Press Releases

All
Policy Agenda
Innovation
Stability
Inclusion
Others

FSC works to ensure that finance plays a key role in developing innovative businesses and supporting the real economy, thereby fueling Korea’s more vibrant economic growth. Promoting advanced financial industry, stable financial markets, fair market order and reliable consumer protection are among FSC’s key policy agenda. Digital transformation and big data are increasingly playing larger roles in various aspects of financial services. In the era of 4th industrial revolution and digital economy, finance will help boost growth potential and create jobs as the government seeks to advance its Digital New Deal policy.

Period: start
~
end

1month 3month Reset

Requirement

Feb 06, 2023

FSC Unveils Measures to Overhaul Regulations to Permit Issuance and Circulation of Security Tokens

The FSC introduced a set of policy tasks to overhaul regulatory system on the issuance and circulation of security tokens in order to allow security token offerings (STOs) within the regulatory scope of the Financial Investment Services and Capital Markets Act (FSCMA).The key policy tasks include (i) providing principles for determining whether a digital asset qualifies as a security as well as examples for applying these principles in order to prevent potential violation of laws and protect investors, and (ii) establishing a regulatory foundation to ensure that security tokens are appropriately issued and circulated by improving regulatory system in the following three areas and making the governments policy direction publicly known in advance. a) Accept security tokens as a new form of securities issued under the Act on Electronic Registration of Stocks and Bonds. b) Create issuer account managers that will directly register and manage security tokens. c) Introduce over-the-counter (OTC) trading brokers for investment contract securities and beneficiary certificates. These measures permit the issuance and circulation of security tokens with the investor protection mechanism that is supported by the framework of capital market regulations. Authorities expect that these measures will (a) facilitate the issuance and circulation of a variety of rights, such as fractional shares, in the form of a security, (b) facilitate the formation of small-scale OTC markets where atypical types of securities can be circulated, and (c) ensure the application of current rules and regulations on securities, which are designed to protect investors, equally. Security Token: Regulatory System and Concept A security token (or tokenized security) is a digitalized form of the security that is legally defined in the FSCMA and is based on the distributed ledger technology. Among various types of digital assets, security tokens arecontrary to the non-security-type digital assets (a.k.a. virtua
Attachment 1
Jan 31, 2023

Authorities Plan to Improve Rules Regarding Dividend in Line with Global Standards

The FSC and the Ministry of Justice announced measures to improve rules regarding dividend to make companies procedures for distributing dividends more consistent with international standards. First, by issuing an authoritative interpretation on the Commercial Act and revising the Financial Investment Services and Capital Markets Act (FSCMA), authorities will make improvements to the current procedure for distributing dividends to enable investors to invest after checking dividend amounts to receive. Second, authorities will pursue diverse measures to induce voluntary and active adoption of the improved dividend distribution procedure from companies by revising and notifying the model articles of incorporation for listed companies, requiring companies to disclose whether they have adopted the improved dividend distribution procedure on their corporate governance reports, etc. Authorities expect that these measures will help to alleviate factors contributing to the so-called Korea discount, promote dividend investing and bolster companies dividend payout ratios, and create an environment where more investors are encouraged to turn to long-term dividend investing for regular dividend income which will help to ease volatility in stock markets. Background Most companies in Korea designate shareholders who will receive dividends at the end of each year prior to determining dividend amounts at general shareholders meetings held in the following spring. As a result, investors invest in companies without knowing how much they will receive in dividends, and they have no choice but to accept the decision on dividends that will be made a few months later. These rules and practices, which discourage dividend investing of earning regular dividend income, remain inconsistent with global standardsand have been pointed out as a factor contributing to the so-called Korea discount, an undervaluation of the Korean stock market by foreign observers. Therefore, dividend investing in Kor
Attachment 1
Jan 30, 2023

