Press Releases - Financial Services Commission

Press Releases

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Nov 24, 2021

FSC Revokes Business License of Optimus Asset Management

The FSC decided to issue a revocation of business license on Optimus Asset Management along with other penalty measures imposed on its employees at the 21st regular meeting held on November 24. Pursuant to the Financial Investment Services and Capital Markets Act, the FSC decided to revoke Optimus Asset Managements business license (effective immediately) for numerous counts of violations and inappropriate fund management activities linked to the large-scale redemption freeze causing massive investor damages in 2020. The FSC also decided to impose a fine of KRW114.4 million on Optimus Asset Management and order removal of key board members. The FSC also ordered a transfer of 43 funds in total that are currently managed by Optimus Asset Management to a new fund management companyRecovery Asset Managementthat has been set up by collective efforts of fund sellers. The FSC has designated the Korea Deposit Insurance Corporation to oversee Optimus Asset Managements liquidation process. The authorities will closely monitor the liquidation process and work on effective supervision to ensure that the transferred funds are properly managed by the newly appointed fund management company according to relevant laws. * Please refer to the attached PDF for details.
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Nov 23, 2021

KoFIU Holds International Conference Commemorating 20th Anniversary

The Korea Financial Intelligence Unit (KoFIU) hosted an international conference commemorating the 20th anniversary of its establishment on November 23.The conference was held to promote discussion on virtual asset and other important issues related to the anti-money laundering (AML) regime and foster strong international cooperation in this area. KoFIU Commissioner Kim Jeong-kag delivered a keynote address highlighting the importance of digital transformation and the critical role of the AML/CFT regime for building trust in the financial system. More specifically, Commissioner Kim discussed the need to make use of suptech in the AML/CFT regime and said that the emergence of new technologies and digital financial services makes it necessary for international organizations, regulatory authorities and financial institutions to work for closer cooperation and mutual understanding. On the recently revised Financial Action Task Force (FATF) recommendations on virtual assets and VASPs, Commissioner Kim said that the KoFIU will continue to work on regulatory improvements to ensure that the so-called travel rule for virtual assets and VASPs in Korea reflects global standards set forth by the FATF. The conference consisted of two sessions(a) virtual assets and the AML duties of virtual asset service providers and (b) digital transformation of the AML/CFT regime. Each session featured expert presentations followed by a panel discussion. Some of the notable participants to the venue included FATF president Marcus Pleyer and Thailands Anti-Money Laundering Office chief Piyapun Pingmuang. Officials from foreign FIUs also participated in the conference virtually. * Please refer to the attached PDF for details.
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Nov 22, 2021

FSC Announces Competitive Auction Result of KDIC's Stakes in Woori Financial Group

The FSC announced the result of the competitive auction of 9.3 percent of shares in Woori Financial Group held by the Korea Deposit Insurance Corporation on November 22. The Public Fund Oversight Committee has selected five winning bidders with bidding prices from all bidders exceeding KRW13,000 per share which is higher than the share price (KRW10,800) at the time the auction plan was unveiled on September 9. The five successful bidders are Eugene Private Equity (4%), KTB Asset Management (2.3%), Align Partners Consortium (1%), Dunamu (1%) and Woori Financial Groups employee stock ownership association (1%) with Eugene Private Equity earning the right to appoint an outside board member. With successful result of the auction, the KDIC will no longer be the largest shareholder of WFG and the governments goal of privatization of WFG has been accomplished in this round of auction some 23 years after the injection of public funds for bailout in 1998. The KDICs right to appoint a non-standing board member will expire when the current incumbents term ends in March 2022. The successful bidding result from this round will help recover KRW897.7 billion in public funds injected as bailout, with about KRW12.3 trillion out of the total KRW12.8 trillionor some 96.6 percentbeing recovered. A hundred percent recovery will be made possible if the KDICs holding of the remaining 5.8 percent stakes in WFG are sold at or above KRW10,193. It is expected that the KDIC will complete the share transfer process by December 9. The Public Fund Oversight Committee will work to promptly complete the sale of KDICs remaining shares in WFG at an appropriate time in the future. * Please refer to the attached PDF for details.
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Nov 10, 2021

