Press Releases - Financial Services Commission

Press Releases

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Dec 22, 2020

FSC Designates 15 More 'Innovative Financial Services' for Regulatory Sandbox

The FSC added fifteen more financial solutions to the financial regulatory sandbox on December 22, bringing the total number of ‘innovative financial services’ to 135 since the launching of the financial regulatory sandbox program on April 1, 2019.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. A mobile food order platform within the existing mobile banking application that offers convenience and low-cost financial services to both registered small merchants and consumers (Shinhan Bank)2. A personal health condition rating service offering discounts to existing health insurance premiums (Grade Health Chain)3~5. Personal authentication and ID verification services using facial recognition technologies (Kakao Bank, Toss Securities, Toss Innovation)6. A contactless real-name verification service based on digital certification system (Coinplug)7. An online-based business insurance subscription service that allows an easier sign-up process (DB Insurance)8. A group insurance service offering coverages for small scale employers with less than five employees (Kyobo Life Insurance)9~11. Mobile gift card services using e-commerce platforms (Hana Life Insurance, Kyobo Life Insurance, etc.)12~14. Monthly housing rent payment services using credit cards (Samsung Card, Woori Card, Hyundai Card)15. A credit card reward points service that helps small merchants save on credit card transaction fees and offers them reward points on credit card sales amount on the next business day following credit card transaction (Shinhan Card)* Please refer to the attached PDF for details.
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Dec 22, 2020

FSC Grants Preliminary MyData Licenses

The FSC decided to grant preliminary MyData business licenses to twenty-one financial institutions, fintechs and electronic financial businesses out of a total of thirty-five applicants on December 22. The approved entities were tested on six specific categories, such as the minimum capital requirement, data security capacity, appropriateness of business plan, shareholders’ financial background, board qualifications and professional expertise.For eight other applicants, application review is ongoing as they are asked to take supplemental actions to meet requirements.Aside from the approval process, the authorities are working on measures to strengthen consumer protection in MyData sector. The authorities plan to come up with a specific guideline in this regard in February 2021.* Please refer to the attached PDF for details.
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Dec 21, 2020

FSC Chairman Reviews Policy Response to COVID-19 & Discusses Next Year's Financial Policy

FSC Chairman Eun Sung-soo held a meeting via teleconference on December 21 to assess the implementation of the COVID-19 financial support programs and discuss the 2021 financial policy direction.At the meeting, Chairman Eun stated that the effective provision of the COVID-19 financial support packages was made possible due to close cooperation from all financial sectors, which also helped to create the right conditions for an economic rebound. As a result, out of the KRW175 trillion-plus stimulus programs, about 76 percent of the first phase emergency loan program for small merchants was provided within the first two months and some KRW32.5 trillion in special lending support for SMEs and middle market enterprises was provided in excess of the original target amount of KRW29.1 trillion. Since April, the financial authorities, local lenders and other relevant institutions were able to systematically respond to the crisis by holding financial risk assessment meetings thirty-one times.With regard to the protracted pandemic situation and the next year’s financial policy direction, Chairman Eun stressed the importance of strict compliance with virus prevention measures and urged cooperation from all financial sectors. As the COVID-19 pandemic continues to place burdens on small merchants and SMEs, Chairman Eun indicated his intention to focus on the vulnerable sectors.Chairman Eun also pledged to preemptively manage risks emanating from abundant market liquidities by preventing concentration of liquidities in high risk assets and promoting an orderly deleveraging.Finally, Chairman Eun called for financial institutions to take a leading role in the country’s transition toward a “first mover” economy in the post-pandemic era, highlighting the importance of their active participation in the government’s New Deal initiative and carbon neutral goal for 2050.* Please refer to the attached PDF for details.
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Dec 21, 2020

Open Banking Available from Mutual Finance & Securities Firms

The FSC announced the availability of open banking services from five mutual finance businesses, the Korea Post and thirteen securities companies starting from December 22.During the first half of 2021, savings banks and credit card companies will also join the open banking system.In addition, from January 1, 2021, open banking inquiry fee levels for participating institutions will be reduced to one third of the previous levels.With more types of financial institutions joining the open banking system, it will help promote competition and improve consumer convenience.* Please refer to the attached PDF for details.
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Dec 21, 2020

