1. STRENGTHEN CORPORATE FINANCING FUNCTIONS

‘Comprehensive Financial Investment Business Entities,’ will be allowed to lend up to 100% of their equity capital in corporate credit offering. For credit loans with a maturity of less than one year, prudential regulatory requirements will be eased to levels applied to commercial banks.

Brokerage firms specialized in SME financing will be designated to facilitate fundraising activities of SMEs and venture companies such as listings on KONEX or KOSDAQ, bond issuance and public placement of securities.

Regulations on private placement of securities for qualified institutional investors (QII) will be eased to allow all companies whose total asset value of less than KRW 2 trillion to issue securities in the private placement. Current regulations permit private placement only to companies with total asset value of less than KRW 500 billion, while prohibiting listed companies, financial institutions and public corporations from issuing securities in the private placement.


2. EXPAND BUSINESS SCOPE OF SECURITIES COMPANIES

Comprehensive Financial Investment Business Entities will be allowed to open stock markets for non-listed shares and non-competitive trading markets using prices at KRX for listed stocks.


With the implementation of the revised FSCMA, securities firms will be allowed to register as hedge fund managers on condition that they have measures to prevent conflict of interest in place.

The FSC will facilitate utilization of securities provided as collateral by securities firms in repo transactions and securities lending to offer more opportunities for profits.


3. ALLEVIATE REGULATORY CONSTRAINTS TO ENCOURAGE DIVERSE SERVICES

Requirements for individuals and institutions to qualify for professional investors will be eased to enable more investors with sufficient knowledge to make investments within their own responsibilities.

More exemptions will be permitted to the separation of investment banking and brokerage businesses to boost synergies and provide consumers with more convenient services. The FSC, for example, plans to revise relevant regulations to allow IB departments of securities firms some of brokerage businesses such as trading short-term bonds and selling KONEX-listed and non-listed stocks.

* Please refer to the attached PDF for details.