Press Releases - Financial Services Commission

Press Releases

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Mar 04, 2024

Rule Changes Proposed for Upgrading Regulation on Corporate Mergers and Acquisitions

The Financial Services Commission issued a preliminary notice of rule changes being proposed for improving regulations on corporate mergers and acquisitions under the Financial Investment Services and Capital Markets Act (FSCMA). The revisions being proposed for the enforcement decree of the FSCMA and its subordinate regulation on the issuance and disclosure of securities contain measures to strengthen disclosure duties, improve the process of external evaluation, and upgrade the method for calculating merger prices. First, with regard to enhancing disclosure duties, the revision proposal mandates listed companies to disclose written statements about their board of directors meetings with details regarding what has been discussed and decided on MA related issues. This will ensure that general shareholders can have access to information regarding corporate MA activities. The board of directors written statement should contain information about the purpose of merger, its anticipated effect, merger price and ratio, as well as any dissenting opinion. The board of directors written statement about MAs should be disclosed as an attachment to the securities registration and material disclosure for that particular year. This will help to ensure more responsibility from boards of directors and increased fairness and transparency in the process of MAs. Second, regarding rules on the external evaluation process, the revision proposal establishes a code of conduct for external evaluation agencies to bolster fairness and credibility. In this regard, external evaluation agencies will be required to maintain their own quality management standards, or otherwise be barred from serving as an external evaluator. Their quality management standards should address issues relating to the maintenance of autonomy, objectivity, and fairness, conflicts of interest, confidentiality, and actions to be taken for misconduct. An external evaluation agency offering third-party evaluation service to
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Feb 28, 2024

Rule Changes Proposed Regarding Insider Transactions under the FSCMA

The Financial Services Commission issued a preliminary notice of rule changes being proposed concerning the ex-ante disclosure requirement for insider transactions under the Financial Investment Services and Capital Markets Act (FSCMA). With regard to the ex-ante disclosure requirement for insider transactions, the revision proposal specifies the entities that will be exempted from the disclosure duty, the volume and type of transactions that will be exempted from the disclosure duty, and the procedure and method for disclosure. First, the rule changes being proposed exempt pension funds and other financial investors that are expected to have higher levels of internal control standards and are unlikely to misuse material nonpublic informationsuch as collective investment vehicles, banks, insurance companies, specialized credit finance companies, financial investment businesses, venture capital firms, and the Korea SMEs and Startups Agencyfrom the duty to disclose their stock transaction plans in advance for insider transactions. Moreover, an exemption from the ex-ante disclosure duty will also be granted to foreign investors that are deemed to have an equivalent status to the above mentioned domestic financial investors to ensure more equal treatment of both domestic and foreign investors. Second, the rule changes being proposed grant an exemption if the volume of transactions in particular securities typesover the past six months is less than one percent of the total number of shares issued by the company within that particular year and if the total amount of transactions is less than KRW5 billion. Moreover, an exemption from the ex-ante disclosure duty will also be granted for transactions resulting from a statutory requirement, tender offers, or acquisitions or dispositions following corporate spin-offs or mergers. Third, the rule changes being proposed require that companies insider transaction plans specify the expected transaction price and volume as well as t
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Feb 27, 2024

FSC Vice Chairman Holds Investor Relations in Singapore and Introduces the Corporate Value-up Program

Vice Chairman Kim Soyoung of the Financial Services Commission held an investor relations event in Singapore with major institutional investors from Asia participating on February 27. During the dialogue, Vice Chairman Kim outlined the governments capital market reform initiatives with a particular attention on the recently announced Corporate Value-up Program, which have gained much interest from both domestic and overseas investors. The following is a summary of Vice Chairman Kims remarks. The Korean governments capital market reform measures have been focused on the following three areas. First, to establish a fair and transparent market order, the government has bolstered measures against unfair trading activities. A temporary ban on short-selling has been put in place to make trading conditions more equal for both retail and institutional investors and to build a completely electronic short-selling transaction system designed to prevent naked short-selling activities. Second, to make Koreas capital markets more accessible to investors, the authorities have already abolished the foreign investors registration requirement, mandated companies to file disclosures in English in phases, and eased the reporting requirement to facilitate the use of omnibus account. To help expand domestic investor base, the government has already decided to repeal the planned introduction of capital gains tax on financial investments and plans to expand tax benefits for individual savings accounts (ISAs). Third, to promote shareholder values in corporate management practices, the government has been consistently working on various measures aimed at protecting the rights of general shareholders. As a consequence, many large companies have now adopted the improved dividend payout procedure in which investors are able to make investment decisions while knowing how much they will receive in dividends. In addition, the Corporate Value-up Program, which was unveiled on February 26, is design
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Feb 26, 2024