FSC Unveils Work Plan for 2023

The FSC presented its annual work plan for 2023 on January 30. This years work plan includes twelve specific policy items under the initiatives of (a) ensuring strong financial market stability, (b) strengthening the role of finance to shore up the growth of the real economy and peoples livelihoods and (c) promoting the advancement of the financial industry into a high value-added strategic sector. Key Details of 2023 Work Plan Ensuring Financial Market Stability I. Authoritieswill preemptively respond to financial market risk factors Financial markets in Korea are, despite continuing uncertainties at home and abroad, on a stable recovery path backed by the KRW50 trillion-plus market stabilization measures and strong policy cooperation amog relevant authorities. In this regard, authorities will continue to work on the following: a) Ensure market stabilization utilizing over KRW40 trillion of the remaining capacity of the market stabilization programs. - Flexibly adjust the eligibility and size of the support in accordance with market situations. Authorities will widen the pool of eligible recipients and increase the maximum valueof bonds supported by the P-CBO (primary collateralized bond obligation) program (KRW5 trillion) in order to relieve businesses even with unfavorable credit ratings from difficulties in corporate bond issuance. b) Seek flexible and creative policy solutions, in responding to current crisis situation, that are not bound by the past crisis-handling experience and appropriate for current market situations. - Mobilize all available resources and capabilities in financial sectors to respond to the crisis by maintaining close cooperation with financial institutions, as well as relevant ministries. II. Authorities will thoroughly manage risks linked to real estate market a) Spare no effort to ensure a soft-landing of the real estate market as a countermeasure against a potential weakening of the real estate project finance (PF) which is considered
Attachment 1
Jan 25, 2023

FSC Announces Measures to Improve Foreign Investors' Access to Korean Capital Markets

The FSC announced on January 25 a set of measures intended to improve foreign investors access to Korean capital markets by seeking bold improvements of the regulations that have been impediments to global investors investments in Korean markets. The measures include (a) abolishing the foreign investor registration requirement, (b) facilitating the use of omnibus account for foreign investors, (c) enabling more convenient OTC transactions by foreign investors and (d) expanding English disclosures in phases. Authorities expect that these measures will enhance the investment environment for foreigners on a par with international standards, which will provide important grounds to boost foreign investment in Korean markets. Background The foreign investor registration system and the constraints on foreign investors OTC (over-the-counter) transactions were introduced in 1992 when authorities began to allow foreign investors to invest in locally-listed stocks. While permitting foreigners to invest in locally-listed stocks, authorities established the total foreign investment cap and individual foreign investor cap of 10 percent and 3 percent, respectively, for each investment item, and began to require prior registration for foreign investors as well as to restrict their OTC transactions to monitor their observance. With the abolishment of foreign investors stock holding limit for ordinary companies in 1998, there currently exist foreign investors stock holding limits placed on only 33 items in key industries among 2,500 listed companies. However, the foreign investor registration system has continued to exist for the past three decades without a significant change. In addition, authorities introduced omnibus account for foreign investors in 2017 to provide a convenient way to invest in Korean markets, but it has not been utilized ever since its inception. The availability of English disclosures, which serve as essential information for foreign investors decisions on inve
Attachment 1
Jan 19, 2023

Financial Regulatory Innovation Committee Discusses Measures to Improve Capital Market Regulations

The financial regulatory innovation committee (FRIC) held its 6th meeting on January 19 and discussed measures to improve regulations in capital markets. The measures include (a) improving foreign investors access to capital markets through abolishment of the foreign investors registration system and phased expansion of English disclosure requirement to boost the global dynamism in domestic capital markets and (b) establishing a regulatory framework on the issuance and distribution of security tokens to permit security token offerings (STOs) and to promote development of a safe secondary market. Prior to todays meeting, authorities held a private sector advisory working group meeting on January 10 and listened to opinions related to these agendas. Summary of Remarks by FSC Chairman Kim Joo-hyun Last year, efforts to improve capital market regulations focused on system improvement to enhance the rights and interests of general shareholders, whereas this year, authorities will focus on making Koreas capital market regulations more consistent with those found in advanced markets overseas and facilitating capital markets to lead innovation in the real economy sector amid a rapidly changing environment. In this regard, the purpose of agenda items being deliberated today is (a) to break away from familiar but outdated regulatory framework that is no longer suitable for far more globalized capital markets that we currently have, and (b) to embrace newly emerging technologies into our capital markets and utilize them as an impetus for innovation. The first item, the measures to improve foreign investors access to domestic capital markets, intends to (a) abolish the foreign investor registration system introduced in 1992 and instead allow foreign investors to more freely invest in our capital markets after identification with personal passport numbers and corporate legal entity identifiers (LEIs), (b) increase the availability of OTC transactions for foreign investors and (c
Attachment 1
Nov 28, 2022

