Press Releases - Financial Services Commission

Press Releases

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Jun 29, 2022

One-stop Lost Credit Card Reporting Service Available from Account Info Mobile App from June 29

The FSC announced the availability of the one-stop integrated lost credit card reporting service from a mobile application called Account Info from June 29 through which financial consumers using credit cards from different issuers can simply access the app to submit lost reports at once. Background Along with the Credit Finance Association and the payment card industry, the FSC has been operating a one-stop integrated lost credit card reporting service to protect card users.As of now, the one-stop integrated lost credit card reporting service is available at credit card companies through their mobile apps or websites, and the total number of lost card reports reached some two million until the end of December 2021. To help accommodate such wide usage of the one-stop integrated lost credit card reporting service and to improve service access and convenience for financial consumers, the authorities have been working to expand the availability of one-stop integrated lost credit card reporting service to the Account Info mobile app. Key Details From June 29, the one-stop integrated lost credit card reporting service is available on the Account Info mobile app. Within the Account Info mobile appthat provides one-stop integrated search and management of a users all financial account and card information, a new One-stop Lost Card Report function will be added under the menu My cards at a glance. On the Account Info app, users can (a) check which cards they are currently using, (b) choose the cards they want to report as being lost and (c) submit a lost report. With the reduction in time and process for submitting lost reports, it is expected that this service will improve consumer convenience and help lower the amount of damages resulting from lost or stolen cards. Lost reports for credit, debit or family cards issued under the same name as the person filing the lost report can use this service (corporate cards excluded) and this service can be used from overseas as well.
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Jun 23, 2022

FSC Holds 2nd Financial Risk Taskforce Meeting

FSC Vice Chairman Kim So-young held the 2nd financial risk taskforce meeting on June 23 jointly with the other relevant institutions.The meeting discussed the following three issues(a) expanded operation of the emergency response review system,(b) preparing ten major financial risk response tasks and focusing review on these issues and (c) working on preemptive support measures to prevent default risk of financial companies. In his opening remarks, Vice Chairman Kim stated that volatility has been expanding in global financial markets and there are growing concerns about economic slowdown amid a prolonging war in Ukraine and an acceleration of monetary tightening in the U.S. and other major economies. As such, Vice Chairman Kim emphasized that it is necessary to more closely and comprehensively check market risks with a strong sense of urgency as if a complex crisis situation may surface anytime. In addition, Vice Chairman Kim said that while maintaining a daily financial market monitoring system, the authorities have strengthened the emergency response review system through an expanded operation of the financial risk response taskforce and that the authorities will carry out monitoring focused on ten major response tasks. Vice Chairman Kim said that the government will promptly implement the financial support programs to help with peoples living conditionsthat have been included in this years second supplementary budget.Along this line, in order to identify and alleviate the hardship experienced by vulnerable groups, Vice Chairman Kim said that the authorities will set up and operate a taskforce to help relieve financial difficulties of vulnerable groups and prepare specific support measures in advance. While reviewing the risk factors and the liquidity and soundness conditions across the financial system, Vice Chairman Kim talked about the need for a plan to manage excessive leverage of specialized credit finance companies as their high dependence on the issuance
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Jun 20, 2022

2022 Korea Fintech Week to be Held in September

The FSC announced that the 2022 Korea Fintech Week, a global fintech exhibition, will be held from September 28 to 30 this year in cooperation with relevant institutions. With the availability of both offline and online participation, the Korea Fintech Week will help accelerate innovation in the fintech industry. (Offline) Three days of fintech IR events, investor consultation, job mentoring, fintech-themed seminars will help with investment promotion and employment opportunities. (Online) Exhibition halls, learning programs, experience programs and seminars will be operated online through metaverse. For participation in exhibition halls, idea contest, IR competition and investment consultation, please see detailed information below. Overview of 2022 Korea Fintech Week (Theme) Fintech, Tearing Down Barriers in Finance The 2022 Korea Fintech Week will be operated so as to help expand and replicate the innovation and growth of the fintech industry in close cooperation with relevant institutions. (Program) Offline and online events will be held simultaneously. a) (Offline) The 2022 Korea Fintech Week will provide a variety of venues for fintech firms, investors, relevant institutions and the public to come together through seminars, consultations, exhibitions and other standing programs. - (Opening Ceremony) Sharing outcomes of the fintech policy and presenting policy direction for innovation. - (Seminar) Seminars organized around specific fintech areas such as blockchain, data, etc. - (Investment) Providing opportunities for fintechs to attract investment through fintech IR, investment consultation, etc. - (Exhibition Halls) Introducing fintech services launched by fintech businesses and financial institutions. - (Programs for Participation) Providing an opportunity for prospective entrepreneurs to pitch ideas about fintech business models through idea contest and mentoring and giving fintech jobseekers a chance to have consultation. b) (Online) Various online program
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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
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Jun 16, 2022

