Financial stability is a prerequisite to innovation and inclusive finance policies. FSC maintains close market monitoring for any signs of market volatility and works to ensure stability in the financial markets. There are risk factors originating from abroad and from within. FSC focuses on making our economy more resilient from external shocks, such as a disruption in the global supply chain, and supporting Korea’s material, component and equipment industries to help boost their global competitiveness. Internally, FSC is closely monitoring the trends in household debt and seeking reforms to corporate restructuring in order to prevent domestic risk factors from turning into systemic risks. Policies aimed at increasing financial stability also include enhancing fairness in the financial markets by introducing a comprehensive legal framework for the supervision of financial conglomerates, improving market discipline and promoting transparency in corporate disclosure and accounting practices.
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Feb 03, 2021
- FSC Announces Decision on Short-selling Ban
- FSC Chairman Eun Sung-soo held a press briefing on February 3 and announced the decision to extend the short-selling ban until May 2, 2021 and to allow a partial resumption of short-selling from May 3 on KOSPI 200 and KOSDAQ 150 stocks. Summary of Chairmans Remarks (FSCs Decision) The FSC has decided to extend the current short-selling ban until May 2 this year and allow a partial resumption from May 3 on KOSPI 200 and KOSDAQ 150 stocks. The partial resumption is intended to minimize the impact on markets, given these stocks have large market caps and liquidity so that the resumption of short-selling would have limited impact on stock prices. Meanwhile, the short-selling ban will remain on the rest of stocks (2,037 stock items) with further decisions on the resumption of short-selling on these stocks to be made later based on market conditions. The resumption date of May 3 has been decided to give the Korea Exchange (KRX) some time for system development and testing. With the revised Financial Investment Services and Capital Markets Act scheduled to go into effect on April 6 this year, with stronger penalty rules for illegal short-selling activities, there will be no issue of a legislative gap. Today, the FSC commissioners raised the same voice on the need to improve the short-selling system as there are investor demands for more transparency and fairness in the short-selling system. (Improving the Short-selling System) Prior to the May 3 partial resumption, the FSC will work on measures to improve the short-selling rules. First, The FSC will work to ensure the detection of and punishment on illegal short-selling activities. With the revised Financial Investment Services and Capital Markets Act, short-sellers will be required to keep their securities lending data for five years and the securities firms will be required to tighten monitoring of illegal short-selling activities. The securities firms are currently in the process of getting their systems ready according
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Feb 02, 2021
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Feb 01, 2021
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Jan 28, 2021
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Jan 26, 2021
- Financial Authorities to Work on Risk Management and Support Transition to First-mover Economy
- Vice Chairman Doh Kyu-sang held the 33rd financial risk assessment meeting via teleconference on January 26 to discuss key risk factors in 2021 and review the implementation of the COVID-19 lending support for SMEs and small merchants. The following is a summary of Vice Chairman Dohs remarks. (Risk Management) With the pandemic response measures put in place, the public and private sector debt increased throughout the world and asset prices have seen a rapid acceleration with abundant market liquidities. The accumulation of excessive debt may pose a risk to the economic recovery, and the financial authorities will continue to work on the management of the household and corporate debt. The FSC plans to introduce measures to more effectively manage household debt in the first quarter, which will focus on the application of DSR rules to individual borrowers. On corporate debt, the authorities will set up a monitoring system to check the status of corporate financing across different industries. Stock prices have gone up due to strong trading activities by retail investors. However, there are possibilities of a rising market volatility and the authorities will closely monitor the conditions in the stock markets. In addition, the authorities will work to strengthen the oversight of illegal and unfair trading activities including illegal short selling, while preparing tax incentives for longer-term stock investment. The FSC will also soon introduce measures to improve the competitiveness of the publicly offered funds to make the process more investor-oriented. (Channeling Funds to Productive Sectors) The authorities will work to ensure that the abundant market liquidities are flowing into productive sectors and toward the vulnerable groups in need. In this regard, the FSC will work on a seamless implementation of its policy on New Deal fund, which will be raised up to KRW4 trillion in 2021 with its first investment project hoped to be announced in March. In April, another
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Jan 25, 2021
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Jan 14, 2021
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Jan 13, 2021
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Jan 12, 2021
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Jan 12, 2021
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Dec 29, 2020
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Dec 24, 2020
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Dec 21, 2020
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Dec 17, 2020
- KoFIU Begins Operating Upgraded AML System
- The FSC announced that the Korea Financial Intelligence Unit (KoFIU) will begin to operate an upgraded anti-money laundering system from December 17, which will improve efficiency in its suspicious transaction report system, strengthen assessment and analysis capabilities and enhance information security.BACKGROUNDThe KoFIU analyzes suspicious transaction reports (STR) and currency transaction reports (CTRs) of financial companies and provide results to law enforcement agencies for detection and prevention of money laundering activities. It is a central AML infrastructure connecting about 6,000 reporting entities, eight law enforcement agencies and some twenty related administrative agencies. Since the system began to operate in 2002, the rising volume of reports it handles has placed increasing burdens on the system. To address this problem, the KoFIU started upgrading the system in May 2019, and after system development and a test run, the upgraded AML system began its operation on December 17, 2020.IMPROVEMENTS EXPECTATIONS(INCREASED EFFICIENCY IN STR SYSTEM) The upgraded AML system enables financial institutions to file STRs about three times more than that of the previous capacity. The KoFIU’s processing capacity has also increased about five times, guaranteeing a swift and secure transfer and processing of the rising volume of STRs.(STRENGTHENED ASSESSMENT ANALYSIS CAPABILITIES) The upgraded AML system utilizes machine learning technology in assessing and analyzing money laundering activities. By directly connecting KoFIU with other administrative agencies, it also greatly reduces the time it takes to gather necessary data from relevant institutions.(ENHANCED INFORMATION SECURITY) The upgraded AML system has been set up at the National Information Resources Service to ensure high levels of security and stable management.FURTHER PLANSThe authorities will work to ensure system stability and continue to effectively respond to money laundering schemes that are b
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Dec 14, 2020
- FSC Chairman Speaks about the Need to Strengthen Anti-Money Laundering Measures
- FSC Chairman Eun Sung-soo presented commendations to those who contributed to the prevention of money laundering at an event held on December 14 and spoke about the need to strengthen AML capabilities.The following is a summary of Chairman Eun’s remarks.The Financial Action Task Force’s 2020 mutual evaluation report on Korea placed Korea’s AML regime on a par with that of some of the advanced economies. It is the result of close cooperation between the financial institutions, law enforcement agencies and financial authorities.Amid growing threats about the diversification and advancement of money laundering techniques, especially through digital finance, it is necessary to draw up plans to strengthen AML capabilities focusing on the following measures.First, the Korea Financial Intelligence Unit (KoFIU)’s investigation and analysis capabilities should be strengthened and its communication with law enforcement agencies expanded.Second, the AML supervision and inspection capabilities should be bolstered. With technological advancements and newly emerging industries, more and more business entities will be subject to AML compliance.Third, more professional personnel should be hired at the KoFIU for a more systematic human resources management and to improve the level of expertise. The need to increase international cooperation on AML, rising cases of suspicious transaction reports and growing numbers of entities being subject to AML compliance all require an improvement to the organizational capacity.In order to ensure an effective functioning of the AML regime, close cooperation is essential among all relevant institutions, including the financial institutions, KoFIU and law enforcement agencies.* Please refer to the attached PDF for details.
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Dec 09, 2020
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Dec 09, 2020
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Nov 30, 2020
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Nov 26, 2020
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Nov 16, 2020