Authorities Hold Policy Seminar on Making Improvements to Capital Market Regulations

The FSC, the Korea Exchange (KRX) and the Korea Capital Market Institute (KCMI) jointly held a policy seminar for alleviation of the Korea discount on November 28. The theme was improving the consistency of Korea and global capital markets rules and regulations. In his opening remarks, FSC Vice Chairman Kim So-young outlined the governments policy direction for regulatory improvements in Korean capital markets. The policy draft has been prepared by the FSC through a taskforce with private sector experts. Summary of Vice Chairmans Remarks In our capital markets, there are outdated regulations and unreasonable practices that have been first introduced decades ago and kept for too long without being scrutinized for their validity, some of which are nonexistent in the economies with advanced financial markets. These regulations and practices made sense and were considered necessary at the time of their introduction. However, in order to establish a system suitable for the current status of Korean capital markets and to satisfy the needs of a new era, our capital markets should bravely break the familiar but outdated framework and undertake reforms. (Registration for Foreign Investors) Foreign investor registration has long been regarded as one of major outdated regulations that deviate from global norms. This regulation requires foreign investors registration before trading listed securities in the Korean capital markets. Under the registration scheme, foreign investors are issued investment registration certificates, and all of their transaction data are recorded. This rule has been in force for more than 30 years since Korean capital markets were opened to foreign investors in 1992. Suppose that we acquire or dispose of listed stocks in a foreign country. If we had to register with the countrys financial authority in advance and if each individuals transaction records are piled up in real-time, it will induce not only procedural but also psychological burden. In advan
Attachment 1
Nov 16, 2022

Authorities Discuss Regulatory Reforms to Promote Convergence of Financial and Non-financial Sectors

The financial regulatory innovation committee held its 4th meeting on November 14 and discussed ways to improve the regulations on the separation of industrial and financial capital. The committee also discussed plans to improve the regulation on entrustment of services of financial institutions. Key Agenda Details a) Regulatory reform on separation of industrial and financial capital Regarding separation of industrial and financial capital, authorities will expand and improve the scope of permissible ancillary services and that of their permissible investment in other companies in order to promote convergence between financial and non-financial sectors as well as help improve synergetic effects between them. The principle on separation of industrial and financial capital forms an integral part of our financial system in maintaining financial stability, preventing conflicts of interests and restricting concentration of economic power. However, rapid digitalization and the Big Blurphenomenon recently require changes in the regulations on separation of industrial and financial capital. While keeping the basic framework of these regulations intact to ensure financial stability, it is essential to more reasonably regulate financial institutions ancillary services and investment in other companies in order to assist financial institutions in efficiently adapting to a changing environment, such as digital transformation and the Big Blur, and making advances. Therefore, authorities will consider various ways to decide how to recraft the regulatory scope of non-financial services that financial institutions can do, from making improvements to the current positive list approach to making a transition to a negative list approach and regulating the total amount of risks. b) Regulatory reform on entrustment of financial institutions services Authorities will encourage subcontracting and outsourcing of financial institutions by enhancing the regulatory framework for entrusting f
Attachment 1
Sep 05, 2022

Measures to Improve Protections for General Shareholders in IPO of Split off Subsidiary

