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Dec 27, 2022
- FSC Launches Organizational Shift to Create Divisions Working to Stamp out Securities Frauds
- The FSC announced on December 27 that the Capital Market Fraud Investigation Unit was reorganized into two divisionsin order to set up a system that facilitates effective investigation of securities frauds. Background As unfair trading practices in capital markets recently become more sophisticated and intelligent, it is necessary to set up new divisions dedicated to conducting investigations into violations of capital market laws as well as adding personnel to root out securities frauds. Against this backdrop, the FSC established the Capital Market Investigation Unit in September 2013 and has since cooperated with the Prosecutors Office, the Financial Supervisory Service, the Korea Exchange, and others to counteract such fraudulent activities. Despite such concerted endeavors, it remains difficult to effectively act against such unlawful activities only with a single unit, because securities frauds have become more complicated due to a significant expansion in the size of capital markets, the rising number of market participants, and the utilization of social network services. Details of Organizational Reshuffle The FSC has worked to launch an organizational reshuffle to reinforce divisions exclusively responsible for investigation into potential frauds in capital markets. As a result, the Capital Market Investigation Unit will be expanded into two divisions: the Capital Market Investigation Coordination Division and the Capital Market Investigation Division. The newly created Capital Market Investigation Coordination Division will be charged with planning, overall management and coordination in investigating unfair trading activities in capital markets, classification of unfair trading cases, performance of duties assigned to judicial police officers of capital markets, and external relations related to investigation into capital market frauds. The Capital Market Investigation Division will be responsible for wide-ranging tasks such as investigation and measures r
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Dec 26, 2022
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Dec 26, 2022
- FSC Plans to Bolster Support to Promote Sustained Growth of Fintech Businesses
- The FSC announced a set of measures to strengthen support for fintech businesses, which is confirmed after discussion and deliberation at the 5th financial regulatory innovation committee meeting held on December 20. Against the backdrop of the current industrial situation where fintech businesses face funding shortages amid interest rate hikes, waning impetus of industrial growth and difficulties in expanding their business into overseas markets, these measures will expectedly boost multiple facets of fintech business supports, such as funding or promotion of startups. Key Measures I. Strengthen Support through Investment and Policy Funds a) (Increasing the Size of Fintech Innovation Fund) The size of the fintech innovation fund, initially planned as KRW500 billion for four years (2020-2023), will be increased to KRW1 trillion by adding KRW500 billion for another four years (2024-2027). Authorities will improve operation methods by (a) ensuring continuous operation of the early-stage fintech investment fund, which has been operated intermittently, and (b) newly creating a commercialization fund intended to make investment in those who seriously prepare business expansion at the commercialization stage. b) (Increasing Support through Policy Financial Institutions) Tailored support for fintech businesses will be made in the form of loans and guarantees from policy financial institutions in the amount of at least KRW200 billion a year. c) (Establishing Comprehensive Fintech Support System) Authorities will set up and operate Fintech Support Council, consisting of representatives form 14 institutionsthat currently operate their own fintech support programs, to make their support programs more systematic and effective. The participating institutions will establish a common databaseto monitor the growth history as well as the record of support provided for each fintech business. A fintech focused investor relations (IR) event will be held at least once every half a year.