Mortgage Loans from Banks to be Subject to Stressed Debt Service Ratio Limits from February 26

The Financial Services Commission announced that home-backed mortgage loans issued by banks will be subject to the stressed debt service ratio (DSR) rule from Monday, February 26. The stressed DSR systemimposes a certain level of additional stress rate when calculating the borrowers DSR as it takes into account the possibility of heavier repayment burdens with increases in future interest rates. From February 26 to June 30, 2024, an additional stress rate of 0.38 percent will be applied to mortgage loans from banks. Accordingly, the maximum amount a borrower can take out for a mortgage loan will be lowered by a two to four percent depending on how the mortgage payment schedule is structured. As the authorities plan to gradually phase in the stressed DSR system to help minimize shock to borrowers, its application will be expanded to credit loans issued by banks and home mortgage loans issued by nonbanks in the second half of this year. While closely monitoring how the market is adjusting to the system, the authorities will expand its application to all types of household loans subject to the DSR rule from 2025. The FSC expects that the newly introduced stressed DSR rule will help lenders to more closely examine borrowers repayment capability with a mid- to long-term perspective and help consumers to become more aware of the risk of interest rate volatility in the long term, thereby helping to improve the structure of household debt in qualitative terms. * Please refer to the attached PDF for details.
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Feb 26, 2024

Active Support to be Provided to Promote Voluntary Efforts of Listed Companies in Enhancing Their Value

The Financial Services Commission held the first seminar on the Corporate Value-up Program for the advancement of the Korean stock market together with the Korea Exchange, other related institutions, and industry groups on February 26. At todays seminar, key details of the Corporate Value-up Program, which have been jointly prepared by related institutions, were introduced to facilitate discussions and collect opinions from various stakeholders. FSC Chairman Kim Joo-hyun delivered opening remarks outlining the governments reform initiatives to bring about fundamental changes in our capital markets. They include (a) establishing a fair and transparent market order, (b) improving accessibility to capital markets, and (c) strengthening protection for general shareholders. To build up a positive feedback loop in our capital markets where listed companies are able to get proper valuation for sound growth and investors are able to share the profit of that growth and reinvest in the Korean capital market, the government needs to support companies voluntary efforts to raise their value, the Chairman said. He added that the Corporate Value-up Program will be implemented continuously as a mid- to long-term project to support companies value enhancement efforts and promote management practices that place a priority on shareholder value. Key details of the Corporate Value-up Program are as follows. In order to actively support listed companies self-driven efforts to improve their corporate value, the government and relevant organizations set out a framework to implement the Corporate Value-up Program. The framework consists of three pillars: (a) supporting listed companies to prepare, implement and communicate their corporate value-up plans, (b) supporting investors in making informed evaluations and investments in companies that demonstrate outstanding improvements or high value, and (c) establishing a dedicated system to support the implementation of the Corporate Value-up Pr
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Feb 26, 2024

FSC Vice Chairman to Visit Singapore and Thailand to Promote Overseas Expansion of Korean Financial Industry

Vice Chairman Kim Soyoung of the Financial Services Commission will travel to Singapore and Thailand on February 26 to 29 to promote overseas expansion of domestic financial industry. Since launching an organization (Financial Industry Globalization Taskforce) in charge of overseeing global expansion of Koreas financial services in March last year, the FSC has been making efforts to boost global exchanges with aims to export domestic financial services. Vice Chairman Kims overseas trip this time will be the third of its kind since last years trips to Central Asia and Southeast Asia, and he plans to actively support overseas expansion of domestic financial sector and attract investment. During the visit to Singapore, one of the important global financial hubs, Vice Chairman Kim along with officials from the Korea Exchange and Korea Securities Depository will hold a roundtable meeting with major institutional investors from overseas and explain about the Korean governments efforts to upgrade capital market regulations. At this roundtable meeting, the Vice Chairman will discuss in detail key points about the Corporate Value-up Program, which has gained significant interest from investors at home and abroad. In Singapore, Vice Chairman Kim will also attend a memorandum of understanding signing event between the banking industry associations of both countries to deliver congratulatory remarks on vibrant exchanges taking place between the two organizations. During his visit to Thailand, Vice Chairman Kim will meet with the heads of the Bank of Thailand and the Securities and Exchange Commission of Thailand and hold talks on developing mutually constructive and friendly relationship between the two countries. In addition, Vice Chairman Kim plans to meet with Korean companies doing business in Thailand to listen to their needs and challenges in doing business there. Vice Chairman Kims visit to Singapore will be very meaningful this time as it will provide an opportunity to
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Feb 21, 2024