Plans to Improve Rules on Market Makers & Tighten Monitoring of Illegal Short Sale Trades

The FSC introduced measures to improve market maker rules and strengthen detection of illegal stock short-selling activities on December 21 with an aim of boosting accountability in the market and establishing an effective monitoring system for illegal short sale activities. BACKGROUND The National Assembly passed a revision bill to the Financial Investment Services and Capital Markets Act on December 9, which introduces stricter penalties on illegal short sale activities. Along the same line, the government has prepared the following measures to improve rules on market makers and to strengthen monitoring of illegal short sale activities in order to boost accountability and develop a more effective system for market supervision. KEY MEASURES I. IMPROVING RULES ON MARKET MAKERS Marker makers quote prices on both buy and sell sides to satisfy the market. The marker maker system was first introduced in the derivatives markets in 1999 and then in stock markets in 2005. Recently, however, there have been concerns about the possibility of the abuse of the system as the trade volume of market makers has grown significantly as well as their short sale orders. In this regard, the Korea Exchange has conducted inspections on market makers compliance with short sale regulations, covering their transactions data from January 2017 to June 2020, and has found a few suspicious cases of naked short selling and violation of the uptick rule. To address this problem, the following measures have been drawn up to help restore confidence in market makers and foster their market making function. a) Introduce restrictions on short sale trades - Ban market makers short selling of mini-KOSPI 200 futures and options (when acting in their capacity as market makers) - Discontinue the uptick rule exemption for market makers in stock markets to address the issue of unfairness - Develop an automated monitoring and detection system for naked short selling activities and violation of the uptick rule
Dec 18, 2020

Tech Financing Guildeline to Facilitate Effective Lending Support For Innovative SMEs

The FSC announced the introduction of a new tech financing guideline, which outlines details about the specific target business sectors and relevant procedures of tech financing. The guideline will go into effect from January 2021.BACKGROUNDSince it was first introduced in January 2014, tech financing grew significantly as more banks and tech credit bureaus (TCBs) became interested in offering financing options to innovative SMEs based on their technological prowess and future growth potential. Until now, five tech credit bureaus and ten banks have been providing tech credit evaluation service using their own evaluation models. In order to strengthen the accountability and stability of tech financing and improve its qualitative standards, a guideline on tech financing has been established as follows.KEY DETAILS1) Setting up necessary infrastructure for tech financing- Require TCBs to set up a division specializing in tech financing and specify division members’ professional qualifications- Introduce a standardized TCB evaluation model to enhance consistency and stability- Establish an independent organization charged with inspecting the standard TCB evaluation model2) Providing support to SMEs with technological prowess and innovativeness- SMEs with innovative ideas in manufacturing, knowledge and content industries, tech-based environmental or construction sectors, new and renewable energy sectors, as well as those with proven records of technological prowess through patents, etc.3) Establishing clear procedures on tech financing- Provide specific guidelines on tech financing procedures for SMEs, banks, TCBs and Korea Credit Information Services- Make site inspections mandatory in principle with specific cases for exemption- Require tech credit evaluating institutions to set up internal inspection frameworks to ensure the appropriateness and fairness of their tech credit evaluation4) Recommending a set of professional rules and ethics for banks and TCBs- Promote
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Dec 17, 2020

KoFIU Begins Operating Upgraded AML System

The FSC announced that the Korea Financial Intelligence Unit (KoFIU) will begin to operate an upgraded anti-money laundering system from December 17, which will improve efficiency in its suspicious transaction report system, strengthen assessment and analysis capabilities and enhance information security.BACKGROUNDThe KoFIU analyzes suspicious transaction reports (STR) and currency transaction reports (CTRs) of financial companies and provide results to law enforcement agencies for detection and prevention of money laundering activities. It is a central AML infrastructure connecting about 6,000 reporting entities, eight law enforcement agencies and some twenty related administrative agencies. Since the system began to operate in 2002, the rising volume of reports it handles has placed increasing burdens on the system. To address this problem, the KoFIU started upgrading the system in May 2019, and after system development and a test run, the upgraded AML system began its operation on December 17, 2020.IMPROVEMENTS EXPECTATIONS(INCREASED EFFICIENCY IN STR SYSTEM) The upgraded AML system enables financial institutions to file STRs about three times more than that of the previous capacity. The KoFIU’s processing capacity has also increased about five times, guaranteeing a swift and secure transfer and processing of the rising volume of STRs.(STRENGTHENED ASSESSMENT ANALYSIS CAPABILITIES) The upgraded AML system utilizes machine learning technology in assessing and analyzing money laundering activities. By directly connecting KoFIU with other administrative agencies, it also greatly reduces the time it takes to gather necessary data from relevant institutions.(ENHANCED INFORMATION SECURITY) The upgraded AML system has been set up at the National Information Resources Service to ensure high levels of security and stable management.FURTHER PLANSThe authorities will work to ensure system stability and continue to effectively respond to money laundering schemes that are b
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Dec 16, 2020