Post Office-Bank Partnership Expanded to Improve Offline Access to Banking Services

FSC Vice Chairman Kim So-young presided over a memorandum of understanding (MOU) signing event between Korea Post, four major banks and the Korea Financial Telecommunications Clearings Institute (KFTC) on June 16 for expanding consignment partnership between the banks and the post office. Vice Chairman Kim also announced the governments plan for improving offline access to banking services in order to guarantee consumers choice in accessing financial services both online and offline and improve convenience for vulnerable groups such as the elderly. MOU Signing Korea Post, four major banks (Kookmin, Shinhan, Woori and KEB Hana) and the KFTC signed an MOU and agreed to proceed with the consignment of banking services (deposit, withdrawal functions, etc.) to post offices with a goal to make services available within this year. Summary of Vice Chairmans Opening Remarks Rapid digital transformation taking place recently throughout the financial industry including the banking sector has led to an increase in mobile-based and contactless financial transactions and a continuing decline in the number of bank branches. However, offline financial services will continue to play an important role for maintaining the quality of banking services, ensuring inclusive finance for vulnerable groups such as the elderly and meeting diverse demands of consumers. Moreover, it is necessary that the government and the industry make joint effort to help improve offline access to financial services. To this end, the authorities have prepared a plan for improving offline access to banking services to ensure the availability of offline channels that can serve as an alternative to bank branches. Improving Offline Access to Banking Services (Expanding Consignment Partnership) The authorities are seeking a diversification in the availability of offline channels offering simple banking services such as deposit and withdrawal functions through consignment of banking services to the post office and c
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Jun 13, 2022

Household Loans, May 2022

The outstanding balance of household loansin all financial sectors rose KRW1.8 trillion in May 2022, staying at a stable level despite a slight increase from the previous month (up KRW1.2 trillion).The financial authorities will continue to work on stably managing the growth of household debt. (Overall) Household loans in May 2022 increased KRW1.8 trillion across all financial sectors. The growth rate from the same month of the previous year was 3.4 percent, showing a halt in the declining trend seen from the second half of the previous year, but staying at a stable level in general. (By Type) Mortgage loans grew at a slower rate from the previous month but other types of loans including credit loans edged up slightly for the first time this year. - (Mortgage Loans) Mortgage-backed loans rose KRW1.6 trillion in May, showing a slowdown from the previous month due mainly to a drop in group lending for new apartment subscription (from KRW1.1 trillion to KRW0.2 trillion). - (Other Types of Loans) Other types of loans increased KRW0.2 trillion in May, edging up for the first time following a continued decline since the end of the previous year, with a growth in credit loans. (By Sector) Household loans in the banking sector went up at a slower rate compared to a month ago but the pace of the growth accelerated in the non-banking sector as credit finance companies and savings banks saw increases. - (Banking Sector) Banks saw an increase of KRW0.4 trillion in household loans, showing a decline from the previous month (up KRW1.2 trillion). Mortgage loans from banks rose KRW0.8 trillion,growing at a slower rate compared to the previous month (up KRW2.0 trillion), as jeonse loans expanded (up KRW1.1 trillion) but group lending for new apartment subscription edged lower (up KRW0.2 trillion). Other types of loans declined KRW0.5 trillion and fell at a slower rate compared to the previous month (down KRW0.9 trillion) as credit loans edged down KRW0.2 trillion. -(Non-Banking Sect
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Jun 09, 2022