FSC Approves Regulatory Change to Improve Prudential Management on Mutual Finance Businesses

The Financial Services Commission approved a partial revision proposal for the supervisory regulation on mutual finance businesses at its third regularly scheduled meeting held on February 21. The regulatory change is aimed at improving prudential management on mutual finance businesses by bolstering their loss absorbing capacity against exposures to the construction and real estate sectors. Mutual finance businesses are currently required to set aside higher levels of loss provisions for their loans extended to the construction and real estate sectors, more so than the level of loss provisions required for ordinary business loans. This revision to the supervisory regulation will subject them to a 30 percent higher loss provisioning requirement for their exposures to the construction and real estate sectors, which is on a par with the loss provisioning requirement currently applied to savings banks and specialized credit finance companies for their real estate project finance loans. This regulatory change will take effect immediately at the time of promulgation. However, considering market conditions and industry concerns, the authorities will gradually phase in the additional loss provisioning requirement by 10 percent each time beginning in June 2024. Thus, the mutual finance businesses loss provisioning requirement for exposure to the construction and real estate sectors will be increased to 110 percent of the current level by the end of June 2024, to 120 percent by the end of December 2024, and to 130 percent by the end of June 2025. * Please refer to the attached PDF for details.
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Feb 21, 2024

FSC Announces a Plan to Expand Open Banking Services

Vice Chairman Kim Soyoung of the Financial Services Commission held a meeting with officials from relevant organizations and industry groups on February 21 to discuss ways to improve infrastructures for financial innovation and announced a plan to expand open banking service. In his opening remarks, Vice Chairman Kim said that the two major infrastructures open banking and MyData systems - introduced to promote digital innovation in the financial sector have made accomplishments in improving convenience for financial consumers and enabling innovative financial services. The open banking service, introduced in December 2019, has become an essential payment infrastructure for enabling various fintech solutions in payment, money transfer, wealth management and cross-border payment, etc. by prompting financial companies to open up their closed payment networks. The API-based MyData service, introduced in January 2022, has also allowed financial consumers to make account inquiry with ease and exercise more control over their own data, paving the way for the availability of innovative financial services including online platforms for switching loans or comparison and recommendation services of insurance products. Building on the achievements, Vice Chairman Kim outlined policy directions for further improvements in open banking and MyData services and announced a plan to expand the open banking service. Under the plan, first, the FSC seeks to expand the scope of data available in open banking from personal accounts to business accounts so that companies can make account inquiry across different banks in real time at once. With business account data available in open banking services, financial companies will be able to use such data including account balances and transaction record to launch new services in fund management for their corporate clients. Second, open banking service, currently available online only, will be provided through offline channels such as bank branc
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Feb 20, 2024

Authorities Hold Meeting on Household Debt Related Risks

Vice Chairman Kim Soyoung of the Financial Services Commission presided over a meeting with relevant authorities and organizations on February 20 to discuss current household debt situation, related risks and future expectations. At the meeting, the authorities also went over the situation with policy mortgage loans and held talks on ways to improve the quantitative and qualitative structure of household debt. The preliminary data on household credit released by the Bank of Korea for the year of 2023 showed an increase of KRW18.8 trillion (up 1.0 percent) from the previous year. When compared to the ten-year (2013-2022) average growth of about KRW90 trillion a year in previous years, the current pace of growth appears to be on a very stable footing. At the meeting, participants expressed favorable views on the stable management over household credit. However, with expectations about interest rate cuts this year and a potential recovery in the housing market, authorities shared the same view on the need to more systematically manage the pace of growth. In this regard, Vice Chairman Kim said that the authorities will make efforts to ensure that the pace of household debt growth stays within the level of annual economic growth in 2024. Although there may be challenges along the way, such as rising demand for loans due to expectations for interest rate cuts and excessive competition between lenders, Vice Chairman Kim said that the authorities will work on the following measures. First, the authorities will continue to maintain close communication with all financial sectors. The Financial Supervisory Service will keep close tabs on how lenders are handling loans by their type and use, while requiring self-adjustment measures from the lenders deemed to be extending credit too rapidly. Second, the authorities will strictly manage the supply of policy mortgage loans to ensure the availability of housing loans to non-speculative homebuyers and renters, while taking appropria
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Feb 15, 2024