FSC Plans to Promote Role of Insurers in Healthcare Industry

The FSC announced its plans to expand the role of insurance businesses in the provision of non-medical healthcare services on December 16. The FSC will work to improve relevant regulations through consultative body meetings on digital finance and by setting up a taskforce to prepare more detailed plans in the first half of 2021.BACKGROUNDHealthcare and insurance share a common denominator in offering security to individuals, although the functional linkage between the two has been severed due to restrictions in regulation and limitations in technology. However, with the advancement of technologies in the areas of Internet-of-Things, big data and platforms, a convergence between healthcare and insurance services is increasingly becoming available. Amid an aging society and higher prevalence of chronic diseases, the newly emerging healthcare industry has received growing attention. As such, the FSC plans to pursue a mid- to long-term strategy of promoting the role of insurers in the provision of non-medical healthcare services, which will contribute to the overall improvement in the healthcare system.KEY MEASURESI. ALLOW INSURERS TO PROVIDE HEALTHCARE SERVICES TO GENERAL PUBLICCurrently, insurance companies are allowed to provide non-medical healthcare services only to their own coverage subscribers, such as personal health data management and fitness assistance platform services, as indicated by the guidelines issued by the Ministry of Health and Welfare. This service provision will be extended to the general public with the expectation of promoting diversity and quality of healthcare services while lowering insurance premiums in the long run.II. IMPROVE RULES ON SUBSIDIARIES FOR INSURANCE BUSINESSESCurrently, insurance companies are permitted to own shares of subsidiaries in the areas prescribed by the Enforcement Decree of the Insurance Business Act. However, due to a lack of specific provisions, there exist legal uncertainties with respect to whether insurers are
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Dec 14, 2020

FSC Chairman Holds Press Briefing and Discusses Policy Outline for Next Year

FSC Chairman Eun Sung-soo held a virtual press briefing on December 14 and discussed key policy plans for the next year.The following is a summary of Chairman Eun’s remarks.(LOOKING BACK TO 2020) In the wake of the pandemic declaration earlier this year, financial markets fell into turmoil temporarily. Contractions in economic activities put extra burdens on small merchants and self-employed business owners. Then, the KRW175 trillion-plus emergency support programs were introduced by the government to respond to the situation in a prompt and preemptive manner. As a result, the OECD forecast Korea’s 2020 economic growth to be the first among its member economies. In recent weeks, KOSPI has been setting record highs as well.This successful market turnaround was made possible due to the effectiveness of K-quarantine and economic response measures on top of strong corporate earnings performance. While focusing our attention on the COVID-19 crisis management, the FSC has also worked on financial innovation, consumer protection and fair economy measures this year. The revision to the Credit Information Use and Protection Act built foundations to develop data industry. The consultative body meetings on digital finance have focused on establishing an environment for fair competition between financial companies, fintechs and big techs. The Financial Consumer Protection Act is scheduled to go into effect next year and the newly passed legislation on the supervision of non-holding financial groups will help remove loopholes. In the meantime, however, the issue of large scale investor damages in the wake of redemption halts by some PEFs remains regrettable.(2021 FINANCIAL POLICY OUTLINE) The first policy task is overcoming the pandemic crisis. Overcoming the spread of the virus requires prompt treatment, preventive measures and development of vaccines. The COVID-19 financial policy requires a well-balanced functioning of financial support for the vulnerable sectors, financi
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Dec 14, 2020

