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Oct 28, 2021
- FSC Chairman Pledges Support for Digital Transformation of Banking Industry
- FSC Chairman Koh Seungbeom met with the heads of major banks and industry group leaders in the banking sector on October 28 and held talks on ways to promote the banking industrys growth in the future. Chairmans Remarks With digital transformation taking place throughout the economy, the financial industry and banks are experiencing major changesincreased financial transactions through mobile and other contactless channels, unbundling and re-bundling of various financial services, financial services being offered through platforms, etc. Amid these changes taking place, it is necessary to think about the future of bank and ways to boost the competitiveness of the banking industry. To help foster the banking industrys advancement in the future, it is important to focus on the following three factors(a) digital transformation, (b) innovative business model and (c) fair competition. The FSC will work to provide active support for the industry in these areas. First, the authorities will work to create an environment where the idea of digital universal bank becomes possible through an integrated mobile app that offers a wide-array of financial services ranging from banking to insurance to stock trading, etc. The authorities will also look into ways to facilitate data sharing between financial and non-financial data and provide active support for banks making investments in new digital business areas. Second, the authorities will help facilitate banks to innovate their business models by allowing them to expand business areas into the comprehensive asset management sector and open up their investment advisory activities beyond the currently permitted real estate sector. Third, the authorities will continue to seek ways to foster a level playing field to promote financial innovation rooted in fair competition. Promoting advancement of the financial industry is a key task alongside maintaining stability in the financial system. The FSC will continue to closely communicate wi
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Oct 27, 2021
- FSC Orders Citibank Korea to Take Measures to Minimize Damage to Consumers
- The FSC decided to order Citibank Korea to take specific measures to ensure consumer protection and maintain order as the bank announced its plan to gradually phase out retail banking services. Under the Financial Consumer Protection Act, the FSC has the authority to order financial institutions such as banks to take measures when it is considered as necessary to protect consumer rights and maintian sound market order. The FSC decided to issue an official order to Citibank Korea as it is deemed to be highly likely that the banks move to close out its retail banking services will generate inconvenience and damage to consumers. The following are some of the key details of the order. a) Citibank Korea should draw up a detailed plan to minimize inconvenience to consumers, protect consumer rights and maintain sound market order and implement the plan faithfully in the process of its retail banking closure in Korea. b) Before the closure process begins, Citibank Korea should submit a specific plan to the Financial Supervisory Service, detailing basic principles on user protection, measures for user protection by product and service type, operational plan for sales channels, measures to ensure consumer data privacy and other measures regarding organizational, human resources, internal control, etc. The FSS will review the submitted plan and report to the FSC. The FSS will closely monitor Citibanks implementation status and report to the FSC if deemed necessary. *Please refer to the attached PDF for details.
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Oct 27, 2021
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Oct 13, 2021
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Sep 10, 2021
- FSC Chairman Meets with Heads of Major Financial Holding Companies
- FSC Chairman Koh Seungbeom met with the heads of major financial holding companies on September 10 and held talks on ways to strengthen household debt management as well as the issue of loan maturity extensions and payment deferrals. As it was the first time that Chairman Koh has held a meeting with the five CEOs of financial holding companies in his current role, at the beginning of the meeting, Chairman Koh laid out his principle of financial policy and supervisory role of the FSC as aiming for market-friendly policy and supervision with respect for the creativity and autonomy of financial institutions. With regard to the matters concerning internal management of individual institutions, such as interest rates, fees and dividends, Chairman Koh stated that he will respect individual firms decisions. Even when intervention is inevitable for the purpose of maintaining macroeconomic soundness and consumer protection, Chairman Koh said that interventions will take place at a minimum level through a fair and transparent procedure in a market-friendly and market-centered approach based on sufficient communication and collaboration with market participants. On the issue of household debt growth, Chairman Koh raised concerns about asset market overheating and the mutually reinforcing effects between the two. Chairman Koh spoke about household debt management as a top policy priority and pledged to effectively implement the measures in place while working to come up with improved measures. With regard to the loan maturity extensions and payment deferrals set to expire at the end of September, Chairman Koh said that the authorities are considering diverse factors, such as the demand from SMEs and small merchants, repayment burdens of long-term borrowers, potential default risks and so on, while emphasizing the importance of cooperation to arrive at a reasonable solution. Chairman Koh and the five CEOs also held talks on regulatory issues surrounding digital transformation an