Government Unveils KRW76 Trillion Worth Corporate Financing Support Plans in Private-Public Joint Initiative

Chairman Kim Joo-hyun of the Financial Services Commission presided over a meeting with the heads of five major commercial banks and policy financial institutions on February 15 and announced the governments plans to provide tailored funding support for enterprises. The FSC has held a series of meetings with businesses to listen to their challenges and difficulties in financing business operations. To make sure that the prepared measures can actually serve the needs of businesses, the FSC has actively collaborated with the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups. The support measures being introduced today are also an outcome of active participation and contribution from policy financial institutions as well as from major commercial banks. In his opening remarks, FSC Chairman Kim Joo-hyun said that the future of Korean economy depends on the competitiveness of our enterprises, and that to boost our industrial competitiveness through new initiatives to ensure a continuous growth amid uncertain business environment, it is essential to have finance play an active role. In this regard, Chairman Kim stressed that it is necessary to have (a) a large-scale investment support for high-tech industries, (b) a targeted investment support for middle market enterprises, and (c) assistance programs made available for businesses undergoing challenging situations due high interest rates and so on. The corporate financing support plans being unveiled today consist of the following three key measures. First, authorities have prepared strategic financing support plans worth KRW26 trillion-plus for high-tech enterprises. A supply chain stabilization fund will be created to help businesses seeking to diversify imports, develop alternative technologies, and secure raw materials from overseas. The Korea Development Bank (KDB) will provide KRW15 trillion in financing support to the five major strategic sectorssuch as
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Feb 14, 2024

Household Loans, January 2024

In January 2024, the outstanding balance of household loans across all financial sectors edged up KRW0.8 trillion (preliminary), a growth of KRW0.6 trillion from the previous month (up KRW0.2 trillion). * Change (in trillion KRW, y-o-y): +6.1 (Aug 2023), +2.4 (Sep), +6.2 (Oct), +2.6 (Nov), +0.2 (Dec), +0.8 (Jan 2024p) (By Type) Home mortgage loans increased KRW4.1 trillion, edging up at a slightly slower rate than the previous month (up KRW5.0 trillion). Mortgage loans from banks rose at a somewhat slower rate (from up KRW5.1 trillion a month before to up KRW4.9 trillion in January 2024). Mortgage loans from nonbanks fell at a faster rate (from down KRW0.1 trillion a month before to down KRW0.8 trillion in January 2024). Other types of loans dropped KRW3.3 trillion. (By Sector) Household loans grew at a somewhat faster rate in the banking sector, while falling at a slower rate in the nonbanking sector. Banks saw a rise of KRW3.4 trillion in January 2024, up from KRW3.1 trillion a month ago. Home mortgage loans from banks grew KRW4.9 trillion, a slowdown from KRW5.1 trillion a month before, due mainly to a significant drop in the issuance of new policy mortgage loans. Other types of loans from banks dropped KRW1.5 trillion, declining at a slower rate than the previous month (down KRW2.0 trillion). Household loans from nonbanks fell KRW2.6 trillion, declining at a slower rate compared to the previous month (down KRW2.9 trillion). Mutual finance businesses and insurance companies saw drops of KRW2.5 trillion and KRW0.5 trillion, respectively, while specialized credit finance businesses and savings banks saw increases of KRW0.4 trillion and KRW0.1 trillion, respectively. (Assessment) Since the level of growth in January 2024 is about a quarter of the monthly average in the second half of last year, the pace of household loan growth remains at a stable level. However, as there are possibilities for changes in the future, financial authorities will keep close tabs on hous
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Feb 14, 2024