The FSC introduced a plan to improve the rights and interests of general shareholders in IPOs of split off subsidiaries in order to help restore fairness and trust in the capital markets and strengthen investor protections. Background With some companies recently deciding to split off rapidly growing portions of their business and went ahead with IPO of split off subsidiaries within a short period of time, the issue of general shareholders incurring losses has become problematic as their shareholder rights are stripped away and stock prices for the parent company tend to decline. Unlike in a spin off, shareholders of the parent company in a split off are not allocated with stocks of a split off subsidiary and therefore they have no shareholder rights over the split off company. There is also a study suggesting that the valuation of the high growth split off business section is not necessarily reflected in the valuation of parent company stocks. Especially, the fact that the rights of general investors who have been opposed to the split off decision are not adequately protected has presented an ongoing problem which has also been closely related to the so-called Korea discount phenomenon. As an equity interest, a stocks worth largely consists of a right to participate in the decision making process and a right to make a claim on present and future profits. However, in a capital market where these two principles are not properly observed, it will be difficult for investors to have high levels of confidence. Therefore, as one of the key policy tasks of the new administration for restoring fairness and trust in capital markets, the financial authorities have prepared the following measures to improve the rights and interests of general shareholders in IPO of split off subsidiaries after months of engaging in discussions with experts and relevant stakeholders. Key Details I. Strengthen Disclosure Companies planning to carry out a split off of their business should disclo
Attachment 1
Aug 08, 2022

FSC Unveils Financial Policy Agenda of the New Administration

FSC Chairman Kim Joo-hyun presented the new administrations financial policy agenda to President Yoon Suk Yeol on August 8 which focuses on preemptive handling and management of crisis and providing steady reinforcement for the revitalization of the financial industry and economy beyond crisis. Financial Policy Agenda I. Financial Measures to Stabilize Peoples Livelihoods in Vulnerable Sectors a) Background - Pursue prompt implementation of the KRW125 trillion-plus financial measures to help stabilize peoples livelihoods - Seek additional measures in preparation for SMEs facing difficulties b) Key tasks [Task #1] Effective implementation of the financial sector measures to help stabilize peoples livelihoods Authorities will strengthen efforts for promotion and consultation activities and establish a close-knit coordination network with relevant government ministries and institutions. - Strengthen promotion and consultation efforts customized for each beneficiary group to help ensure that there is no one left out from receiving assistance due to the lack of awareness about the availability of the support programs - Improve synergetic effects (consultation funding support offered) through collaboration with the small merchant support program provided by the Ministry of SMEs and Startups - Maintain close communication with the financial sectors and media. [Task #2] Response to potential management and financing difficulties of Small and Medium-sized Enterprises Authorities will prepare financial support measures to help resolve the difficulties of SMEs such as increases in inflation, interest rates and prices of raw materials. 1) Make newly available (KRW6 trillion) government-backed fixed rate loans with low interest rates 2) Provide preferential interest rate support for loans and guarantees to businesses that are highly dependent on raw material imports or those experiencing difficulties due to disruption in global supply chain 3) Make adjustment to the accounting r
Attachment 1
Jun 17, 2022

Household Debt Management Plan and Step-by-Step Normalization of Deregulatory Measures