Financial Authorities Hold Meeting to Review Risks in Insurance Sector

The FSC held a meeting on June 9 to review risks and discuss response measures in the insurance sector amid increasing volatility in financial environments due to increases in interest rates and the exchange rate.For insurance companies declining levels of risk-based capital (RBC) ratios as a result of steep rate hikes causing an expanded level of losses on valuation of bonds, the authorities have prepared a measure for providing a buffer to release a portion of surplus that insurance companies may recognize as available capital for calculating RBC ratios. Key Risk Factors Response Measures The meeting discussed in depth the risk factors in global financial markets such as interest rate hikes and exchange rate volatility following monetary tightening by major economies amid inflation pressure and prolonging war in Ukraine and dealt with both long- and short-term response measures. I. Prepare Buffer for Declining RBC ratio In response to declining RBC ratios following interest rate hikes, the authorities will recognize inclusion of the LAT(liability adequacy test) surplusinto the available capital for the calculation of RBC ratios.The current RBC system based on the difference between the mark to market valuation of assets and historical cost valuation of liabilities results in a decline in RBC ratios in times of rising interest rates as the new method only incorporates losses on valuation of assets into available capital. However, when applying this measure, reductions in insurance liabilities as a result of interest rate hikes are also incorporated as available capital, thereby providing a buffer to the decline in RBC ratios. Insurers will be able to include (a) 40 percent of the LAT surplus to their available capital (b) within the limit of losses on valuation of bonds available for sale. a) In times of interest rate fall, 40 percent of the LAT surplus reserve,which represent an increase in insurance liabilities, is deducted from the available capital. Considering
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Jun 03, 2022

Accounting Review Process to be Made More Expeditious and Transparent

The FSC introduced a plan to bring about improvements to the accounting review process with aims to prevent the prolonging of the review process and to ensure the protection of the right to defense for businesses undergoing scrutiny during the review process by the Financial Supervisory Service (FSS). The period of the review process will be one year in principle with a six-month extension allowed upon approval from Governor of the FSS for unavoidable reasons. To guarantee the right to defense for businesses undergoing scrutiny, improvements will be made to the contents of the prior notification form and the period for which businesses can access the QA document will be extended. Background An accounting review (or inspection) examines whether a companys financial statement and audit report have been prepared properly according to the relevant accounting and auditing standards. It is a supervisory function that seeks to protect various stakeholders such as investors and to encourage sound business management activities as well. Accounting review is an important aspect to bringing about innovation in capital markets and improving investor trust.Transparency in capital markets begins with the accuracy and promptness in the accounting information being disclosed and accounting review as a supervisory mechanism induces accurate accounting practices by businesses through identification and correction of inappropriate accounting information. In addition, under the principle-based IFRS system that recognizes diversity in accounting practices, accounting review provides guidance for businesses in conducting their accounting practices. The government has continued to make efforts to bring about improvements to the accounting review system since the accounting reform.With an introduction of the financial statement review system, the processing time for minor violations has been reduced considerably.The adoption of an adversary procedure during the review processhas helped to
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Jun 02, 2022

Debtor Assistance with Legal Representation and Litigation Services Available at Free of Charge

The FSC unveiled an overview of the current status on the use of debtor assistance with legal representation program on June 1. In 2021, a total of 1,200 victims of illegal private lending or debt collection activities applied for support in 5,611 cases and debtor assistance with legal representation was provided in 4,841 cases in total, which signifies that the debtor assistance program has become a crucial social safety net for damages inflicted by illegal private lending. The authorities plan to continue to make efforts to prepare for a rise in demand for remedies from illegal private lending by strengthening ties with various types of inclusive finance measures and securing sufficient fiscal resources, while working to stamp out illegal private lending by closely cooperating with investigative authorities. Overview Since January 28, 2020, the government has been offering the debtor assistance with legal representation programat free of charge to help victims of illegal debt collection activities done by both registered and unregistered money lenders and to support those that have fallen prey to exorbitant interest charges in excess of the maximum legal lending rate. When a victim of illegal private lending applies to seek support through the Financial Supervisory Service (FSS)s website or via a phone callplaced to the illegal private lending help center or the Korea Legal Aid Corporation (KLAC), attorneys from KLAC provide assistance with legal representation in dealing with illegal private lenders and for litigation services at no cost to debtors. (Legal Representation for Handling Debt Collection Issues) KLAC attorneys provide service of handling debt collection issues with creditors (money lenders) in place of debtors in order to help debtors avoid any harm caused by illegal debt collection activities. (Litigation Services) For damages incurred by exorbitant interest charges in excess of the maximum legal lending rate and illegal debt collection activities, K
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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.
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May 27, 2022

