent the granting of license to legally disqualified entities that may be undergoing an investigation or lawsuit at the time of their licensing review process. Under the rules, financial authorities may decide to suspend the licensing review process (a) if the applicant is facing a criminal charge or under an investigation or inspection by a relevant authority and (b) if the lawsuit or the investigation or inspection is deemed to have significant impact on the licensing review process. However, there have been criticisms regarding the current system as it serves a contradictory purpose to the principle of presumption of innocence, leads to unnecessary breach of rights and interests on the part of the applicant, impedes the level of predictability for resumption of the review process and raises the issue of inconsistency in terms of the application of the rules across different sectors. As such, the FSC will carry out the following measures to make improvements to the current suspension of licensing review process. Key Measures First, the authorities will newly establish a guideline that provides a specific and detailed list of grounds and reasons for suspending a licensing review process. Second, for business entities whose licensing review process has been suspended, the authorities will reconsider every six months the possibility of resuming the licensing review process and whether to extend the suspension period. Third, the suspension of licensing review process, which is currently not applicable to insurance businesses, specialized credit finance companies and financial holding companies, will be applied across all financial sectors to enhanc
Apr 15, 2021
- FSC Chairman Holds Talks with Relevant Officials Ahead of Partial Resumption of Stock Short-selling
- FSC Chairman Eun Sung-soo met with officials from relevant institutions and heads of securities companies on April 15 and held talks on the preparatory measures for partial resumption of stock short-selling on May 3,recent stock market trends and virus prevention measures taken by the financial investment industry. The following is a summary of Chairman Euns remarks. (KOSDAQ Surpassing 1,000 pts) KOSDAQ recently surpassed 1,000 points for the first time since September 2000. Throughout the years, the authorities have worked to improve the KOSDAQ market for venture capitals and startups by allowing lossmaking companies to be listed and introducing technology-based preferential listing system. As a result, KOSDAQ emerged as a distinct market for investors with many businesses with significant future growth potential being listed. The Korea Exchange, relevant institutions and the financial investment industry have put efforts to improve the investment infrastructure and seek out promising businesses. Through the Korean New Deal initiative and the government-wide effort to cultivate more innovative businesses, the government will work to support venture startups and innovative firms in KOSDAQ market to further strengthen our economy. (Ensuring Investor Trust in the Market) It is important to ensure that investors have confidence and trust about the fairness in the market. In order to root out illegal and unfair marketing or advising practices in stock markets, the government has been operating a response team since October 2020. The response team will continue to work to prevent inappropriate activities and improve regulations. Prior to the partial resumption of short-selling on May 3, the authorities will continue to work to resolve various concerns of investors. Out of the four regulatory improvement measures announced earlier, stronger penalties on illegal short-selling activities and improved rules for market makers have already become effective. The two remaining m
Apr 14, 2021
- Household Loans, March 2021
- The outstanding balance of household loansin all financial sectors rose KRW9.1 trillion from the previous month at the end of March 2021 (up 8.4% year-on-year). The household loan balance increased KRW6.5 trillion in the banking sector and KRW2.6 trillion in the non-banking sector. All financial sectors (y-o-y): +8.5% (Jan 2021) +8.5% (Feb 2021) +8.4% (Mar 2021) By type, mortgage loans increased KRW6.5 trillion in March, growing at a slower rate compared with the previous month (up KRW7.8 trillion y-o-y). Mortgage lending and jeonseloans declined due to a slowdown in housing market transactions. Other types of loans grew KRW2.6 trillion, declining from KRW3.9 trillion a year ago. Credit-based lending fell significantly compared to the end of previous year as lenders tightened control over credit risks and the demand for stock investment subsided. The government will closely monitor trends in household loans and work on policies to induce a soft-landing of the household debt-related risks. * Please refer to the attached PDF for details.
Apr 01, 2021
- Insurance Costs to be Lowered and Choices Expanded for Designated Drivers
- As a part of the governments efforts to improve the rights of essential workers, the FSC announced that the insurance cost burdens of designated drivers will be lowered with more choices offered for personal insurance subscription online. Beginning in April, the number of designated driver matching agencies joining the designated drivers personal insurance checking system will be expanded to cover nearly eighty to ninety percent of the market. This will help resolve the problem of designated drivers who already carry personal insurance having to subscribe for another group insurance coverage through a driver matching agency. Previously, the agencies had no mechanism of checking whether the listed drivers were carrying their own personal insurance coverage, so that they required drivers to subscribe to group insurance coverage offered through their agency. On the part of designated drivers with personal coverage, this resulted in heavy cost burdens as well as duplication in insurance coverage. As more agencies are joining the system, the cost burdens of designated drivers who are listed through multiple agencies will be lowered by about KRW1 million per year. In addition, there will be expanded choices and increased convenience for designated drivers as insurers will begin to offer online subscription services with lower premiums beginning on April 6. * Please refer to the attached PDF for details.
