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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
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Apr 14, 2021
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Apr 01, 2021
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Apr 01, 2021
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Mar 29, 2021
- FSC Chairman Vows Continued Support for SMEs
- FSC Chairman Eun Sung-soo visited the newly opened financial support center at the Korea Federation of SMEs on March 29 and held talks on the governments efforts in providing financial support to SMEs. The following is a summary of Chairman Euns remarks. The government has made various types of financial support available for SMEs and small merchants. It has abolished the joint and several liability by state-backed lending institutions and strengthened the provision of venture capital to promising SMEs and venture firms. To help with the COVID-19 crisis, maturity extensions and payment deferrals were made available from all financial sectors since April of last year. The recently announced six-month extension of maturity extension and payment deferral as well as the governments plan for a gradual normalization have taken into account various comments from SMEs and small merchants. As such, the authorities will work to ensure that these support measures are effectively implemented. For SMEs, there are growing concerns over deterioration in borrowing conditions, as their credit ratings will reflect last years decreased sales performance which may cause higher borrowing rates. To help mitigate these concerns, the authorities are in close consultation with the financial sectors. First, for SMEs undergoing a temporary hardship due to a worsening of business environment but are expected to bounce back soon after, their potential for recovery will be sufficiently taken into account when assessing their credit ratings. Second, for SMEs experiencing an unavoidable fall in credit rating, the authorities will work to minimize the impact on their maximum borrowing cap, interest rate, etc. Moreover, the government will work on measures to prepare for a post-pandemic economy. To help relieve the payment burdens after the expiration of maturity extension and payment deferral, consulting services will be provided to SMEs and small merchants to allow long-term installment payments b
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Mar 10, 2021
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Mar 08, 2021
- KoFIU's Upgraded AML System Demonstrates Significant Improvements
- The FSC announced that the Korea Financial Intelligence Unit (KoFIU)s upgraded anti-money laundering system in operation since December 17 of last year has shown significant improvements in terms of its suspicious transaction data processing, data screening and analysis and information security. The KoFIU began to operate an upgraded AML system from December 17, 2020to improve efficiency in data processing in response to the increasing volume of reports the system handles. In this regard, the past two months of operation has shown that significant improvements were made as intended. First, the suspicious transaction report filing system has become more efficient. The number of financial institutions filing STRs to KoFIU through an exclusive security network has been expanded to 3,664 from 611 previously. As such, the STR filing rate via exclusive security network has almost tripled from thirty percent to eighty-eight percent, with the processing time per STR reduced by more than ten seconds. Second, the screening and analysis process has been made more efficient with the increased use of digitalization and automation in the work process. The volume of preemptive screening and analysis of suspicious transactions has increased thirty-five percent on average compared to 2019. Third, the system hardware which is located at the National Information Resources Service guarantees much stronger levels of security and stability in management. The application of the standard framework on e-government has ensured an efficient integration of electronic resources and has improved the systems daily processing performance by more than nine times compared to the previous system. In order to more effectively respond to the increasingly diverse and complex types of money laundering schemes, the authorities will continue to work on improvements to the AML system. * Please refer to the attached PDF for details.