The FSC prepared plans for the normalization of regulation on household debt which contain the new administrations household debt management strategies and a step-by-step normalization in lending regulations in support of housing ladder, as part of the new administrations economic policy agenda announced on June 16. New Administrations Household Debt Management Plan I. Stable Management of Household Debt Growth The government will work to stably manage the growth of household debt so that a considerable expansion in household debt in the process of dealing with the COVID-19 pandemic does not impose burdens on the countrys economy and financial system. - Prevent excessive expansion of household debt relative to income levels by promoting the practice of borrowing based on ones repayment capability (the debt service ratio rule) and making debt payments in installment. II. Step-by-step Normalization of Regulation on Housing Loans The government will work to normalize the regulation on loan-to-value (LTV) ratio in a step-by-step manner in order to help ease difficulties faced by non-speculative homebuyers in the process of tightening control over household debt. - Ease first-time homebuyers maximum LTV ratio to 80 percent. - Normalization of rules on LTV ratios for homeowners (single property and multiple property owners) will be pursued after considering the implementation of the DSR rules and the household debt and real estate market situations. While pursuing a gradual normalization in LTV ratios, the government will seek supplemental measures to help prevent DSR rules from restricting lending. - Expand the level of future income that can be recognized in DSR calculation for young adults (51.6 percent for 20s and 17.7 percent for 30s). - Improve lending regulation for living expenses in line with the implementation of the 3rd stage of individual borrower-level DSR regulation. III. Protection of Vulnerable Borrowers amid Increasing Interest Rates The government will w
Attachment 1
May 31, 2022

Supplementary Budget Approval at National Assembly to Expand Availability of Financial Support

The National Assembly passed the supplementary budget on May 29, 2022 which includes KRW1.7 trillion worth of financial support programs intended to help the self-employed business owners and small merchants experiencing difficulties due to COVID-19 and the vulnerable groups such as young adults and lower income groups. The financial support programs to help improve peoples living conditions consist of six main tasks worth about KRW1.7 trillion in total in the supplementary budget. - (a) KRW600 billion (plus KRW500 billion in in-kind contribution) in debt adjustment, (b) KRW680 billion in low interest rate transfer loans and (c) KRW220 billion in targeted support funds to help with the recovery of the self-employed business owners and small merchants and improve their competitiveness - (d) KRW15 billion in expanded supply of loans for young adults with low incomes and (e) KRW48 billion in special guarantees for those with lowest credit scores to help improve the access to financial services for vulnerable groups such as lower income households and young adults - (f) KRW109 billion in government-sponsored transfer loans to help ease the high interest payment burdens of non-speculative homeowners and improve the overall structure of household loans Key Details of Financial Support Programs to Help Peoples Livelihood I. Debt Adjustment Program for Small Merchants and the Self-employed a) Program Overview (Program Purpose) To support normal business operation and restart efforts of small merchants and self-employed business owners who have been experiencing difficulties in making loan payments due to losses accrued from the COVID-19. - Provide preemptive support to prevent deterioration in business foundation via sale of overdue debts or collaterals in the case that the level of business recovery is not sufficient for loan payment burdens. - Assist restart efforts of borrowers who have turned insolvent due to difficulties in making payments for abruptly increased debt.
Attachment 1
Jan 25, 2022

Financial Development Review Committee Holds Meeting on 2022 Market Conditions and Policy Tasks

The FSC announced that the Financial Development Review Committee held a general meeting on January 25 to discuss recent market conditions and key policy measures for this year. The 2022 FDRC is made up of 49 financial market experts of which 21 of them are newly appointed. The FSC will regularly seek policy advice from the FDRC as the authorities draw up and implement financial policies for 2022. The following is a summary of Chairman Kohs keynote address. Chairmans Remarks (2021 Financial Policy) 2021 was the year that required acute balancing acts in many respects. First, the household debt management plan introduced in October 2021 focused on enhancing control over the total household debt amount. It has helped to bring down the speed of the debt growth to a steady level. Meanwhile, the COVID-19 financial support programs through the KRW175 trillion-plus support packages, loan maturity extensions and payment deferrals for small businesses have provided reliefs to the lower income and vulnerable groups. Amid a rapid transition to digitalization in the financial industry, the FSC has promoted innovation and competition in the financial industry while ensuring stability in the markets and guaranteeing consumer protections. (2022 Economic and Financial Market Condition) The financial industry is facing uncertainty and volatility from the onset of 2022. While the economy is on a recovery track, there are threats to the economy such as the spread of the omicron variant and Chinas growth slowdown. Deepening financial imbalances around the world have exposed potential risk factors. The earlier-than-expected global tapering moves will lead to the end of the easy liquidity environment. The financial landscape is rapidly changing as more convergence and collaboration take place with big tech and fintech companies. As such, there will be growing demand for more public trust and fairness in the financial system. (2022 Financial Policy Tasks) The FSCs policy initiatives for 2
Attachment 1
Dec 22, 2021