Authorities Meet to Discuss ESG Disclosure Standards

The Financial Services Commission held a meeting with officials from industry groups, investors, related organizations and private sector experts on February 14 to have a discussion on the preparation of domestic disclosure standards for environmental, social and governance (ESG) management. FSC Vice Chairman Kim Soyoung presided over the meeting and delivered opening remarks, outlining trends in global disclosure standards and direction for domestic ESG disclosure standards. The following is a summary of Vice Chairman Kims remarks. Global interest on ESG and sustainable growth has led to the strengthening of ESG policy and regulations in global capital markets. To facilitate domestic firms to more effectively respond to this, the government has been making efforts to support the sustainable growth of our economy and businesses. As a part of this, the FSC had introduced a general direction for pursuing ESG disclosure standards at a taskforce meeting held in October last year. Considering trends in major countries, authorities had agreed to adopt ESG disclosure standards from after 2026 and agreed to consider an exchange filing requirement and an application of a minimum level of sanctions during an early stage. Moreover, authorities had agreed on considering the adoption of climate-related disclosure standards first as there is an international consensus already established on this. ESG disclosure standards are aimed at making sure that information about corporate sustainability practices can be disseminated to investors in a more systematic way, thereby helping to resolve the problem of information asymmetry between companies and investors. Many firms have been filing sustainability reports on a voluntary basis, but the lack of common standards made them difficult for comparison. Therefore, the government has been working with related organizations, such as Korea Accounting Institute, in preparing ESG disclosure standards to be adopted by domestic stock companies.
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Feb 13, 2024

FSC Proposes Rules Change Introducing Responsibilities Map to Bolster Internal Control of Financial Companies

The Financial Services Commission issued a preliminary notice regarding a revision proposal for the enforcement decree of the Act on Corporate Governance of Financial Companies and its supervisory regulation on February 13. In December last year, a partial revision to the Act on Corporate Governance of Financial Companies (the Act hereinafter) was passed by the National Assembly, paving the way for financial companies to adopt responsibilities maps and have their executive officers manage internal control duties in their lines of work. As a follow-up to this, the revised enforcement decree and supervisory regulation being announced today specifically deal with the issues delegated by the Act, such as how to prepare for a responsibilities map and when and how to submit it, as well as details about the internal control oversight duty of chief executive officers. First, the revision proposal deals with specific details concerning how to write and submit responsibilities maps. A responsibilities map should be written with details about the scope of internal control responsibilities of each executive officer demonstrating a well-balanced division of responsibilities. Financial companies will be required to submit responsibilities statements, detailing each executive officers duties and responsibilities, as well as responsibilities diagrams, mapping out responsibilities of their executive officers in relation to one another in a visual manner. The responsibilities maps should be submitted to the financial authority within seven business days from the time of approval from their boards. The term responsibilities refers to the internal control and risk management duties relating to the business operations of a financial company. The business operations of a financial company are categorized into (a) the company-wide oversight functions, such as internal audit, compliance, and risk management, (b) the authorized sales and marketing related functions, such as lending and depo
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Feb 08, 2024

FSC to Ensure Thorough Preparation for the Enforcement of the Act on the Protection of Virtual Asset Users

The Financial Services Commission announced that the Act on the Protection of Virtual Asset Users (the Act hereinafter) will take effect from July 19, 2024. This law was enacted on July 18, 2023 with aims to protect the users of virtual assets and maintain an order in the market. The Act largely deals with (a) protection of assets held by users of virtual assets, (b) prohibition of unfair trading activities in the virtual asset market, and (c) supervision and sanctions authority over virtual asset service providers (VASPs) and related market activities. To provide specific details delegated by the Act, the FSC had prepared an enforcement decree and a supervisory regulation and sought public comment between December 11, 2023 and January 22, 2024. Major details of the current legislative framework on the protection of virtual asset users are as follows. First, VASPs have the duty to safely keep deposits and virtual assets owned by users. Banks have been selected as the sole financial institutions eligible to carry out the handling and custody of user deposits. To ensure safe protection of users assets, VASPs need to keep more than a certain level of users assets in cold wallets (minimum 80 percent of virtual assets economic value). To be prepared for incidents of hacking or computer failure, VASPs need to have a liability insurance or set aside a reserve to be able to meet demands for compensation. In transactions involving virtual assets, the acts of using undisclosed material information, manipulating market prices, and engaging in unfair trading activities are all prohibited and punishable by either a criminal penalty or a penalty surcharge. A criminal sentence of minimum one year of imprisonment or a fine of more than three times and up to five times the amount of unfairly gained profits can be imposed. Violators may face up to a life sentence depending on the amount of unfairly gained profits (if more than KRW5 billion). Imposing a penalty surcharge at double the
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Feb 07, 2024

