The Financial Services Commission announced the designation of comprehensive financial investment business entities (CFIBEs) at the 20th regular meeting held on November 19. The FSC decided to designate Korea Investment & Securities and Mirae Asset Securities as CFIBEs with the minimum equity capital level of KRW8 trillion, while Kiwoom Securities has been designated as a CFIBE with the minimum equity capital level of KRW4 trillion. Kiwoom Securities has also been authorized to engage in a short-term financing business.
The newly designated CFIBEs have each been making relevant preparations for the operation of investment management account (IMA) and promissory note services, by acquiring the satisfactory level of personnel and facilities capacities, preparing internal control mechanisms, and setting up measures to prevent conflicts of interest. Korea Investment & Securities and Mirae Asset Securities plan to develop IMA products with the goal of introducing them in the market within this year. Kiwoom Securities also plan to introduce promissory notes within this year. This will help to open up and diversify investment options and mechanisms made available for the public and facilitate the sharing of profits from CFIBEs’ asset management services.
Meanwhile, the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) at the cabinet meeting held on November 18, 2025. The revised rules, which make CFIBEs subject to the supply of venture capital, are intended to propel the financial investment sector’s transition toward productive finance. Along with expected revisions to subordinate rules and regulations, the revised Enforcement Decree will take effect next week (between November 25 and 27).
Key Revision Details
Requiring CFIBEs to supply venture capital
To promote more active supply of venture capital from the CFIBEs that are engaged in IMA and promissory note services, the revised rules will make them subject to the duty of venture capital supply. More specifically, the qualified CFIBEs will be required to supply venture capital in the size of 25 percent of the capital raised through their promissory note and IMA services.
The supply of venture capital can take the form of supply of funds or stock investments in SMEs, MMEs, and venture businesses, debt securities with “A” or below ratings, purchase of primary collateralized bond obligations (P-CBOs), assisting SMEs with non-recourse receivables financing, investments in venture capital, venture capital businesses, high-yield funds, investments in high-tech strategic industry fund and business development companies (BDCs), etc.
Downsizing CFIBEs’ real estate asset management
Previously, CFIBEs have been able to manage up to 30 percent of assets that are drawn from the issuance of promissory notes and IMA in real estate assets. However, with the growing need to channel highly concentrated capital away from the real estate sector to more productive areas in the form of venture capital, the current cap of 30 percent placed on the management of real estate assets will be downsized to 10 percent in stages.
Expanding CFIBEs’ service scope and facilitating the use of foreign currency securities
To help improve the competitiveness of CFIBEs’ corporate financing activities, the scope of their prime brokerage services will be expanded to include venture capital, new technology business cooperatives, and real estate investment trusts (REITs). In addition, the CFIBE designation criteria will be strengthened. The equity capital requirement will be deemed as satisfactory when meeting above-the-threshold level for two consecutive years based on their year-end settlement data. To facilitate a step-by-step expansion of their corporate financing services, CFIBEs will be eligible to move up from the KRW3 trillion equity capital level to the KRW4 trillion and then to the KRW8 trillion equity capital level in two-year intervals at each stage. CFIBEs will also need to meet the business plan, social credibility, and largest shareholder requirements.
At the same time, the current rule applied on the foreign currency securities owned by securities companies, which require them to be deposited at overseas custodian institutions in the accounts held by the Korea Securities Depository, will be eased to facilitate financial investment businesses to make use of foreign currency securities for collateral and securities lending purposes in overseas transactions.
Additional Measures to Boost Supply of Venture Capital
In the process of upgrading rules on capital markets and designating new CFIBEs, the FSC has drawn up additional measures to strengthen the role of CFIBEs to promote more active supply of venture capital.
First, in the process of supplying the required volume of venture capital (25 percent of the capital raised through promissory notes and IMA), it may be possible that CFIBEs demonstrate a higher tendency for making relatively lower-risk investments. Considering this, the volume of CFIBEs’ investments in investment-grade bonds and middle market enterprises (MMEs) will be recognized only for up to 30 percent for compliance purposes regardless of the actual amount of investments.
Moreover, there will be measures to help strengthen the role of CFIBEs in providing relevant infrastructures for the KOSDAQ market. Making the KOSDAQ market more competitive is a necessary condition for facilitating a virtuous cycle in the venture capital ecosystem. Although there are various factors that can explain institutional investors’ low participation in the KOSDAQ market, such as high volatility and low market capitalization, one of the main reasons has been insufficient provision of data on business analysis.
In this regard, the newly designated CFIBEs (Korea Investment & Securities, Mirae Asset Securities, and Kiwoon Securities) have shown plans to expand the operation of their corporate research departments that will be specifically tasked to produce business analysis reports on KOSDAQ-listed companies. To help encourage other CFIBEs to follow suit, the FSC plans to continue to coordinate with related authorities and industry groups.
Further Plan
With regard to the required volume for venture capital supply, the recognized cap (30 percent) placed on investment-grade bonds and investments on MMEs will be implemented through administrative guidance at first, while a revision to relevant rules will be sought to establish a regulatory ground thereafter.
In addition, a procedure for designating additional CFIBEs will take place promptly as soon as the required review process is completed. Within this year, a private-public consultation body will be launched to continue to seek ways to strengthen the role of CFIBEs to help increase the supply of venture capital.