Apr 01, 2021
- FSC Chairman Meets with Bank Chiefs and Urges Cooperation on Consumer Safeguard Measures
- FSC Chairman Eun Sung-soo held a meeting with heads of major banks on April 1 to discuss various issues and seek cooperation on the implementation of new consumer safeguard measures. At the meeting, Chairman Eun talked about the heightened responsibilities of banks as well as the more deliberate sales process that is required by the new consumer safeguard measures which can be cumbersome to both consumers and bank employees. To help resolve this problem, Chairman Eun suggested that financial institutions can inform their customers about the changes taking place in a more proactive manner to mitigate confusions and quickly become accustomed to the new practices. In this regard, Chairman Eun said that the authorities will provide active support through close communication with the industry. Chairman Eun also spoke about other issues with bank chiefs, such as the extension of maturity extension and payment deferral for small merchants and SMEs, taking into account businesses potential for recovery when evaluating their credit ratings, the household debt management plan, expanding the contribution base for microfinance services, strengthening efforts for vishing prevention and working to stamp out speculation in the real estate market. * Please refer to the attached PDF for details.
Mar 29, 2021
- FSC Chairman Vows Continued Support for SMEs
- FSC Chairman Eun Sung-soo visited the newly opened financial support center at the Korea Federation of SMEs on March 29 and held talks on the governments efforts in providing financial support to SMEs. The following is a summary of Chairman Euns remarks. The government has made various types of financial support available for SMEs and small merchants. It has abolished the joint and several liability by state-backed lending institutions and strengthened the provision of venture capital to promising SMEs and venture firms. To help with the COVID-19 crisis, maturity extensions and payment deferrals were made available from all financial sectors since April of last year. The recently announced six-month extension of maturity extension and payment deferral as well as the governments plan for a gradual normalization have taken into account various comments from SMEs and small merchants. As such, the authorities will work to ensure that these support measures are effectively implemented. For SMEs, there are growing concerns over deterioration in borrowing conditions, as their credit ratings will reflect last years decreased sales performance which may cause higher borrowing rates. To help mitigate these concerns, the authorities are in close consultation with the financial sectors. First, for SMEs undergoing a temporary hardship due to a worsening of business environment but are expected to bounce back soon after, their potential for recovery will be sufficiently taken into account when assessing their credit ratings. Second, for SMEs experiencing an unavoidable fall in credit rating, the authorities will work to minimize the impact on their maximum borrowing cap, interest rate, etc. Moreover, the government will work on measures to prepare for a post-pandemic economy. To help relieve the payment burdens after the expiration of maturity extension and payment deferral, consulting services will be provided to SMEs and small merchants to allow long-term installment payments b
Mar 10, 2021
- Household Loans, February 2021
- The outstanding balance of household loansin all financial sectors rose KRW9.5 trillion from the previous month at the end of February 2021 (up 8.5% y-o-y). In the banking sector, household loans increased KRW6.7 trillion while the non-banking sector saw an increase of KRW2.8 trillion. All financial sectors (y-o-y): +5.3% (Feb 2019) +5.0% (Feb 2020) +8.5% (Feb 2021) By type, mortgage loans rose KRW7.7 trillion in February, growing KRW1.8 trillion from the previous month (up KRW0.8 trillion y-o-y). In the banking sector, jeonseloans and mortgage loans grew KRW3.4 trillion and KRW2.3 trillion, respectively, while mortgage lending by non-banks increased KRW1.3 trillion from the previous month. Other types of loans rose KRW1.8 trillion, down KRW2.7 trillion from the previous month as demand for credit loans declined. The financial authorities will closely monitor trends in household loans and introduce a more effective household debt management plan focusing on individual DSR within this month. * Please refer to the attached PDF for details.
Mar 08, 2021
- KoFIU's Upgraded AML System Demonstrates Significant Improvements
- The FSC announced that the Korea Financial Intelligence Unit (KoFIU)s upgraded anti-money laundering system in operation since December 17 of last year has shown significant improvements in terms of its suspicious transaction data processing, data screening and analysis and information security. The KoFIU began to operate an upgraded AML system from December 17, 2020to improve efficiency in data processing in response to the increasing volume of reports the system handles. In this regard, the past two months of operation has shown that significant improvements were made as intended. First, the suspicious transaction report filing system has become more efficient. The number of financial institutions filing STRs to KoFIU through an exclusive security network has been expanded to 3,664 from 611 previously. As such, the STR filing rate via exclusive security network has almost tripled from thirty percent to eighty-eight percent, with the processing time per STR reduced by more than ten seconds. Second, the screening and analysis process has been made more efficient with the increased use of digitalization and automation in the work process. The volume of preemptive screening and analysis of suspicious transactions has increased thirty-five percent on average compared to 2019. Third, the system hardware which is located at the National Information Resources Service guarantees much stronger levels of security and stability in management. The application of the standard framework on e-government has ensured an efficient integration of electronic resources and has improved the systems daily processing performance by more than nine times compared to the previous system. In order to more effectively respond to the increasingly diverse and complex types of money laundering schemes, the authorities will continue to work on improvements to the AML system. * Please refer to the attached PDF for details.