FSC Unveils Work Plan for 2022

The FSC announced its work plan for 2022 which will be focused on maintaining stability in the financial system, promoting advancement of the financial industry, supporting an overall growth of the economy and boosting financial inclusion. In order to achieve these goals, the FSC plans to (a) preemptively manage financial imbalances and work on an orderly exit and normalization from the pandemic-era policy, (b) seek innovation in the regulatory framework to promote digital transformation in the financial industry, (c) provide support for structural changes taking place in the economy and (d) ensure tailored support for vulnerable groups and enhance consumer protections. Key Achievements in 2017-2021 I. Stability in the Financial System The FSC has worked to maintain stability in the financial system by pursuing a consistent policy on household debt management and preemptively responding to the COVID-19 pandemic. In terms of household debt management, the pace of the household debt growth that has seen acceleration in 2020 has come down to a stable level in the second half of 2021 with improvements also seen in the quality of debt structure. The FSC has established groundwork for stably managing potential debt-related risks in the future. In response to the COVID-19 pandemic, the FSC has made available financial supports through the KRW175 trillion-plus support programs intended to help SMEs and small merchants as well as suppliers in the key industry sectors. II. Broadened Horizon of the Financial Industry The FSC has helped expand the horizon of the financial industry by promoting competition as well as convergence between different sectors. Through regulatory improvements, the FSC has lowered entry barriers for different types of financial companies and fintech firms and promoted innovation and digital transformation in the financial industry by introducing open banking and MyData services as well as an integrated public-sector financial open data platform. III. P
Attachment 1
Dec 20, 2021

Financial Development Review Committee Holds Meeting to Discuss 2022 Policy Agenda

The Financial Development Review Committee held a meeting on December 17 to discuss key policy initiatives for 2022 and review current trends and risks in the financial markets. In a keynote address, FSC Chairman Koh Seungbeom said that the governments financial policy for 2022 will be centered on ensuring stability in the financial system, promoting financial development, supporting an overall economic growth and expanding financial inclusion. The following is a summary of Chairman Kohs remarks. Chairmans Remarks Despite overall expectations for a sustained recovery momentum into the next year, there still exist uncertainties regarding domestic economic and financial market conditions. With the global tapering move, market instability may grow. As such, the FSC plans to preemptively tackle financial imbalances to maintain stability in the financial system. To this end, the FSC will work on a steady implementation of the household debt management measures and an orderly exit and normalization from the pandemic-era policy measures while closely examining and managing the vulnerable and the so-called shadow banking sector. In terms of promoting financial development, the FSC will maintain a well-balanced approach between promoting innovation and competition between traditional financial institutions and new players such as big tech and fintech companies and working on consumer protection. In the midst of important structural changes taking place in the economy and industries to achieve carbon net zero goals and make digital transformations, the financial sector should provide active support for businesses attempting to reorganize, searching for new growth areas and making transitions to lower carbon growth models. As the current economic condition demands an ever stronger measure for financial inclusion, the FSC will work to ensure a steady access to financial support for vulnerable groups including credit recovery while seeking improvements to consumer safeguards. Du
Attachment 1
Dec 20, 2021

ESG Information Platform Opens

The FSC and the Korea Exchange launched an integrated environmental, social and governance (ESG) information platform on December 20, providing a convenient one-stop information service on ESG-related information of listed companies for investors and the general public. The ESG information platform provides (a) background information on the significance of ESG management, key regulatory trends and related issues, (b) information about the listed companies ESG activities, ratings and their sustainability reports, (c) statistical information on ESG investment trends and (d) other educational materials. As the ESG information platform offers a convenient one-stop information service for a variety of ESG-related data originating from different sources, companies and institutions, users will be able to access and utilize data tailored to their individual needs. The authorities expect that the ESG information platform will function as an important information hub for ESG-related data and help raise overall awareness on the importance of the ESG movement. The FSC and the KRX will continue to work on making improvements to the platform to help enhance user convenience and expand the types of ESG data made available through the platform. * Please refer to the attached PDF for details.
Attachment 1
Dec 06, 2021