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Feb 10, 2021
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Feb 05, 2021
- Rules Change Announced for Insurance Businesses Specializing in Small-sum and Short-term Policies
- The FSC announced the revisions to the Enforcement Decree of the Insurance Business Act on February 4, setting entry requirements for the establishment of insurance businesses specializing in small-sum, short-term policies and introducing measures to improve the soundness of the insurance industry. The revisions will be put up for public notice for forty days until March 17, 2021. Key Revisions (Small-sum Shor-term Insurance Policies) The minimum capital requirement for setting up an insurance business specializing in small-sum, short-term insurance policies will be set at KRW2 billion. Small-sum, short-term insurance coverages will be allowed in all insurance coverage areas where applicable with a coverage term of one year, premiums of up to KRW50 million and the insurers annual gross premium revenues up to KRW50 billion. (Requirement for External Evaluation on 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 reserves. This requirement will also be applied to the insurers with less than KRW1 trillion in total assets but whose policy coverage types are considered as essential for them to ensure the payout capabilities. The external actuaries will be entitled to a right to request relevant information from insurance companies. To guarantee impartiality, external evaluations from the same institution will not be allowed for four consecutive years. (Rules on Subsidiaries) The revisions will clearly indicate that insurers will be permitted to own MyData and health care-related businesses as subsidiaries. Expectation The authorities expect that the revisions will help promote the development of diverse types of small-sum, short-term insurance products for consumers according to their individual lifestyle, improve the soundness and competitiveness of insurance businesses and encourage insurers to boost investment and cooperation in new business areas, su
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Jan 14, 2021
- FSC Plans to Improve Corporate Disclosure Rules
- Vice Chairman Doh Kyu-sang held a meeting with industry officials and experts via teleconference on January 14 and discussed the government’s plans to improve rules on corporate disclosure.The following is a summary of Vice Chairman Doh’s remarks.BACKGROUNDAs the pandemic situation continues, there are growing uncertainties throughout the economy and rapid changes are taking place in the business management environment. As such, the accuracy and promptness in corporate disclosure has become ever more important. Considering a surge in retail investors’ participation in stock markets last year, the disclosure rules need to be improved to allow retail investors to more easily understand disclosure information while reducing filing burdens for companies. In addition, with growing significance of environmental, social and governance (ESG) factors and responsible investing, it is necessary to set up an appropriate regulatory environment.PLANS FOR IMPROVEMENTI. IMPROVE INVESTOR CONVENIENCE IN USING DISCLOSURE INFORMATIONThe required criteria for company disclosure reports and the categorization system will be changed and redundancy will be removed to help improve retail investors’ understanding of disclosure information. An easy-to-understand information booklet will also be published for retail investors. In addition, the Data Analysis, Retrieval and Transfer (DART) System managed by the Financial Supervisory Service will be improved to make it more user-friendly with the introduction of more useful menu categories and enhanced search capabilities.II. REDUCE COMPLIANCE BURDENS FOR BUSINESSESQuarterly reports which have placed relatively heavy burdens on companies will be simplified to contain only key disclosure information, reducing the current requirement items by about forty percent. In addition, corporate filing burdens will be reduced for a greater number of smaller sized companies. III. PROMOTE ESG/RESPONSIBLE INVESTINGThe Korea Exchange will provide a guida
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Jan 14, 2021
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Jan 13, 2021
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Jan 07, 2021
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Jan 07, 2021
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Jan 05, 2021
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Dec 21, 2020
- FSC Chairman Reviews Policy Response to COVID-19 & Discusses Next Year's Financial Policy
- FSC Chairman Eun Sung-soo held a meeting via teleconference on December 21 to assess the implementation of the COVID-19 financial support programs and discuss the 2021 financial policy direction.At the meeting, Chairman Eun stated that the effective provision of the COVID-19 financial support packages was made possible due to close cooperation from all financial sectors, which also helped to create the right conditions for an economic rebound. As a result, out of the KRW175 trillion-plus stimulus programs, about 76 percent of the first phase emergency loan program for small merchants was provided within the first two months and some KRW32.5 trillion in special lending support for SMEs and middle market enterprises was provided in excess of the original target amount of KRW29.1 trillion. Since April, the financial authorities, local lenders and other relevant institutions were able to systematically respond to the crisis by holding financial risk assessment meetings thirty-one times.With regard to the protracted pandemic situation and the next year’s financial policy direction, Chairman Eun stressed the importance of strict compliance with virus prevention measures and urged cooperation from all financial sectors. As the COVID-19 pandemic continues to place burdens on small merchants and SMEs, Chairman Eun indicated his intention to focus on the vulnerable sectors.Chairman Eun also pledged to preemptively manage risks emanating from abundant market liquidities by preventing concentration of liquidities in high risk assets and promoting an orderly deleveraging.Finally, Chairman Eun called for financial institutions to take a leading role in the country’s transition toward a “first mover” economy in the post-pandemic era, highlighting the importance of their active participation in the government’s New Deal initiative and carbon neutral goal for 2050.* Please refer to the attached PDF for details.