Feb 10, 2021
- Household Loans, January 2021
- The outstanding balance of household loansin all financial sectors rose KRW10.1 trillion from the previous month at the end of January 2021 (up 8.5% y-o-y). The household loan balance increased KRW7.6 trillion in the banking sector and KRW2.5 trillion in the non-banking sector. By type, mortgage loans rose KRW5.8 trillion in January, declining KRW0.9 trillion from the previous month (up KRW6.7 trillion y-o-y). In the banking sector, mortgage loans grew KRW5.0 trillion while mortgage lending by non-banks increased KRW0.8 trillion from the previous month. Other types of loans rose KRW4.3 trillion as demand for credit loans remained high. The financial authorities will closely monitor trends in credit loans while ensuring a seamless provision of lending support to businesses hit by social distancing measures. In the first quarter, the authorities will come up with a more effective household debt management plan focusing on individual DSR. * Please refer to the attached PDF for details.
Feb 05, 2021
- Rules Change Announced for Insurance Businesses Specializing in Small-sum and Short-term Policies
- The FSC announced the revisions to the Enforcement Decree of the Insurance Business Act on February 4, setting entry requirements for the establishment of insurance businesses specializing in small-sum, short-term policies and introducing measures to improve the soundness of the insurance industry. The revisions will be put up for public notice for forty days until March 17, 2021. Key Revisions (Small-sum Shor-term Insurance Policies) The minimum capital requirement for setting up an insurance business specializing in small-sum, short-term insurance policies will be set at KRW2 billion. Small-sum, short-term insurance coverages will be allowed in all insurance coverage areas where applicable with a coverage term of one year, premiums of up to KRW50 million and the insurers annual gross premium revenues up to KRW50 billion. (Requirement for External Evaluation on Policy Reserves) Insurance businesses with total assets of KRW1 trillion or more will be required to have external actuaries approve the appropriateness of their policy reserves. This requirement will also be applied to the insurers with less than KRW1 trillion in total assets but whose policy coverage types are considered as essential for them to ensure the payout capabilities. The external actuaries will be entitled to a right to request relevant information from insurance companies. To guarantee impartiality, external evaluations from the same institution will not be allowed for four consecutive years. (Rules on Subsidiaries) The revisions will clearly indicate that insurers will be permitted to own MyData and health care-related businesses as subsidiaries. Expectation The authorities expect that the revisions will help promote the development of diverse types of small-sum, short-term insurance products for consumers according to their individual lifestyle, improve the soundness and competitiveness of insurance businesses and encourage insurers to boost investment and cooperation in new business areas, su
Jan 14, 2021
- FSC Plans to Improve Corporate Disclosure Rules
- Vice Chairman Doh Kyu-sang held a meeting with industry officials and experts via teleconference on January 14 and discussed the government’s plans to improve rules on corporate disclosure.The following is a summary of Vice Chairman Doh’s remarks.BACKGROUNDAs the pandemic situation continues, there are growing uncertainties throughout the economy and rapid changes are taking place in the business management environment. As such, the accuracy and promptness in corporate disclosure has become ever more important. Considering a surge in retail investors’ participation in stock markets last year, the disclosure rules need to be improved to allow retail investors to more easily understand disclosure information while reducing filing burdens for companies. In addition, with growing significance of environmental, social and governance (ESG) factors and responsible investing, it is necessary to set up an appropriate regulatory environment.PLANS FOR IMPROVEMENTI. IMPROVE INVESTOR CONVENIENCE IN USING DISCLOSURE INFORMATIONThe required criteria for company disclosure reports and the categorization system will be changed and redundancy will be removed to help improve retail investors’ understanding of disclosure information. An easy-to-understand information booklet will also be published for retail investors. In addition, the Data Analysis, Retrieval and Transfer (DART) System managed by the Financial Supervisory Service will be improved to make it more user-friendly with the introduction of more useful menu categories and enhanced search capabilities.II. REDUCE COMPLIANCE BURDENS FOR BUSINESSESQuarterly reports which have placed relatively heavy burdens on companies will be simplified to contain only key disclosure information, reducing the current requirement items by about forty percent. In addition, corporate filing burdens will be reduced for a greater number of smaller sized companies. III. PROMOTE ESG/RESPONSIBLE INVESTINGThe Korea Exchange will provide a guida
Jan 14, 2021
- Household Loans, December 2020
- The outstanding balance of household loans in all financial sectors rose KRW8.5 trillion from the previous month at the end of December 2020 (up 8.0% y-o-y). The household loan balance increased KRW6.7 trillion in the banking sector and KRW1.8 trillion in the non-banking sector.By type, mortgage loans expanded KRW6.7 trillion in December, dropping KRW0.1 trillion from the previous month (up KRW2.1 trillion y-o-y). In the banking sector, mortgage loans grew KRW6.3 trillion while mortgage lending by non-banks increased KRW0.4 trillion from the previous month. Other types of loans rose KRW1.8 trillion, showing a significant decline (down KRW10.1 trillion m-o-m) from the previous month due to strict regulations on credit loans.In 2021, the financial authorities will continue to closely monitor trends in household loans and check the implementation of the household debt management plan. The authorities will draw up a plan in the first quarter that aims to make a gradual transition toward the the application of DSR rules centered on individual borrowers’ debt service capabilities.* Please refer to the attached PDF for details.