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Dec 22, 2022
- FSC Unveils Measures to Improve Corporate Financial Data Infrastructure to Support More Businesses
- The FSC announced a plan to make improvements to the corporate financial data infrastructure to assist micro-enterprises, SMEs and innovative businesses for which the availability of relevant data infrastructure has been inadequate thus far. The key measures include (a) revamps of the corporate data management system operated by the Korea Credit Information Services (KCIS), (b) expansion of data sharing with financial sectors on innovative businesses in new industries, (c) improvement of the entry regulation for business credit bureaus (business CBs) more reasonable and enablement of CBs for data-specialized institutions and (d) reviewing a launch of MyData service tailored to the needs of sole proprietors. As these measures have been discussed at the 5th financial regulatory innovation committee meeting held on December 20, authorities will seek prompt implementation of the detailed measures. Background Financial authorities have successfully introduced various systems, including the financial MyData service and improvements to the personal credit rating system, to bring about innovation in consumer finance. In corporate finance, too, authorities have subdivided business CBs into several licensing unitsand lowered their entry requirement.However, there still exists insufficiency of credible data on micro-enterprises, SMEs and innovative businesses. For SMEs and micro-enterprises, there is not enough data being produced and distributed to be utilized in corporate finance, and business CBs capabilities of data management remain inadequate. As such, even when a company has decent repayment capacity, it may be asked for an excessive level of collateral or guarantee, or face the burden of unfavorable borrowing conditions such as a low level of maximum loan amount or high interest rate. For innovative businesses, due to inadequate information on new industries, financial institutions face difficulties in evaluating the growth potential and the innovativeness of new indus
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Dec 22, 2022
- Korea Appointed as Inaugural Member of IFRS Sustainability Standards Advisory Forum
- The Financial Services Commission (FSC) and the Korea Accounting Institute (KAI) have been appointed by the International Financial Reporting Standards (IFRS) Foundation as inaugural member institutions of the Sustainability Standards Advisory Forum (SSAF) representing Korea on December 21, 2022. The SSAF is established to support the International Sustainability Standards Board (ISSB) to develop and revise IFRS sustainability disclosure standards. It will be comprised of relevant government authorities and standard-setting institutions from around the world. Including those from Korea, thirteen representatives of jurisdictions and regions from around the worldthe European Union, the UK, Canada, China, Japan, Brazil, etc.have been appointed as SSAFs inaugural members. The U.S. Securities and Exchange Commission (SEC), the European Commission (EC), the International Organization of Securities Commission (IOSCO) and the Global Reporting Initiative (GRI) will also participate as official observers. From Korea, the FSC and the KAI have been appointed as joint members to the SSAF, and the Korean delegation will be led by Director Kim Kwang-il of the FSCs Fair Market Division. The FSC and the KAI will attend the SSAF meetings four times annually. In the standard-setting process, authorities will effectively relay various opinions from domestic industries, academia and experts on sustainability disclosure. The first meeting of the SSAF will be held at the ISSB head office in Frankfurt, Germany in the first quarter of 2023, and presumably, the final standards for the general sustainability-related disclosure requirements and the climate-related disclosure requirements that were previously announced in March 2022 as well as the ISSBs future standard-setting directions will be discussed. * Please refer to the attached PDF for details.
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Dec 21, 2022
- FSC Holds Seminar and Unveils Measures to Protect General Shareholders in M&As via Stock Transfer
- The FSC held a seminar with the Korea Exchange (KRX) and the Korea Capital Market Institute (KCMI) on December 21 and announced measures to protect general shareholders in corporate mergers and acquisitions (MAs) via stock transfer. In his opening remarks, FSC Vice Chairman Kim so-young spoke about the purpose of the seminar and suggested the governments policy direction as follows. Summary of Vice Chairmans Remarks Corporate mergers and acquisitions in domestic market mostly take place in the form of stock transfers. However, it has been suggested that ways to protect general investors in that process havebeen inadequate thus far. The European Union and Japan, for example, provide protection for general investors by mandatory bid rules, while the United States protects the rights of general shareholders through the strengthened role of board of directors and the advanced system of civil procedure. As such, when a change in the