Government Approves Revision Bill to FSCMA for Introducing Business Development Companies

The government approved the revision proposal for the Financial Investment Services and Capital Markets Act (FSCMA) during a cabinet meeting held on May 26. The revision proposal introduces business development companies (BDCs), a new form of venture capital investment vehicle focused on investing in startups and innovative companies and which offer more cashability as they are listed on an exchange. BDCs will be required to invest at least a certain portion (e.g. 60%) of funds assets to startups and innovative companies and will be operated as closed-end funds, which will help companies to raise funds stably for a longer period of time. In addition, to allow investors to more easily liquidate their investment, BDCs will be operated as exchange-listed to enhance their cashability. The government expects that the introduction of BDCs will help (a) provide a more stable way of raising funds for early-stage businesses while providing retail investors an opportunity to diversify their investment into startups and innovative companies using an already established investment mechanism, (b) increase vitality in the economy by utilizing abundant market liquidity as venture capital and (c) promote sound investment practices on non-listed companies as BDCs will be operated by professional entities and will come under the purview of the FSCMAs regulatory framework. Background On May 26, 2022, the government approved the revision proposal for the FSCMA at a cabinet meeting with a goal of introducing business development companies, a new form of investment vehicle focused on investing in startups and innovative companies before they become listed on a major exchange. Key Details (Basic Direction) As a new form of investment vehicle, BDCs will be introduced in a way that incorporates the advantages offered by both publicly offered funds and private fundsapplication of an economy of scale and investor protection mechanisms offered by publicly offered funds and utilization of flexi
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May 24, 2022

Vice Chairman Speaks about Importance of Investor Protections in Meeting on Digital Assets

FSC Vice Chairman Kim So-young attended a meeting on the enactment of a law on digital assets with members of the National Assembly and officials from other relevant government agencies on May 24.The following is a summary of Vice Chairman Kims opening remarks. Vice Chairmans Remarks (Government Measures on Digital Assets) The government has been working on strengthening investor protections for digital asset transactions while providing support for innovation using blockchain technologies through an inter-ministerial approach.Starting from March 2021, the government has put in place a registration system for digital asset service providers through the revised Act on Reporting and Using Specified Financial Transaction and began to implement regulatory measures for anti-money laundering duties and investor protections. These measures were intended to minimize damages to users resulting from indiscriminate issuance of digital assets. Despite the need to further promote new and innovative technologies, however, there exist concerns about risks to investor protection and market stability as digital assets issued overseas are being traded in domestic markets without any regulations. (Future Plan on Digital Assets) As it has become evident from the recent crash of TerraUSD and Luna, the rapid growth of the newly emerging digital asset markets such as stablecoins and DeFi have spurred discussions globally about their impact on the stability of financial system, consumer protection and monetary and economic policies.In line with these discussions, there are currently thirteen relevant bills on digital asset investor protection pending at the National Assembly. Recently, the government has made building digital asset infrastructure and relevant regulatory framework as one of the key national policy initiatives and made an announcement accordingly. Some of the details of this policy task will include creating an environment where investors can invest in digital assets safely
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May 18, 2022

FSC Holds Financial Risk Assessment Meeting to Review Market Risks and Check Response Capability

