The FSC approved the revisions to the regulation on financial investment services on March 17 as a follow-up measure to the effort to improve the regulatory framework on private equity funds announced on April 27, 2020.The revised rules will go into effect from March 18, 2021 unless otherwise noted below.

 Key Revisions

a) Strengthen rules on the management of cross trading and leveraged schemes, such as total return swaps (TRS)

b) Strengthen oversight over inappropriate sales practices by prohibiting the management of PEFs in violation of prospectus requirements

c) Bolster the minimum equity capital requirement for professional PEF management firms

d) Require asset management firms to report compliance on their internal control and risk management duties and expand their reporting duties on PEFs to include risks and risk management status