Korean Translation of SASB Standards Made Available to Facilitate Sustainability Disclosures

The FSC announced that the authorities made available the Korean translated versions of the SASB (Sustainability Accounting Standards Board) standards to help facilitate businesses in adopting and complying with the sustainability disclosure rules. The International Financial Reporting Standards (IFRS) Foundation has recently created a new standard-setting bodythe International Sustainability Standards Board (ISSB)to offer global standards on sustainability disclosures. With the announcement of the plan to improve corporate disclosure rules in January 2021,the FSC unveiled plans to gradually expand the environmental, social and governance (ESG) disclosure requirements to all KOSPI-listed companies by 2030. Currently, some 130 Korean businesses are filing sustainability reports on a voluntary basis using various standards and recommendations offered by the Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD) or SASB. As it is widely expected that the newly created ISSB will develop global sustainability disclosure standards (expected in Q2 2022) based on the SASB standards (in particular, industry-specific standards sorted by sector), the authorities made available the Korean translated versionsof the SASB standards to help businesses prepare in advance. With an enhanced understanding of the SASB standards, the authorities expect that businesses will face less difficulties in preparing their sustainability reports. A wider usage of the SASB standards by companies will help increase consistency in sustainability reporting practices which will also help provide useful information to investors. The authorities will continue to promote ESG disclosure and help businesses prepare for global standards. *Please refer to the attached PDF for details.
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Nov 10, 2021

Household Loans, October 2021

The outstanding balance of loans to households increased KRW6.1 trillion in all financial sectors at the end of October 2021 (up 8.6% y-o-y).The balance of household loans increased KRW5.2 trillion in the banking sector and KRW0.9 trillion in the non-banking sector, showing a steady decline in the growth rate. All financial sectors (y-o-y): +10.0% (Jul) +9.5% (Aug) +9.2% (Sep) +8.6% (Oct) By type, mortgage loans went up KRW5.3 trillion in October, growing at a slower rate compared with the previous month (up KRW6.7 trillion) as the volume of housing transactions dropped. Other types of loans including credit loans grew at a slower rate (up KRW0.8 trillion) compared with the previous month (up KRW1.2 trillion). The growth of household loan balance has been steadily declining since July 2021. The financial authorities will continue to work for the seamless implementation of the household debt management measures announced in October. *Please refer to the attached PDF for details.
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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

Korea and UAE Sign MOU to Strengthen Bilateral Cooperation on AML and CTF

The Korea Financial Intelligence Unit signed a memorandum of understanding with the Financial Intelligence Unit of the United Arab Emirates on October 26 to strengthen bilateral cooperation on exchange of information regarding two countries anti-money laundering and counter-terrorism financing efforts. The MoU is based on a model MoU drafted and endorsed by the Egmont Group, which was founded in 1995 to promote closer cooperation between financial intelligence units around the world. The KoFIU has been working closely with the Egmont Group member countries for exchange of information on AML and CTF efforts. As a financial hub in the Middle East, the UAE hosts some 170 Korean enterprises with large volumes of bilateral trade. With the signing of an MoU, it is expected that bilateral cooperation on AML and exchange of information on suspicious transaction activities will be boosted between Korea and the UAE. The KoFIU has thus far signed such agreements with its counterparts in 71 countries and will continue to work for strengthening international cooperation in order to more effectively respond to cross-border money laundering activities. *Please refer to the attached PDF for details.
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Oct 13, 2021