The FSC held a financial risk assessment meeting jointly with the Financial Supervisory Service and the Korea Deposit Insurance Corporation on May 18 chaired by Vice Chairman Kim So-young to go over recent financial market situations and risks and check financial companies potential risks and response capabilities. Vice Chairman Kim So-young presided over the meeting and stated in his opening remarks that the current economic and financial conditions surrounding the Korean economy are not so favorable both internally and externally as this meeting was the first item on his schedule on the very first day of his tenure as the Vice Chairman of the FSC. Vice Chairman Kim urged authorities to maintain a sense of crisis and work with exceptional resolve as if potential risks in financial markets and system can turn up anytime amid rapidly changing financial environments. Moreover, to be able to respond to complex crisis in a timely manner, Vice Chairman Kim stated that the authorities will strengthen monitoring of financial markets while closely monitoring potential risks of financial companies and even the risks associated with the real economy such as the household and corporate sectors. Starting from today, Vice Chairman Kim emphasized that the authorities will work to make the financial market response system sturdier by maintaining close cooperation with relevant institutions while engaging in active communication with financial market experts. * Please refer to the attached PDF for details.
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May 11, 2022

FSC Approves Registration of Three P2P Financing Firms and Informs Users to Practice Caution

The FSC approved on May 11 the registration of The Asset Fintech Co., TGS Finance Co. and Ontwoin Co. for the operation of online investment-linked financial businesses (peer-to-peer or P2P financing business) as they satisfied the registration requirements specified under the Act on Online Investment-linked Financial Business and Protection of Users (the Act hereinafter). With the addition of three more entities, there are currently 47 registered P2P financing firms in total. For businesses that have already submitted their applications for registration, the FSC will promptly make decisions on their application review, and for those that have shown a potential of business closure, the authorities will seek measures to prevent damage to users. The FSC also said that users need to practice caution when using P2P financing and should beware of the following factors. First, users should note that there is no guarantee on principal investments and should refrain from investing in businesses that promise excessive rewards or have a record of lending excessive amounts to the same borrower. Second, borrowers need to check whether the interest rate and fee levels are in line with the maximum legal lending rate of 20 percent per annum which had been lowered since July last year. Registration of P2P Financing Business On May 11, three more business entitiesThe Asset Fintech Co., TGS Finance Co., and Ontwoin Co.have registered as P2P lending businesses with the FSC as they met the registration requirements specified under the Act. The registration of P2P lending firms under the Act is expected to help provide an enhanced level of protectionsfor P2P financing users and contribute to the improvement of credibility and sound developmentof the P2P financing industry in the future. Note for User Caution A. For Investors (No Guarantee on Principal Investments) P2P loans are highly risky products and do not guarantee collection of investments. When a borrower defaults on a loan, loss
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May 11, 2022

Household Loans, April 2022

The outstanding balance of household loansin all financial sectors rose KRW1.3 trillion in April 2022 as the decreasing trend seen since the beginning of this year came to a halt but staying at a stable level overall.The financial authorities will continue to closely monitor trends in household loans in order to help maintain its growth pace at a stable level and to prevent it from posing risk to the economy. (Overall) The household loan balance in April 2022 (up KRW1.3 trillion) edged up for the first time this year in contrast to a considerable drop observed in the previous month (down KRW3.6 trillion). However, the growth rate (up 3.1%, y-o-y) shows a continuing slowdown from the second half of the previous year. (By Type) Mortgage-backed loans went up slightly while other types of loans fell at a considerably slower rate, pushing up the total balance of household loans. Mortgage-backed loans in April rose KRW2.8 trillion, growing at a slightly slower rate compared to the previous month (up KRW3.0 trillion).Other types of loans edged down KRW1.6 trillion, declining at a significantly slower rate compared to the previous month (down KRW6.5 trillion), but keeping the trend of a slowdown from the end of last year. (By Sector) The balance of household loans edged up from the previous month in most sectors but the mutual finance sector (down KRW1.0 trillion) stayed on a downward trend due to a drop in non-mortgage types of loans. - (Banking Sector) The banking sector saw an overall increase of KRW1.2 trillion. Mortgage loans from banks rose KRW2.1 trillion, growing at a similar rate compared to the previous month (up KRW2.1 trillion).Other types of loans fell at a slower rate compared to a month ago (down KRW3.1 trillion), edging down KRW0.9 trillion as credit loans went down KRW0.5 trillion. -(Non-Banking Sector) In the non-banking sector, the household loan balance increased KRW0.1 trillion. Insurance companies (up KRW0.2 trillion), savings banks (up KRW0.3 trillion
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May 02, 2022