ownership status of management right takes place, the government plans to grant the shareholders of the acquired company an opportunity to sell their shares to the acquiring company. This will help improve the principle of equal treatment of shareholders by enabling general shareholders to share the control premium of the company just like the controlling shareholder. In the meantime, the government will seek a balanced approach to promoting MAs while protecting general shareholders at the same time. In this regard, authorities will prepare compensatory measures to ensure that there is no weakening of the positive function of MAs, which is creating synergistic effects between businesses. With todays announcement, the new administrations policy initiatives to protect general investors in capital markets have all been introduced. For the measures requiring a legislative process, authorities will prepare relevant bills to ensure prompt implementation. Key Measures I. Background and Overview When an entity acquires control of a listed company thr
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Dec 20, 2022
- Government Approves Revision Bill to Strengthen Rights of General Shareholders in Split-off of Listed Company
- The government approved an amendment to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) at the state council held on December 20. This amendment is a follow-up to the measures to improve protection for general shareholders in IPO of split-off subsidiary announced on September 5. Key Details and Anticipated Effect Until the end of this year, all three layers of general shareholder protection system regarding IPO of split-off subsidiary become established and begin operation. With this system, it is expected that companies will pay sufficient attention to the rights and interests of general shareholders when they pursue a split-off and losses incurred to general shareholders in a split-off of a subsidiary, which has been pointed out repeatedly, will be effectively prevented. a) (Enhanced Disclosure) From October 18 this year, companies seeking to split off a subsidiary disclose their business restructuring plan including the purpose of split-off, anticipated effect, shareholder protection measures and listing plan on their material fact reports. - As a result, general shareholders and investors can get adequate information related to the split-off and make informed decisions at general meetings of shareholders, when exercising the right to request companies to purchase their shares and when making investments. b) (Right to Request Company to Purchase Shares) The amendment approved today grants shareholders, who dissent from the companys split-off decision, a rightto request that company purchase his or her stocks when the companys board of directors reaches a resolution to make a split-off. - If a majority of general shareholders is opposed to the split-off or that a potential drop in company value is triggered, pursuing a split-off in itself can be difficult. Therefore, in essence, listed companies can pursue a split-off only when they prepare shareholder protection measures in place and have convinced general shareholders
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Dec 19, 2022
- FSC Unveils Measures to Improve the Soundness of IPO Market
- The FSC unveiled measures to bolster the soundness of the initial public offering (IPO) market. The key measures include (a) allowing bookrunners to test the waters through demand survey to determine an appropriate price band of an IPO, (b) making bookrunners check institutional investors abilities to pay for stocks under their responsibility and, after that, accept subscriptions and carry out allotment of shares, and (c) increasing the limit range of the quotation price on the day of IPO to promote formation of an equilibrium price early on. Background An initial public offering (IPO) is a gateway for unlisted firms going public as well as an essential mechanism in capital markets. In this regard, it is important to make sure that price discovery function in public offering markets works properly and enables investors to make stable investments at fair value. Although the recent IPO market boom has somewhat subsided, the following behaviors that threaten a sound order in the market still exist. First, it can be challenging to determine the right price band for an IPO because assessing how market demand will change as an IPO price shifts remains difficult. Second, at the subscription stage, investors subscribe in shares which far exceed the actual demand to secure the portion of shares they hope to get allocated. Such actions set up a vicious cycle where investors fictitiously oversubscribe, resulting in excessive competition, which in turn leads to oversubscription. Third, after going public, there are worries about harm to investors from the phenomenon where stock quotation prices immediately reach the upper limit price on the first day or on the first and second days of an IPO, causing a situation of de facto transaction halt, and then collapse. Against this backdrop, in order to ensure that the IPO market can serve its original goal of helping unlisted firms entry into public offering markets and to promote the development of the IPO market based on more fairnes