FSC Chairman Discusses Key Policy Tasks for 2022 in Virtual Press Briefing

FSC Chairman Koh Seungbeom held an end-of-year press briefing in a virtual format on December 3 to discuss policy outcomes for this year and explain key policy tasks for 2022. At the beginning of his keynote address, Chairman Koh touched upon some of the important policy initiatives and their outcomes for 2021, including policies on household debt management, COVID-19 financial support for small merchants and SMEs, virtual asset service providers, digital transformation in the financial sector and financial consumer protection. Chairman Koh then discussed key policy tasks for 2022 as summarized below. Chairmans Remarks on 2022 Policy Focus The global economy is expected to maintain its recovery momentum in 2022 but market uncertainties are growing due to asset price volatility, rising prices and persistent concerns about inflation. Domestic situations are also concerning. Financial imbalances and potential risks need to be managed while the provision of pandemic-related supports should be maintained. Excessive debt levels should be reduced while assistance for the lower income and vulnerable groups should continue to be available. Ensuring stability in the financial system and pursuing inclusive financial policies may be contradictory in nature but seeking a proper balance between the two is the task of the financial authority. In this regard, the FSC will focus on the following three policy areas. First, the authorities will continue to work on tackling financial imbalances. Unlike some of the other major economies where debt levels have increased much more in the public sector, Korea has seen debt levels grow much faster in the household and corporate sectors. The household debt management plan for 2022 will be focused on managing the total amount of debt extended with a longer term plan for gradually introducing a more systematic management plan. With the application of the individual borrower-level debt service ratios (DSRs), stable management of household debt
Attachment 1
Sep 09, 2021

Additional New Deal Fund Worth KRW100 Billion Planned for This Year

The FSC announced the governments plan to create an additional New Deal fund in the amount of KRW100 billion this year. The additional New Deal fund will be financed through KRW80 billion investments from the private sector including investments from institutional and retail investors while the remaining KRW20 billion will be financed through fiscal spending. The fiscal investment portion of the fund will be injected with a subordinate position to help absorb losses first and alleviate risks for private sector investors. The newly created New Deal fund will make investments in listed companies or prospective listed companies in K-New Deal sectors. Profits generated from investments will be shared with the retail investors who made investments in the fund. The Korea Development Bank and the Korea Growth Investment Corporation will announce the opening of applications for fund management companies on September 10. They will select eight fund management companies by the end of October and the sales process will open for two weeks for retail investors at the end of November or early December. The authorities plan to keep the public regularly informed about fund management strategies and closely monitor the status and progress of investments. * Please refer to the attached PDF for details.
Attachment 1
May 24, 2021

FSC Holds Policy Workshop to Discuss Progress of Policy Implementation and Tasks Ahead