FSC Unveils Guideline on Securities Businesses Dealing with Fractional Investment

The FSC introduced a guideline on the recently expanding form of securities business dealing with fractional investment on April 28 in order to make available information about the applicability of the Financial Investment Services and Capital Markets Act (FSCMA) and things needed to be considered for business activities. Decisions regarding whether a fractional investment product qualifies as a financial security are determined on a case-by-case basis, taking into account various factors related to investments and transactions such as the contents of the contract and the terms of use in a comprehensive manner. Regardless of the method, formality or technicality in indicating the rights, decisions will be based on the actual contents of the indicated rights and the authorities will interpret and apply the rules in line with the purpose of the financial securities regulations. Business entities with a plan to issue and distribute fractional investment products that are considered as securities should abide by the FSCMA and all other relevant laws. However, a provisional regulatory exemption can be granted through the financial regulatory sandbox program when their innovativeness and necessity (utility) are particularly recognized and when they have established an investor protection system as well as a system for operating separate markets for the issuance and distribution of fractional investment products. Background Fractional investment is generally known as investing in a share of the ownership right for real-life assets, etc., and most investors perceive that they actually own a piece (fraction) of the ownership right through their investments. When investors have direct ownership,they can earn profits generated from the asset in possession and can exercise their rights including property rights regardless of the success or failure of the fractional investment business. The trading of real-life assets in this regard is not subject to financial regulations in pri
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Apr 27, 2022

Entry Barrier for Investing in KONEX Market to be Lowered Significantly from End of May

The FSC approved a set of revisions for the operational, disclosure and listing rules of the Korea New Exchange (KONEX) market and the listing rules of the KOSDAQ market during a regular meeting held on April 27. The revision is a follow-up to the measures to revitalize the KONEX market introduced in Januarythis year for the purpose of facilitating the growth of SMEs through capital markets. Key Revisions (Lowering Entry Barrier for Retail Investors) The revised measures abolish the minimum deposit rule requiring retail investors to deposit at least KRW30 million as well as the rule that requires investors to open up an exclusive account for small-sum investmentsfor making investments in the KONEX market. As such, retail investors will be able to invest in the KONEX market more at will. However, as the KONEX market is being regulated at a minimum level such as its rules on listing eligibility review, disclosure, etc., securities firms should notify investors who are new to investing in the KONEX market about the need to practice caution when making investments. (Facilitating Processes for KONEX-to-KOSDAQ Listing) In order to facilitate KONEX-listed companies to more easily move to KOSDAQ listing after going through a certain period of preparation, the revised measures partially ease the current financial requirements of KONEX-listed companies for being eligible for the fast track scheme.The revision also introduces new KOSDAQ listing tracks that are based on the KONEX-listed companys market capitalization and liquidity assessment but do not consider its financial conditions such as sales amount and operating profit. (Easing Rules on the Designated Advisor System)In order to help reduce burdens of KONEX-listed firms in maintaining their listing status and to promote KONEX market transactions, the revised measures limit the currently unending period required to have a designated advisor filing disclosure reports on behalf of the listed company to one year,thereby alle
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Apr 15, 2022

FSC Introduces Improvements to Cloud Computing and Network Separation Rules in Financial Sector