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Dec 19, 2022
- Authorities Meet with Banks to Discuss Resumption of Bank Bond Issuance
- The FSC held a meeting with the related authoritiesand the banking sector on December 19 to examine the banking sectors lending and borrowing situation and discuss resumption of bank bond issuance. At the meeting, participants shared a common assessment that financial markets such as the bond market and foreign exchange market are gradually returning back to stabilityas a result of expectations for a slower pace of monetary tightening at home and abroad, as well as the government and financial institutions initiative to stabilize the market. However, as there still exist uncertainties in financial markets concerning price levels, trends of economic slowdown and the pace of monetary tightening in major advanced economies, participants reached to the same view that it is still vital to maintain a state of vigilance in responding to market situations. Financial authorities expressed appreciation for the active market stabilization efforts the banking sector showedand said that authorities will continue to make available policy-based support programs (bond market stabilization fund, corporate bond and CP purchase program, etc.) to ensure market stability. At todays meeting, participants discussed how to restart bank bond issuance, which has been refrained so far for the goal of maintaining stability in the bond market. The banking sector raised the issue that there currently exist diverse types of demands for issuing bank bonds, for instance, to deal with their outstanding bonds coming to maturity soon, to respond to the outflow of consumer deposits, and to expand corporate loans, etc. In particular, considering the recent signs toward stabilization in the bond market and the year-end lending and borrowing needs of banks, the banking sector suggested the gradual restart of bank bond issuance at least for the purpose of refinancing bonds that are about to mature. Taking into account the latest supply and demand situation of bond markets as well as expert opinions, partic
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Dec 13, 2022
- New Legislative Bill on Individual Debtor Protection Approved at Cabinet Meeting
- The government approved a new legislative bill on the management of individual financial debt and the protection of individual debtors at a cabinet meeting held on December 13. This bill aims to strengthen rules regarding creditor financial institutions financial debt and the protection of individual debtors. Background Since personal credit loans became widely prevalent in the 2000s, authorities have made a series of improvements to arrive at the current framework on the individual debtor protection system.As a result, considerable improvements have been made in how debt collection should be carried out. However, from the perspective of individual delinquent debtors, it has been pointed out that they still face excessive penalty fees for overdue debt and harsh debt collection because of the following reasons. First, there exists no legally supported process through which a debtor can directly bargain with a financial institution to enter into a debt settlement quickly.Second, the currently available Fair Debt Collection Practices Act has limits in its capacity in terms of providing support for debtors recovery and enhancing their rights and interests because it passively prohibits certain types of debt collection activities such as assault, battery and threat. Third, collection on delinquent debt held by creditor financial institutions are increasingly being performed by third parties via entrustment and transfer, which led to debt collection practices with negligence on consumer protection and a focus on demanding debt payment. In order to address these issues, authorities have prepared a system of rules aimed at achieving proper balance in the rights and obligations of creditor financial institutions, debt collectors and individual debtors. Key Details a) Scope of rules and definitions: This bill sets forth rules regarding the overall management of individual financial claim after it becomes delinquent. The term individual financial claim means a debt claim held
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Dec 13, 2022
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Dec 08, 2022
- Household Loans, November 2022
- In November 2022, the outstanding balance of household loansacross all financial sectors declined KRW3.2 trillion (m-o-m). Household loans continued to show a declining trend as the year-on-year growth rate in November dropped for the first time since relevant statistics became available in 2015.Financial authorities will stably manage the grow rate of household debt and work to seamlessly implement the normalization of relevant loan regulations to help alleviate the difficulties of non-speculative homebuyers. (Overall) Household loans across all financial sectors dropped KRW3.2 trillion in November. The growth rate (down 0.3 percent, y-o-y) fell for the first time since relevant statistics began to be collected in 2015, which shows a sustaining trend of a slowdown since the second half