The FSC held a policy workshop on the progress of financial policy implementation of the Moon Jae-in administration at its fifth year on May 20, discussing some of the key policy achievements made in the past four years as well as the remaining tasks. The policy workshop was attended by all FSC employees and key members of the financial development review committee. Policy Achievements I. Preemptive crisis response helped to ease uncertainties and ensure stability a) Prompt implementation of COVID-19 response measures helped to prevent a spread of financial crisis. - The KRW175 trillion-plus COVID-19 financial support programs introduced, which include (i) stronger lending support for SMEs and small merchants hit by COVID-19, (ii) emergency liquidity support for businesses facing temporary liquidity shortages and (iii) the bond market and stock market stabilization funds. b) The growth of household debt has been stably managed. - Mortgage rules tightened to curb speculative demand in the housing market (Aug. 2, 2017) - Stronger mortgage rules applied on multiple homeowners to cool down speculative demand (Sep. 14, 2018) - Prohibition of mortgage loans introduced on homes valued over KRW1.5 billion in speculative areas (Dec. 16, 2019) - Gradual application of DSR rules introduced on individual borrowers (Apr. 29, 2021) c) Continuous efforts have been made on corporate restructuring - Corporate restructuring fund created in the amount of about KRW3.2 trillion between August 2018 and April 2021, which made investments of about KRW1.8 trillion so far - Pursued restructuring of maritime shipping and airline industries II. Encouraged a shift in flow of funds towards productive sectors through financial innovation and supply of venture capital a) Expanded the supply of funds to innovative sectors by making improvements to the corporate credit evaluation system and the capital market rules - Corporate credit rating system changed to take into account the future growth poten
Attachment 1
Mar 02, 2021

Plans to Boost Consumer Confidence and Promote Innovation in the Insurance Industry

The FSC announced a policy framework on insurance businesses on March 2, which aims to improve consumer confidence and promote innovation in the insurance industry. It details twelve key initiatives in four specific areas(a) working on improvements to the industry-wide structure of insurance business and boosting consumer confidence (b) enhancing the role of insurance as a social safety net, (c) promoting digital innovation and (d) making improvements to business management practices. This policy framework has been prepared based on expert opinions gathered from numerous committee and taskforce meetings, competitive assessments, suggestions from thinktanks and communication with market participants. As this framework sets forth a mid- to long-term direction of the insurance industry, specific implementation plans will be determined later. Key Measures I. Improving Industry-wide Structure and Boosting Consumer Confidence (a) Facilitating new players to enter the insurance market to promote competition and innovation - Allow market entrance of new types of insurance businesses specializing in small-sum and short-term insurance policies and those providing insurance services through online and digital channels - Introduce a more flexible licensing scheme for insurance businesses through which insurance companies are permitted to hold multiple subsidiaries specializing in same insurance categories (b) Revising rules to expand the availability of digital sales channels - Promote the use of digital, AI-based and contactless insurance sales channels - Expand innovative services by establishing standards on online platform services (c) Bolstering consumer protection throughout the subscription process - Tighten requirements on the sales process for risky products - Strengthen accountability of general agents (GAs) - Digitalize the damage claiming process and improve procedures on claim adjustment, medical advice, etc. II. Enhancing the Role of Insurance as a Social Safety N
Attachment 1
Feb 15, 2021

FSC to Strengthen Inclusive Finance Measures

The FSC announced its plans to strengthen inclusive finance measures for this year on February 15. Key Measures A. Reduce Interest Payment Burdens on Lower Income Households (1) Work to improve the microfinancing options and encourage the private sector lenders to make more microloan opportunities available to low credit borrowers - Consider a wider reduction in interest rates for sunshine loan products and work to diversify microfinancing channels through different financial sectors - Provide incentives to financial institutions that have outstanding records in the provision of microloan products (2) Strengthen measures to root out illegal predatory lending and work to support victims B. Strengthen Targeted Support for Vulnerable Groups (1) Introduce a government-backed ultra-long term (40-year) home mortgage product for young adults and expand support to lower their rent costs (2) Diversify options for receiving reverse home mortgage payments and promote other financial products for those in and/or preparing for retirement (3) Allow a payment deferral of up to two years for those hit by COVID-19 before their debt adjustment payment obligations take effect (4) Work for the enactment of the new consumer credit bill (to be submitted to the National Assembly in H1 2021) to establish a fair system of debt adjustment between creditors and individual debtors C. Ensure Effective Implementation of the Financial Consumer Protection Act (1) Operate a taskforce to ensure a smooth implementation of the new Financial Consumer Protection Act (2) Set up an online bulletin board to announce a schedule of public information sessions and work to strengthen public awareness about the expected changes in rules * Please refer to the attached PDF for details.
Attachment 1