FSC Chairman Speaks about the Need to Strengthen Anti-Money Laundering Measures

FSC Chairman Eun Sung-soo presented commendations to those who contributed to the prevention of money laundering at an event held on December 14 and spoke about the need to strengthen AML capabilities.The following is a summary of Chairman Eun’s remarks.The Financial Action Task Force’s 2020 mutual evaluation report on Korea placed Korea’s AML regime on a par with that of some of the advanced economies. It is the result of close cooperation between the financial institutions, law enforcement agencies and financial authorities.Amid growing threats about the diversification and advancement of money laundering techniques, especially through digital finance, it is necessary to draw up plans to strengthen AML capabilities focusing on the following measures.First, the Korea Financial Intelligence Unit (KoFIU)’s investigation and analysis capabilities should be strengthened and its communication with law enforcement agencies expanded.Second, the AML supervision and inspection capabilities should be bolstered. With technological advancements and newly emerging industries, more and more business entities will be subject to AML compliance.Third, more professional personnel should be hired at the KoFIU for a more systematic human resources management and to improve the level of expertise. The need to increase international cooperation on AML, rising cases of suspicious transaction reports and growing numbers of entities being subject to AML compliance all require an improvement to the organizational capacity.In order to ensure an effective functioning of the AML regime, close cooperation is essential among all relevant institutions, including the financial institutions, KoFIU and law enforcement agencies.* Please refer to the attached PDF for details.
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Dec 10, 2020

5th Digital Finance Meeting Unveils Plans to Improve Rules and Regulations

Vice Chairman Doh Kyu-sang held the 5th consultative body meeting on digital finance on December 10 and discussed ways to improve rules and regulations for an ‘upward leveling’ of financial regulations for financial institutions, fintechs and big techs alike, which will promote competition and innovation for all.VICE CHAIRMAN’S REMARKSAmid significant changes taking place in the financial industry, fintechs are growing rapidly, big techs are entering financial markets and traditional financial institutions are actively pursuing digital innovation. In this process, the existing regulatory regime has not been able to sufficiently take into account the changing digital environment. There also have been concerns about the lack of fair competition and the need to apply same regulations for same functions. As such, the competition has become fiercer with growing uncertainties about the future.To promote communication and cooperation between different market players, the consultative body meeting on digital finance was established on September 10. A series of meetings with different market players since then helped to collect diverse opinions and suggestions. With the goal of ‘upward leveling’ of financial regulations for financial institutions, fintechs and big techs alike, the FSC has prepared plans to level the playing field and take into account the needs of different market players.KEY SUGGESTIONSA total of forty out of sixty-two suggestions (65%) have been accepted on the issue of regulatory arbitrage and digital transition, with fifteen others pending for mid- to long-term review.I. REGULATORY ARBITRAGE ISSUE- Expand opportunities for banks to operate platform business- Allow credit card companies to operate one-stop payment service business- Establish rules to oversee big techs’ platform sales activities- Allow financial companies to invest in and own shares of fintechs- Make data provision for MyData more equitable for banks and electronic financial bu
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Dec 09, 2020

FSC Will Continue to Ensure Convenient & Safe Certification Mechanisms in Financial Services

As the government announced the discontinuation of the public key certification system beginning on December 10, the FSC has prepared the following frequently asked questions to help financial consumers better understand the changes in their use of financial services.FREQUENTLY ASKED QUESTIONSQ) The public key certification system will be discontinued from December 10. Does that mean that financial transactions can be carried out without a certification?A) In principle, you still need a certification when required by a financial transaction. However, any type of certifications provided by private sector entities can be used in place of the current public key certification.Q) What happens to the existing public key certification when the discontinuation starts on December 10? Can I no longer use my public key certification to conduct financial transactions?A) Even after the discontinuation begins, you may still use your current public key certification to carry out various financial transactions.Q) Can I apply for the issuance of a new public key certification after December 10?A) Yes, you can still apply for the issuance of what will be newly termed the ‘common key certification.’Q) What types of certifications are available for the use in contactless financial transactions?A) There is the ‘common key certification’ issued by the Korea Financial Telecommunications Clearings Institute and KOSCOM, individual bank-issued certifications and certifications issued by telecom companies and platform businesses.Q) As of now, where and how can I get a private sector-issued certification?A) You can easily get it online by visiting websites of a commercial bank or a securities firm or on their mobile apps.Q) What are some of the upsides of the private sector-issued certification system?A) There is no need to download and install special software. You can use online cloud services to store your certification. Plus, biometric authentication and passcode identification off
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Dec 09, 2020