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Sep 09, 2021
- FSC Announces 10% Stake in Woori Financial Group to be Sold
- The FSC announced its plan to sell ten percent of the remaining stake (15.13%) held by the Korea Deposit Insurance Corporation in Woori Financial Group through competitive bidding. Background With the goal of complete privatization of WFG, the government has been selling KDICs stake in WFG through a series of block sales and competitive auctions over the years. The sales allowed the government to recoup about 89.6 percent of public funds and afforded WFG with management autonomy as its MOU with the KDIC has been retracted in 2016. The KDICs sale of 29.7 percent stake in December 2016 further accelerated WFGs privatization process. However, as the KDIC still maintained the largest shareholder status, the Public Fund Oversight Committee announced the roadmap for selling remaining stake in WFG in June 2019. Thereafter, the KDIC sold two percent of its remaining stake through a block sale on April 9, 2021. After assessing market demand, on August 23, the PFOC decided to sell up to ten percent of KDICs remaining stake in WFG through competitive bidding. Details Ten percent of shares will be put up for sale with minimum bidding of one percent through a competitive auction with highest bidders winning the auction. However, when no workable competition is established or the bidding price is below the PFOC set price, the sales method may change to a block sale. Investors who newly acquire four percent or more of stake are granted right to recommend an outside director to the board. Successful sales of KDICs stake in WFG at this round may lead to the completion of the privatization process of WFG in essence, since the KDIC may no longer be the largest shareholder with its right to recommend an outside director also taken away. Schedule With the sales notice announced on September 9, letters of intent (LoIs) will be due on October 8 and the bidding will close and winning bidders selected in November. * Please refer to the attache PDF for details.
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Sep 08, 2021
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Sep 08, 2021
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Aug 25, 2021
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Aug 11, 2021
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Jul 14, 2021
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Jul 13, 2021
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Jul 06, 2021
- FSC Holds Symposium on COVID-19 Financial Policy
- The FSC and the Korea Institute of Finance co-hosted a policy symposium on the effectiveness of COVID-19 financial policy on July 6. FSC Chairman Eun Sung-soo attended the symposium and delivered a keynote address highlighting the progress of policy implementation and future policy direction. The following is a summary of Chairman Euns remarks. (COVID-19 Crisis Policy Response) In the wake of the COVID-19 pandemic, the government rolled out policies focusing on the prevention of risk transfer channels, provision of an exhaustive level of support and setting up firewalls in financial markets to help remove market anxieties. The authorities worked on stock market and bond market stabilization measures while prioritizing support for small-scale businesses. Financial support was extended to businesses of all sizes that have been hit by the pandemic. The KRW175 trillion-plus COVID-19 financial support programs were introduced to contain fear and anxiety in markets. This unprecedented level of financial support by the government helped to quickly stabilize the financial system, provide liquidity to small merchants and SMEs while preventing large-scale bankruptcies or job losses in key industries. As a result, the Korean economy saw the smallest negative growth last year while stock markets continue to set new record highs. In March this year, the IMF stated that Koreas decisive policy response has helped the country navigate the COVID-19 shock. (Future Policy Direction) In order to overcome the pandemic-induced crisis and be prepared for potential aftershocks, an orderly process for policy normalization is necessary. First, the government will maintain close monitoring on the status of virus prevention, real economy and financial market conditions as there still exist uncertainties, such as the spread of COVID variants. Second, the government will work to ensure financial stability by preemptively managing potential risk factors, such as an excessive accumulation of debt.
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Jun 29, 2021
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Jun 10, 2021
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Jun 10, 2021
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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.
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May 12, 2021
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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
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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