Financial Development Review Committee Meets to Discuss Financial Policy Agenda for 2024

The Financial Services Commission held this years first financial development review committee meeting on February 7. At todays meeting, seven new members were appointed to the committee, and the authorities discussed key financial policy plans for 2024. Under the vision of a caring and reliable finance, standing by the people, the FSC presented three key policy objectives for this year(a) a credible finance, safeguarding peoples livelihood, (b) a robust finance, capable of withstanding risks, and (c) a dynamic finance, propelling growth into the future. The FSC plans to carry out detailed policy initiatives in nine specific areas to achieve these goals. At the beginning of the meeting, FSC Chairman Kim Joo-hyun said that while successfully dealing with various issues to ensure stability in financial markets, this year, the FSC will particularly focus on boosting the value of our capital markets by introducing a corporate value-up program and making efforts to ensure maintenance of strict market discipline. At the same time, Chairman Kim also pointed out that it is important to seek measures to actively prepare for impending changes in the future. As many experts have suggested, shifting demographic structures, climate change and advancement in technologies are expected to have far-reaching impacts on financial markets. In this regard, Chairman Kim stressed that how we respond in taking up these new challenges will shape the future of our economy. To effectively deal with these challenges, Chairman Kim said that authorities will set up and operate taskforces on demographic, climate and technology issues to more accurately analyze and prepare response strategies. * Please refer to the attached PDF for details.
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Feb 06, 2024

FSC Holds Meeting and Announces Plans to Upgrade Rules on Corporate Mergers and Acquisitions

Vice Chairman Kim Soyoung of the Financial Services Commission presided over a meeting with officials from related organizations and industry groups on February 6 and announced plans to improve rules on corporate mergers and acquisitions (MAs). The measures are aimed at strengthening protection for investors, which will also help to boost regulatory consistency with global standards. At the meeting, Vice Chairman Kim delivered opening remarks, outlining some of the problems observed in the market and policy proposals to address them. The following is a summary of Vice Chairman Kims remarks. Corporate MAs are important mechanisms to promote growth and innovation in a company and boost dynamism in an economy. Securing a competitive edge through MAs has become ever more important when considering recent economic conditions, such as interest rate hikes and global economic slowdown. Meanwhile, MAs are important corporate decisions which can significantly influence the governance structure and share value of a company, and thus are also very important from the perspective of guaranteeing the protection of rights for general shareholders. For this, authorities have worked to ensure that companies get consent from their shareholders when pursuing MAs and to provide sufficient protections for dissenting shareholders. However, in corporate MAs, there continues to be the problem of general shareholders being sidelined, with their voices not being heard enough. In this regard, there have been concerns about the lack of sufficient information available on the reasons for undertaking MAs and their processes as well as important decision-making by boards of directors. At the same time, there have been also complaints about the rigidity in rules concerning the method of calculating merger prices, which have not been able to take into account the corporate restructuring demands of companies in a more autonomous way. To address these issues, in May last year, the FSC announced a set
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Feb 05, 2024

FSC and MOIS Sign MOU to Bolster Prudential Supervision on MG Community Credit Cooperatives

The Financial Services Commission announced that it has signed a memorandum of understanding (MOU) with the Ministry of the Interior and Safety (MOIS) to strengthen cooperation between the two organizations to bolster supervision over MG Community Credit Cooperatives (MGCCC) on February 5. In the wake of large-scale deposit outflows that took place at MGCCC last year, the FSC and the MOIS came to agree on the need to expand the role of financial authorities in carrying out prudential supervision over MGCCC. Shortly thereafter, in December last year, the Financial Supervisory Service (FSS) and the Korea Deposit Insurance Corporation (KDIC) each set up an internal organization tasked with supervising MGCCC. In this regard, todays agreement lays out rules and principles needed to build a stronger cooperative supervisory network between the two organizations. Key details of the agreement are as follows. First, regarding the rules and procedures, the MOIS will decide on MGCCCs prudential management standard in consultation with the FSC and on a par with the prudential standards observed by other types of mutual financial businesses. Second, regarding information sharing, the FSC will be able to regularly and frequently receive information needed to ensure prudential supervision over MGCCC from the MOIS. Third, regarding inspection and post-inspection measure, the MOIS and the FSC will mutually consult with each other in establishing a plan for inspection and deciding on a post-inspection measure. At the MOU signing event, FSC Chairman Kim Joo-hyun pledged to actively cooperate with the MOIS and urged related authorities to make sure a seamless operation of the joint inspection units. The government expects that this agreement will serve as a first step in helping to bolster prudential supervision on MGCCC. * Please refer to the attached PDF for details.
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Feb 01, 2024