Jan 13, 2021
- FSC Grants Preliminary Financial Investment Business License to IMC Trading BV
- The FSC decided to grant a preliminary financial investment business license to IMC Trading BV, a Netherlands-based trading firm on January 13. It marks the first approval of a foreign-based trading firm in three and a half years.Based on the application processing results by the Financial Supervisory Service, the FSC decided that IMC meets the requirements set forth by the Financial Investment Services and Capital Markets Act.The entry of a new foreign-based securities firm into domestic markets has favorable effects as its market making function can help propel transactions on low-liquidity stocks and help promote domestic markets as global financial hubs.As such, the authorities will continue to work on close supervision of market makers to ensure their proper function.IMC is required to apply for the final approval within six months.* Please refer to the attached PDF for details.
Jan 07, 2021
- Authorities Hold Meeting on Improving Financial Education Programs
- The FSC and the FSS held a financial education council meeting via teleconference on January 7 to review the progress of the general plans to improve financial education programs announced on May 1, 2020 and to decide on a specific timeline for implementation. KEY DETAILS(CONTENTS) A guideline on the development of financial education contents and specific standards for the contents certification system are currently being developed. The authorities will finalize the guideline and the standards at the council meeting scheduled for April this year and begin the contents certification process.(CONTENTS DELIVERY CHANNELS) Due to the ongoing COVID-19 pandemic, a shift to more online contents delivery channels has taken place. In the second half of 2021, the one-stop online contents site will be set up to make certified educational contents available to the public at free of charge.(INSTRUCTORS) The authorities are currently working on developing certification standards for professional instructors. The instructor certification process will begin in the first half of 2021 and the one-stop online contents site will operate a professional instructor database in the second half of 2021.(EDUCATIONAL METHODS) Diverse educational and counseling programs are being developed for different groups of target audiences, which will be available for service in 2021.(SCHOOL PROGRAMS) Financial education programs suitable for middle school and high school students are being developed with a pilot program scheduled for March-April 2021.(IMPLEMENTATION FRAMEWORK) Specific details regarding the operation of the financial education council have been included in the enforcement decree of the new legislation on financial consumer protection, which will go into effect in March 2021. The FSS will assume the role of financial education center and coordinate functions of local financial education providers.* Please refer to the attached PDF for details.
Jan 07, 2021
- Amendments to Insurance Business Act to Set Up Joint Committee on Public-Private Health Insruance
- The FSC announced amendments to the Insurance Business Act on January 7, which will lay legal foundations for an inter-ministerial cooperation between the FSC and the Ministry of Health and Welfare in the establishment and operation of a joint committee on public-private health insurance system.There have been growing needs for the development of a more closely linked health insurance system between the state-operated national health insurance (NHI) service and indemnity health insurance policies offered by private insurers. As such, the FSC and the MOHW have each drawn up amendments to the Insurance Business Act and the National Health Insurance Act, respectively, with an aim of guaranteeing the provision of a more systematic healthcare coverage and managing healthcare costs at a reasonable level.The amendments establish new provisions which (a) mandate policy cooperation between the FSC and the MOHW, (b) set up a joint committee on public-private health insurance system, (c) authorize the FSC and the MOHW to conduct joint surveys on the interplay between the NHI and private health insurance system and to disclose survey results to the public, etc.The revisions will be put up for public comments until February 16, 2021.* Please refer to the attached PDF for details.