Government to Tighten Penalties on Illegal Stock Short Sale

The FSC announced the passage of a revision bill to the Financial Investment Services and Capital Markets Act at a plenary session of the National Assembly on December 9. The revision bill focuses on regulating illegal short sale activities including naked short sale to improve the accountability of domestic stock markets. The revision bill contains the following provisions.KEY PROVISIONS(A) IMPOSE PENALTY SURCHARGE AND CRIMINAL PENALTY ON ILLEGAL SHORT SALECurrently, illegal short sale activities are punishable with minor fines. To strengthen punishment, penalty surcharges will be imposed up to the amount of short orders as well as criminal penalties of a minimum one year of imprisonment or a fine of more than three times and up to five times the avoided loss amount. The introduction of strict monetary sanctions and criminal penalties will help prevent intentional attempts at illegal short sale while preventing investor errors and mistakes.(B) REQUIRE SHORT SELLERS TO KEEP RECORDS OF LOAN AGREEMENTS FOR FIVE YEARSShort sellers need to keep their securities lending agreements for five years and promptly submit them to the financial authorities when requested. This will help improve transparency and help financial authorities to more readily identify illegal short sale activities.(C) RESTRICT SHORT SELLERS’ PARTICIPATION IN EQUITY FINANCINGShort sellers will be prohibited from participating in equity financing of companies whose stocks they have shorted once the companies’ plans for equity financing have been disclosed. A penalty surcharge of up to KRW500 million will be imposed on violation of this provision.(D) STRENGTHEN REGULATION ON SHORT SALE BANThe temporary provision in the current enforcement decree that allows the authorities to prohibit stock short sale if it is deemed necessary to ensure the safety of stock markets and guarantee fair prices will be made permanent through this revision to the Act.FURTHER PLANSOnce the revision to the Financial Investme
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Dec 09, 2020

Household Loans, November 2020

The outstanding balance of household loans in all financial sectors rose KRW18.3 trillion from the previous month at the end of November 2020 (up 7.9% year-on-year). The household loan balance increased KRW13.6 trillion in the banking sector and KRW4.7 trillion in the non-banking sector.By type, mortgage loans increased KRW6.8 trillion in November, dropping KRW0.5 trillion from the previous month (up KRW7.3 trillion y-o-y). In the banking sector, mortgage loans expanded KRW6.2 trillion, down KRW0.6 trillion from the previous month, as jeonse loans grew at a slower rate. Mortgage lending by non-banks saw an increase of KRW0.6 trillion from the previous month. Other types of loans grew KRW11.5 trillion as credit-based lending by both banks and non-banks rose KRW7.4 trillion and KRW4.1 trillion, respectively, due to high demand for IPO deposits and front-loaded demand ahead of tougher regulations on credit lending.The government will continue to closely monitor trends in household loans and check the implementation of household debt management plan.* Please refer to the attached PDF for details.
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Dec 09, 2020

Improvements to Indemnity Health Insurance to be Introduced in July Next Year

The FSC announced the introduction of improvements to the current indemnity health insurance system beginning in July next year, which will help prevent moral hazard and lower premiums for the insured. The FSC expects that the improved structures will help ensure that indemnity health insurance plans can continue to provide important social safety nets alongside the state-operated national health insurance (NHI) service.BACKGROUNDIndemnity health insurance policies provide important social safety nets as they offer coverages to health care costs that are not covered by the NHI. As of the end of 2019, some 38 million individuals were covered by indemnity health insurance plans. When it was first introduced in 1999, the availability of fully covered plans guaranteeing no out-of-pocket expenses created moral hazard of excessive hospital visits and medical testing. Excessive use of health care services by a few has been pushing up premiums for others while insurers have seen a spike in loss ratios. A continuation of this trend in indemnity health insurance raises concerns about rising premiums and the sustainability of indemnity health insurance services. As such, the FSC has prepared the following measures to address these issues.KEY MEASURESI. LOWER PREMIUMS WHILE GUARANTEEING THE SAME LEVEL OF COVERAGE(COVERAGE) New indemnity health insurance policies will provide the same level of coverage as previously available on most types of illnesses and injuries with the maximum coverage of about KRW100 million for both in- and outpatient services. However, in order to prevent moral hazard of excessive and unnecessary use and provision of medical services, out-of-pocket expenses and deductions for outpatient services will be increased.(PREMIUM) Due to the increase in out-of-pocket expenses and outpatient deductions, insurance premiums will be significantly lower compared to the previous levels. Considering high levels of loss ratios, it is expected that premiums of newly avai
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Dec 09, 2020