of last year. (By Type) Mortgage loans grew at a slower rate and other types of loans fell more rapidly from the previous month, leading to acceleration in the overall pace of the decline in household loans. - (Mortgage Loans) Mortgage loans rose KRW0.5 trillion in November, growing at a slower rate compared to the previous month (up KRW2.0 trillion), led by jeonse loans. - (Other Types of Loans) Other types of loans declined at a faster rate (down KRW3.6 trillion) compared to a month ago (down KRW2.2 trillion), led by a drop in credit loans. (By Sector) Household loans in the banking sector continued to drop while the nonbanking sector also saw a shift to a decline. - (Banking Sector) Banks saw a drop of KRW1.1 trillion in household loans. Mortgage loans from banks grew KRW1.0 trillion,rising at a slower rate compared to the previous month (up KRW1.3 trillion), as government-sponsored mortgage lending and group lending for new apartment subscription went up KRW2.6 trillion and KRW0.6 trillion, respectively. Other types of loans from banks fell KRW2.0 trillion, declining at a faster rate compared to the previous month (down KRW1.9 trillion), led by a drop in credit loans (down KRW1.8
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Dec 07, 2022
- FSC Chairman Attends KDB NextRound's Fintech Special Round and Speaks about Expanding Fintech Investment
- FSC Chairman Kim Joo-hyun attended the Fintech Special Round event hosted by the Korea Development Bank NextRound on December 7. At the event, Chairman Kim briefed on the direction of governments policy aimed to drive innovation in digital finance and cultivate the fintech industry, while encouraging fintech startups that seek to attract investment. Summary of Congratulatory Remarks by FSC Chairman FSC Chairman Kim Joo-hyun highlighted that the future of our financial industry is dependent on how well the government responds to the fourth industrial revolution and digital transformation as the pace of such shifts accelerates. To follow these shifts, the government has so far spared no effort to come up with multifaceted measures such as introduction of a financial regulatory sandbox program and creation of the fintech innovation fund. However, as global monetary tightening and the three highs such as inflation, high exchange rates and high interest rates, etc. intensify economic uncertainty, the venture business and startup markets around the globe are facing the severe funding winter, and fintech sectors are struggling with this difficult situation. Against this backdrop, Chairman Kim underscored his plan to strengthen policy support to help fintech companies to overcome this hard time and enlarge innovation capacity to drive the future of financial industry. The following shows details of this policy support. I. Expanding Availability of Funding Support for Fintech Startups The authorities will offer support to help innovative businesses grow such as introducing the innovation growth fund worth of KRW15 trillion for five years from 2023 and a new Silicon Valley-style lending program for venture businesses, which will offer loans combined with zero-interest rate bonds with warrants. Furthermore, the authorities plans to bolster the financial support system specialized for fintech businesses with increasing the size of the fintech innovation fund from KRW500 billion
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Dec 07, 2022
- Authorities Hold Meeting to Monitor Flow of Funds and Risk Factors in Financial Markets
- On December 7, the FSC met with the pertinent authoritiesto review the flow of funds and risk factors in the financial sectors and to go over future response plans. Participants in the meeting agreed that recent volatility in the domestic money market appears to be stabilizing, which is supported by expectations for a slower pace of tightening monetary policy both domestically and internationally as well as the implementation of a number of market stabilization measures. Participants concurred that caution must be exercised in light of the special funds situation involving year-end account settlements and the December meeting of the U.S. Federal Open Market Committee. Participants shared the opinion that consistent government policy support and efforts by the financial industry are necessary to firmly ensure market stability. The Bank of Korea (BOK) and financial authorities will work to smoothly implement the market stabilization programs set up to stabilize the money market. a) The bond market stabilization fund is currently undergoing another capital call, which will be finished by January 2023. Additionally, the BOK intends to provide liquidity to the financial institutions it has invested in, up to KRW 2.5 trillion. b) The Korea Development Bank (KDB), Industrial Bank of Korea (IBK), and Korea Credit Guarantee Fund (KODIT) are currently operating a corporate bond and CP (commercial paper) purchasing program worth a total of KRW11 trillion. In particular, the P-CBO (primary collateralized bond obligation) program, worth KRW5 trillion, will start running the following year to help large businesses, middle market enterprises, and SMEs issue corporate bonds. c) The PF-ABCP (project finance asset backed commercial papers) purchasing program for those backed by securities companies is currently providing prompt assistance in response to market demands from the PF-ABCPs approaching maturity (total KRW1.8 trillion).The PF-ABCP purchasing program for those backed by con