The FSC unveiled its plans to improve regulations on cloud computing and network separation in financial sectors on April 14. The financial industry has been raising concerns about difficulties in adopting and using new digital technologies as a result of excessive regulations on cloud computing and network separation. Therefore, in order to support the financial sectors efforts for digital transformation in a stable manner, the authorities have introduced a set of measures to improve regulations on cloud computing and network separation. On cloud computing, the changes will focus on (a) clarifying the scope (and types) of work that can make use of cloud computing, (b) overhauling the usage process to remove redundancies and similarities and (c) making a transition from the current prior reporting requirement to ex post facto reporting. On network separation, the uniform application of the network separation rules will be eased in stages starting with the development and test servers. Background The acceleration of digital transformation in financial services has been pushing up demand for new digital technologies such as cloud computing, big data analytics and artificial intelligence (AI). However, there have been continuous complaints from the industry that the current regulations on data security in the financial sector regarding cloud computing and network separation have been too strict, thereby hindering the adoption and use of new digital technologies. In order to address this issue, after taking into account various opinions from the financial industry,the FSC has prepared the measures for improving regulations on the use of cloud computing and network separation to promote digital innovation in the financial industry. Overview of Current Regulation on Cloud Computing and Network Separation I. Regulation on Cloud Computing (Usage Status) The financial sector has thus far been using cloud computingfor back office (non-essential types of work) purposes includi
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Apr 13, 2022

FSC Announces Screening and Licensing Plan for MyData Service Providers in 2022

The FSC announced this years screening and licensing plan for financial MyData service providers on April 13. The authorities will continue to provide support for innovative firms to enter the market in order to further promote the growth of MyData services as a key driver of growth in the financial industry. For consumer protection purposes, however, the authorities will strengthen pre-licensing control measures as well as post-licensing management. In order to provide more in-depth screening and consultation, the authorities will accept applications en bloc periodically at the end of every quarter and have them screened by external experts. Background MyData business came under the purview of the law with the revision to the Credit Information Use and Protection Act in February 2020 which aimed to strengthen personal data privacy and securityand ensure the stable provision of services.From an early stage, the authorities minimized the entry barrierto promote access of innovative firms while adopting a licensing system to help establish a sound MyData business ecosystem. Since the first batch of MyData service providers that were granted full license for operation on January 27, 2021, a total of 56 MyData service providers have been given full licenses with 45 MyData services being launched so far. However, there still exists demand for additional licensing by small-scale fintechs and financial companies. Therefore, after operating a taskforce composed of relevant experts,the authorities held discussions on MyData licensing plan for future as well as issues to consider for further screening and licensing. Screening and Licensing Plan for MyData Service Providers in 2022 The licensing requirements for new entrants will be maintained at the current level to promote a continuing provision of innovative services by new entrants that are equipped with creative ideas. Nonetheless, improvements will be made in the following areas for the purpose of consumer protection giv
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Apr 13, 2022

Household Loans, March 2022

The outstanding balance of household loansacross all financial sectors fell KRW3.6 trillion at the end of March 2022, continuing to show a steady decline as the pace of slowdown has picked up compared to the previous month (down KRW0.3 trillion).The balance of household loans in March grew 4.7 percent from a year ago, steadily declining from the second half of the previous year. By type, mortgage-backed loans in March increased KRW3.0 trillion,growing at a slightly faster rate compared to the previous month (up KRW2.6 trillion) but continuing to maintain the pace of a slowdown since the second half of the previous year. Other types of loans including unsecured loans fell KRW6.6 trillionled by the banking and mutual finance sectors, showing an accelerated pace of slowdown from the end of the previous year. By sector, the balance of household loans dropped KRW1.0 trillion in the banking sector as mortgage-backed loans went up KRW2.1 trillionbut other types of loans including credit-based loans fell KRW3.1 trillion.The nonbank sector saw a drop of KRW2.6 trillion, showing an accelerated rate of slowdown compared to the previous month (down KRW0.1 trillion) led by the mutual finance sectors. The trends in household loans continue to be on a stable path as the balance of household loans declined KRW3.6 trillion in March 2022 and fell considerably from the previous month. Although mortgage-backed loans increased KRW3.0 trillion, other types of loans including unsecured loans dropped significantly (down KRW6.5 trillion) due to increases in borrowing rates, an expanded application of the debt service ratio (DSR) rule on individual borrowers and a slowdown in housing transactions,leading to an expansion in the pace of slowdown in aggregate terms. The financial authorities will continue to closely monitor trends in household loans in order to help maintain its growth pace at a stable level. * Please refer to the attached PDF for details.
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