Legal Grounds Established for Supervision of Non-holding Financial Groups

The FSC announced the establishment of new legal grounds for the supervision of non-holding financial groups as the new legislation was passed at a plenary session of the National Assembly on December 9.KEY PROVISIONS- NON-HOLDING FINANCIAL GROUPS: Have two or more subsidiaries operating financial businesses with total financial assets of KRW5 trillion or more.- INTERNAL RISK MANAGEMENT: An internal group-wide risk management body should be established led by the group’s top representative company to oversee the group-wide risk management policy, handle regulatory compliance, pursue prudential management, etc.- INTERNAL ASSESSMENT: Non-holding financial groups should conduct self-assessment on their capital adequacy requirements to maintain financial soundness while taking into account intra-group transactions and risk concentrations.- REPORTING DISCLOSURE REQUIREMENTS: Non-holding financial group’s top representative company is required to report and disclose the group-wide capital adequacy status and risk factors to the FSC, which in turn may request a submission of a management improvement plan if deemed necessary to prop up capital or reduce risky assets.The authorities expect that the new legislation on the supervision of non-holding financial groups will help foster a self-regulating risk management system for the regulated entities. The authorities will be able to more preemptively manage systemic risks in financial markets while minimizing the possibility of risk transfers and preventing damages to consumers and investors. In this regard, the government will continue to work for the advancement of both group-wide and systemic risk management schemes. * Please refer to the attached PDF for details.
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Dec 09, 2020

FSC to Work on Risk Management and Inclusive Finance

Vice Chairman Doh Kyu-sang held the 31st financial risk assessment meeting via teleconference on December 9 and discussed the year-end financing situation of businesses as well as the outlook for financial markets in 2021 and risk preparation. The following is a summary of Vice Chairman Doh’s remarks.(CURRENT MARKET SITUATION) Financial markets have been enduring difficulties presented by the protracted COVID-19 pandemic. The OECD projects Korea’s economic growth in 2020 to be the highest among its members and second to China among the G20 economies. KOSPI rose to a record high of 2,700 points on December 4 and KOSDAQ’s market capitalization is continuing to set new record highs. The corporate bond market also shows a smooth interplay between demand and supply with interest rates at stable levels. In terms of the recent surge in stock markets, some KRW60 trillion net buying by retail investors this year contributed most to the quick recovery of stock markets. In this regard, the government will continue to work for the fairness and transparency in stock markets and to foster trust from market participants.(ASSESSING RISK FACTORS) With the availability of vaccines in major economies, there are expectations for normalization. However, it may take a long time to reach a level of herd immunity given the time it takes for mass production and distribution of vaccines. Thus, excessive optimism should be cautioned against and various risk factors should be closely monitored. While many countries are maintaining expansive fiscal and monetary policies at unprecedented levels, BIS and IMF warned against the rise of asset prices detached from the real economy, concentration of liquidity and expansion of leverage. The rise of high-risk asset investments amid an ultra-low rate environment also poses a risk. The financial authorities will closely monitor these risk factors and respond promptly when necessary.The authorities will also keep a close eye on the business and hous
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Dec 07, 2020

FSC to Introduce Routine Inspection of Personal Data Protection at Financial Institutions