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Dec 06, 2022
- FSC Plans to Temporarily Expand Government-sponsored Mortgage Loan Program
- The authorities plan to temporarily operate a special Bogeumjari Loanby integrating Relief Conversion Loanand Conforming Loanand existing Bogeumjari Loan. Recent interest rate hikes resulting from global monetary tightening have significantly increased households debt servicing burden. In this regard, aiming to reduce the debt payment burden of more borrowers, the government will temporarily run a special Bogeumjari Loan that integrates together the regular type of Relief Conversion Loan, Conforming Loan, and the existing Bogeumjari loan for a year from the beginning of 2023. For the newly introduced special Bogeumjari Loan, debtors whose house price is KRW900 million or less will be able to apply regardless of their income.Maximum loan amount will be increased from KRW360 million to KRW500 million. Borrowers can use this loan for purposes of purchasing a new house, replacing existing loans or returning security deposits. The special Bogeumjari Loan will be granted at a single interest rate in the same way as the current Bogeumjari Loan program. Meanwhile, a concessionary interest rate will be applied, which is decreased to a certain extent from an appropriate interest ratethat is calculated with the current method. The specification of the loan including detailed implementation schedule and concessionary rate will be announced later, after considering computational adaptation, preparation periods for financial institutions, and etc. * Please refer to the attached PDF for more details.
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Dec 01, 2022
- Authorities Plan to Disclose Identity of Entities Committing Unfair Trading Practices
- As a way to bolster prevention of unfair trading practices in capital markets, the FSC plans to disclose the identity (corporate name, etc.) of those who violate capital market regulations such as restriction of short sales and prohibition of market disturbances and receive a disposition of a penalty surcharge or an administrative fine for that violation. This measure shall apply to the violators receiving sanctions at the 22nd regular meeting of the Securities and Futures Commission (SFC) scheduled to be held in December 2022. Their identities will be announced through the FSC website in February 2023. Background The FSC has gradually extended the scope and detailsstock items, dates and penaltiesof disclosure of the SFC resolutions on sanctions that are made available for unfair trading practices in capital markets. However, the identity of violators is not being disclosed currently due to the potential misuse of their corporate or individual financial transaction information by a third party. Nonetheless, there is a growing need to secure effectiveness of sanctions measures imposed on unfair trading activities in capital markets such as illegal short sales. Therefore, after a careful consideration, the FSC decided to expand the scope and details of disclosure of sanctions by unveiling the identity of violators. Disclosure of Identity of Entities Violating Capital Market Regulations If an investigation led by financial authorities ends up with sanctionsof imposing a penalty surcharge or an administrative fine, the identity (corporate name, etc.) of the violator will be unveiled. Although the violators that become subject to sanctions are mostly corporate entities, in some cases, individuals also become subject to sanctions when they commit unfair trading practices such as activities of disturbing market order. If unfair trading activities in capital markets under the investigation led by financial authorities are subject to criminal punishment,in consideration of t
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Nov 29, 2022
- Taskforce on Improving Internal Control of Financial Companies Announces Interim Results
- The taskforce on improving rules regarding financial companies internal control announced its interim discussion results on November 29. The key discussion details focus on strengthening the role and responsibility of chief executives, boards of directors and executive officers over their companies internal control affairs to boost the effectiveness of internal control mechanisms. Background Pursuant to the requirement for internal control standards and procedures (Article 24-1) prescribed under the Act on Corporate Governance of Financial Companies, all financial companies are currently operating their own internal control mechanism to prevent illegal activities committed by their executive officers or employees and the like. It is aimed at avoiding the risk of potential loss in the future and erosion of a companys reputation related to the soundness of company management and consumer protection. Since its introduction, there is an increased level of awareness throughout financial sectors about the significance of internal control. However, in reality, as setup