FSC Proposes Revision to Supervisory Regulation on Electronic Financial Services

The Financial Services Commission proposed a revision to the supervisory regulation on electronic financial services on February 1. The revision is intended to shift the current regulatory framework from rule-based to principle-based one, allowing more room to make autonomous decisions for financial companies, and bolster the resilience of electronic financial system to disasters and cyberthreats. It has been pointed out that the current framework of the supervisory regulation on electronic financial services, which remained little changed since it was established in 2006, makes it difficult to flexibly respond to evolving security threats and encourage passive responses from financial companies. In particular, there has been a growing need for making financial industrys cybersecurity system more adaptable and resilient in response to technology advances (e.g. artificial intelligence or cloud computing) and evolving cyberthreats. Against this backdrop, the revision proposal is focused on allowing more room for financial companies to make decisions on their own on financial security matters and encouraging them to make more investment in cyber security by making financial security regulations more goal-and-principle oriented. First, the revision proposal reduces the number of rules to 166 from 293 previously to ensure that financial businesses can flexibly respond to new risks. Instead of prescriptive and exhaustive rules, the revised regulations will only present principles and goals and allow financial companies to make decisions on details on their own. For example, the revision proposal abolishes provisions specifying the method of creating users passwords and allows financial companies to adopt their own method of creating passwords and managing authentication system. Second, to bolster cyber resilience against disasters and electronic incidents, the revision proposal introduces requirements for certain types of small- and medium-sized financial companies and el
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Feb 01, 2024

FSC Seeks to Bolster Cyber and Information Security Capacity and Resilience of Financial Industry

The Financial Services Commission held a meeting with relevant authorities and financial companies on February 1 and announced plans to bolster cyber and information security capacity and resilience of the financial industry. At the meeting, authorities also unveiled and discussed key details of the revision proposal for the supervisory regulation on electronic financial services, which is put up for public comment until March 12. Vice Chairman Kim Soyoung of the FSC delivered opening remarks at the meeting, emphasizing on the need to establish a forward-looking cyber and information security system in the financial industry amid rapid changes taking place in digital sphere, such as cloud computing and artificial intelligence, and the evolving nature of cybersecurity threats. In this regard, Vice Chairman Kim said that it is necessary to focus on making financial industrys cybersecurity system more adaptable and resilient. To this end, the FSC will make the cyber and information security system more goal- and principle-oriented and encourage financial companies to boost their own cybersecurity capacity and bolster resilience to cyberthreats. With the revision of the supervisory regulation being proposed today, Vice Chairman Kim said that the approach to cyber and information security will shift from a narrow and compliance-focused practice of the past to a more comprehensive, proactive and self-driven one. Beginning with this rules change, the FSC will seek to revise the Electronic Financial Transactions Act in the future to strengthen financial companies self-governance responsibility over cyber and information security. Some of the key details of the revision proposal for the supervisory regulation on electronic financial service include (a) making rules simpler and allowing more room to make autonomous decisions for financial companies by reducing the number of rules to 166 from 293 previously, (b) requiring certain types of small- and medium-sized financial comp
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Feb 01, 2024

Personal Debt Workout Program to Incorporate Missed Payments on Mobile Phone Bills

The Financial Services Commission announced a plan to provide an integrated financial-telecom debt adjustment service to debtors through close cooperation with the Ministry of Science and ICT and Credit Counseling and Recovery Service. Once the service becomes available, the personal debt adjustment program run by CCRS will offer a one-stop debt workout service to debtors for their financial debts as well as missed payments on their mobile phone bills. The method and extent of debt adjustment for both financial debts and missed payments on mobile phone bills will depend on each debtors income situation. Currently, CCRS is coordinating with telecommunications businesses to reach a final agreement, which is expected to be concluded in the first quarter. Once the agreement is in place, authorities will work on rules change and system upgrade to start providing the integrated financial-telecom debt adjustment service in the second quarter of this year. * Please refer to the attached file for details.
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