The FSC unveiled its plans to introduce a routine inspection of personal data protection at financial institutions on December 4 to ensure consistency in data protection and improve accountability. The plans include establishing specific inspection standards according to the data lifecycle, providing feedbacks on a regular basis through Financial Security Institute and setting up self-inspection guidelines for financial institutions. The routine inspection on the performance of data protection is scheduled to go into effect on February 4, 2021.BACKGROUNDWith the availability of new technologies, data pseudonymization/anonymization, data convergence and so on, the process of monitoring and inspecting how financial institutions handle data protection needs improvements. In this regard, the following issues have been identified as problematic—(a) lack of specific inspection standards, (b) difficulty in carrying out a comprehensive and systematic inspection on more than 3,000 financial institutions and (c) lack of self-inspection guidelines for financial institutions. To address these issues, the FSC has drawn up the following measures.KEY MEASURESI. IMPROVE INSPECTION CRITERIA STANDARDSIn order to ensure a close inspection of the performance of data protection, specific inspection criteria will be established with 9 overall categories and 143 subcategories. The detailed inspection criteria will reflect the different stages of data lifecycle and will be measured in four levels—(a) compliant, (b) partially compliant, (c) not compliant and (d) not applicable.To guarantee a systematic management and monitoring of the newly available technologies, such as data pseudonymization/anonymization, data convergence and so on, a close inspection on the compliance status of technical and managerial data protection measures will be carried out. Financial institutions with outstanding performance and an accident-free status for a certain period will be awarded safety certification
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Dec 03, 2020

FSC to Introduce Improvements to Subscription Economy's Payment and Refund System

The FSC announced its plan to improve rules on subscription businesses’ payment system to enhance consumer protection and user experience on December 3.Subscription businesses generally attract customers by offering free subscription to their services first. However, once the free subscription period expires, the procedure of informing customers about the details of recurring payments and their cancellation and refund policy has remained inadequate. As such, the FSC plans to work on the following measures to strengthen consumers’ right to information, simplify the cancellation process and make more refund options available in subscription businesses.KEY MEASURESI. ESTABLISH STANDARDIZED TERMS AND CONDITIONS(DEFINITION OF RECURRING PAYMENTS) A clearly defined scope of recurring payments will be introduced on the standardized terms and conditions.(NOTIFICATION REQUIREMENT) Subscription businesses will be required to notify their customers at least seven days prior to switching their services from free offering to recurring payment-based services.(CANCELLATION) The process of cancelling a subscription service will be made easier through mobile applications and online platforms and the cancellation of services will be made available even after the regular customer service hours.(REFUND POLICY) When a cancellation of recurring payments occurs, only the amount of fee commensurate with the used monthly service may be charged, while more refund options will be made available through credit cards and account transfers.II. STRENGTHEN PAYMENT GATEWAYS’ SUPERVISION OVER THEIR AFFILIATESBy introducing revisions to the Enforcement Decree of the Specialized Credit Finance Business Act, legal grounds will be established that will allow payment gateways to strengthen supervision over their affiliates and ensure that their affiliates provide appropriate transaction information to customers.* Please refer to the attached PDF for details.
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Dec 02, 2020

2021 Budgetary Expenditures to Focus on Economic Recovery and Financial Inclusiveness

The FSC announced its budgetary expenditures of KRW3.9 trillion for 2021, which will be allocated for (a) pandemic recovery and post-COVID-19 preparation measures, (b) boosting economic recovery and (c) ensuring support for the financially vulnerable groups.I. COVID-19(MARKET STABILIZATION) Liquidity injection of KRW229.6 billion and KRW12.6 billion through Korea Development Bank and Industrial Bank of Korea, respectively, to minimize effects of the pandemic(KOREAN NEW DEAL FUND) KRW510 billion investment in the Korean New Deal fund through KDBII. ECONOMIC RECOVERY(NEW GROWTH ENGINES IN FINANCIAL INDUSTRY) KRW18.4 billion in comprehensive support for fintechs and KRW1.24 billion in support for KONEX listing of early stage SMEs and startups(SMES MIDDLE MARKET ENTERPRISES) (a) KRW65.2 billion investment in innovative solutions in key industries and in facility investment in new growth sectors, (b) KRW45 billion in facility investment to improve the industrial workplace environment and (c) KRW240 billion investment toward the innovation venture fund in support of the country’s materials, parts and equipment industriesIII. FINANCIAL INCLUSIVENESS(STEADY SUPPLY OF STATE-BACKED HOUSING LOANS) KRW50 billion investment in Korea Housing Finance Corporation to ensure a steady supply of fixed rate housing loans(MICROFINANCING OPPORTUNITIES) KRW195 billion investment in Korea Inclusive Finance Agency to ensure a steady supply of microloan products for various groups* Please refer to the attached PDF for details.
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