Household Loans, September 2021

The outstanding balance of loans to households rose KRW7.8 trillion at the end of September 2021 (up 9.2% year-on-year) in all financial sectors.The balance of household loans increased KRW6.5 trillion in the banking sector and KRW1.4 trillion in the non-banking sector. All financial sectors (y-o-y): +10.0% (Jul 2021) +9.5% (Aug 2021) +9.2% (Sep 2021) By type, mortgage loans increased KRW6.7 trillion in September, growing at a slower rate compared with the previous month (up KRW7.1 trillion y-o-y). Other types of loans saw a rise of KRW1.1 trillion, falling from KRW1.5 trillion a month ago, due to a drop in both personal credit-based and credit card loans. The balance of household loans grew at a slower rate in September, although the volume of growth remains high compared to pre-pandemic levels. The financial authorities are currently working on additional measures intended to curb the household debt growth. The authorities will ensure that the measures address the needs of lower income groups. * Please refer to the attached PDF for details.
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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

Household Loans, August 2021

The outstanding balance of loans to households rose KRW8.5 trillion in all financial sectors at the end of August 2021 (up 9.5% y-o-y).The balance of household loans increased KRW6.2 trillion in the banking sector and KRW2.3 trillion in the non-banking sector. All financial sectors (y-o-y): +9.7% (Jun 2021) +10.0% (Jul 2021) +9.5% (Aug 2021) By type, mortgage loans went up KRW7.2 trillion in August, expanding at a similar level compared with the previous month (up KRW7.4 trillion) as housing market transactions remained active. Other types of loans including credit loans grew at a slower rate (up KRW1.4 trillion) compared with the previous month (up KRW7.9 trillion) due to large scale refunds of IPO subscription deposits taking place in the beginning of the month. The growth of household loan balance in August has dropped compared with the previous month but still remains above pre-pandemic levels. The financial authorities will continue to strengthen management until the trend of household debt growth shows signs of stability. * Please refer to the attached PDF for details.
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Sep 08, 2021

Joint Job Fair Held in Financial Sectors

The FSC announced the opening of the 2021 joint job fair in the financial industry which will be held online at www.financejobfair.co.kr between September 8 and 9. The 5th annual job fair event is co-hosted by six financial industry groups with 55 financial institutions offering employment opportunities to job seekers. The two-day event will feature one-stop career support services using AI technologies, career information sessions offered by employers, a chance to communicate with current employees as well as virtual interviews with employers. Chairman Koh Seungbeom delivered congratulatory remarks for the event and spoke about changing dynamics in employment conditions and efforts to create quality jobs in the financial sectors. More specifically, Chairman Koh said that the acceleration of digital transformation has also transformed job markets in the financial sectors, with contactless sales channels and automation of work becoming more prevalent. However, Chairman Koh stated that there are possibilities for creating new quality jobs as newly developed financial services become available using digital technologies. As such, Chairman Koh urged financial institutions to pay special attention on their new recruitment practices and pledged to work on improving conditions to help create more jobs in the financial sectors. * Please refer to the attached PDF for details.
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Aug 25, 2021

FSC Changes Rules to Allow Cross-border ETF Scheme with China

The FSC approved changes in the Enforcement Rules of the Financial Investment Services and Capital Markets Act and other relevant industry regulation to allow China-based exchange traded funds (ETFs) listed in the Shanghai Stock Exchange to be registered for sale by local asset managers in Korea effective from August 27 this year. The Korea Exchange and the Shanghai Stock Exchange signed an MOU in May this year to establish a cross-border ETF scheme (ETF Connected). However, the current regulatory framework allows only foreign based ETFs from OECD members, Hong Kong and Singapore to be eligible for registration in Korea. As such, the FSC changed the relevant rules for a seamless implementation of the cross-border ETF link between Korea and China. The authorities expect that there will be more opportunities for domestic investors to make investment in foreign assets. * Please refer to the attached PDF for details.
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Aug 11, 2021