and operation of an internal control system requires considerable efforts and costs, different companies have different levels of internal control standards and procedures, which vary significantly depending on the business strategy and willingness of the management. The more a company focuses on short-term performances, the more its internal control will remain perfunctory, which will probably prove inadequate in its function and effectiveness for the operation in the field. In particular, the successive occurrence of a number of financial accidents such as incomplete sales of financial products and large-scale embezzlement recently has raised the awareness and concerns about internal control of financial companies. Apart from inflicting losses to consumers and shareholders, financial accidents can have a significant impact on the overall health of the economy and society with a degradation of trust in fina
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Nov 28, 2022
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Nov 24, 2022
- FSC Chairman Meets with Venture Startups and Holds Talks on Boosting Investment
- FSC Chairman Kim Joo-hyun visited Mapo Front1, the largest startup support center in Korea, on November 24, where he held talks with venture businesses, venture capitalists and financial institutions. Chairman Kim listened to difficulties and complaints from startups and venture businesses and also asked financial institutions to increase investment and support for startups and venture businesses. Summary of FSC Chairmans Remarks Startups and venture businesses are essential for increasing our economys growth potential and creating jobs. Thus, it is important to establish an ecosystem where they can thrive. Meanwhile, to improve our economys competitiveness, more startups and small businesses with technological prowess and innovativeness need to be fostered even in times of investment drought. Therefore, the FSC and policy financial institutions will strengthen their support for innovative and promising venture businesses by providing more funding opportunities and acting as a priming pump to attract more private sector investments. For this, the innovative growth fund worth KRW15 trillionwill be created over the next five years to support SMEs and startups in new industries such as semiconductor and artificial intelligence (AI) and to supply venture businesses the funds in need to grow up into unicorn companies. Second, policy financial institutionsKorea Development Bank (KDB), Industrial Bank of Korea (IBK) and Korea Credit Guarantee Fund (KODIT)will introduce a lending program worth KRW6.3 trillion, which will provide funds to startups and venture businesses based on loan examinations focused on their growth potential rather than their financial statements and the value of collaterals. In particular, the IBK will introduce a new lending program for venture businesses, modeled after those observed in Silicon Valley, which will offer loans with zero-interest rate bonds with warrants (BWs) attached. This program will enable early-stage venture businesses to continue
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Nov 21, 2022
- FSC Plans Regulatory Reforms in Insurance Sector to Promote Digital Transformation
- The FSC announced a plan to reform regulations on insurance businesses to help the insurance sector more effectively respond to emerging demands for new services and to facilitate the entry of specific business models expected by the market. The plan has been screened by the financial regulatory innovation committee at its 4th meeting held on November 14. Authorities will prepare revision bills to amend relevant laws with a goal of submitting and passing them at the current 21st term of National Assembly. Background The FSC has listened to opinions on the areas that require regulatory reforms through discussions within a taskforceon insurance sector (from February) and the survey of demands (June-July) conducted across all financial industry groups. Among 234 regulatory reform items raised by eight financial industry groups, the demand for regulatory reform in the insurance sector was particularly high (77 items). According to the taskforce and the survey, the insurance industry faces hindrance in effectively adapting to disruptive changes of business environment due to outdated and stringent regulations. First, even with a spread of digital economy based on network- and platform-based services, the level of digital transformation in the insurance market is still at a nascent stage, requiring an urgent industrial restructuring. Second, compared to insurance markets in other countries and other domestic financial markets, insurance businesses face excessive regulations for product development and asset management, which restrict insurance companies from supplying diverse types of financial products and weaken their global competitiveness.Third, there are cases where the rigor of penalizing practices and supervisory administration led to excessive restriction on the sales activities of insurance companies. For the consumer service of the supervisory authorities to deal with civil complaints, which cannot be served promptly due to the limited number of staff members an