Household Loans, July 2021

The outstanding balance of household loansin all financial sectors increased KRW15.2 trillion from the previous month at the end of July 2021 (up 10.0% y-o-y). The household loan balance rose KRW9.7 trillion in the banking sector and KRW5.6 trillion in the non-banking sector. All financial sectors (y-o-y): +9.6% (May 2021) +9.7% (Jun 2021) +10.0% (Jul 2021) By type, mortgage loans grew KRW7.5 trillion in July, rising at a faster rate compared with the previous month (up KRW6.4 trillion y-o-y) due to a steady rise in demand for jeonseloans. Other types of loans including credit loans expanded KRW7.7 trillion due to increased demand for large scale IPO subscriptions in the last week of July. The financial authorities will work to ensure that the pace of growth in household loans remains within the target of 5 to 6 percent for this year while also working to effectively implement the household debt management measures. * Please refer to the attached PDF for details.
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Jul 14, 2021

Household Loans, June 2021

The outstanding balance of household loans in all financial sectors rose KRW10.1 trillion from the previous month at the end of June 2021 (up 9.6% y-o-y). The household loan balance increased KRW6.3 trillion in the banking sector and KRW3.8 trillion in the non-banking sector. All financial sectors (y-o-y): +10.0% (Apr 2021) +9.6% (May 2021) +9.6% (Jun 2021) By type, mortgage loans expanded KRW6.3 trillion in June, growing at a faster rate compared with the previous month (up KRW4.5 trillion y-o-y) due to active housing market transactions. Other types of loans including credit loans increased KRW3.7 trillion, remaining at a similar level to the average monthly growth rate (up KRW4.5 trillion) in the first half of this year. The financial authorities will closely monitor trends in household loans while working to ensure an effective implementation of the household debt management measures. * Please refer to the attached PDF for details.
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Jul 13, 2021

FSC Grants Preliminary Approvals for Credit Information Business

The FSC granted preliminary approvals to Shinhan Card and Korea Technology Credit Bureau for their application to assume credit information business on July 13. The FSC decided that both companies satisfied all the requirements set forth by the Credit Information Act, such as the large shareholder qualification, etc. Shinhan Cards application was for individual business CB while that of Korea Technology Credit Bureau was for tech credit bureau (TCB). The granting of preliminary approvals for credit information business today is the first such decision made by the FSC since the revised Credit Information Act went into effect in August 2020.With the revised Act, it is expected that providing more accurate and diverse models for credit evaluation will become possible for both individual business owners and technology firms. This will also have a positive impact on the development of financial products suitable to the risk characteristics of different borrower types. * Please refer to the attached PDF for details.
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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

Indemnity Health Insurance 4.0 to be Available from July 1

The FSC announced the availability of indemnity health insurance 4.0 from July 1 with upgrades and improvements from the previous system. The indemnity health insurance 4.0 will offer a much more equitable premium payment system according to ones own needs and use of health care services, lower premium levels by about 10 to 70 percent compared with the previous services and provide those that are already covered an opportunity to easily switch to the newly available coverage plan. As the indemnity health insurance service first became available in 1999, about 39 million individuals as of the end of 2020 were found to be covered by indemnity health insurance coverage. With about 75 percent of the population using the indemnity health insurance service, it provides important social safety nets alongside the state-operated national health insurance (NHI) program. Key Details I. Lowering Premiums while Ensuring the Same Level of Coverage (Coverage) Indemnity health insurance 4.0 will provide the same level of coverage as previously available on most types of illnesses and injuries with the maximum coverage of about KRW100 million for both in- and outpatient services.However, in order to prevent moral hazard of excessive and unnecessary use and provision of medical services, out-of-pocket expenses and deductions for outpatient services will be increased. (Premium) Due to the increase in out-of-pocket expenses and outpatient deductions, insurance premiums will be significantly lower compared to the previous levels.Considering high levels of loss ratios, it is expected that premiums of newly available indemnity health insurance policies will be much lower in the future compared to the current levels. II. Improving the Premium Payment System (Non-covered Services) The current integrated management system for insurance coverage of both NHI-covered and non-covered services will be managed separately with differential premium rates applied to non-covered services plans. The in
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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.
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