-
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
-
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
-
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.
-
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
-
Dec 09, 2020
-
Dec 09, 2020
-
Dec 09, 2020
-
Dec 09, 2020
-
Dec 09, 2020
-
Dec 09, 2020
-
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
-
Dec 03, 2020
-
Dec 02, 2020
-
Dec 02, 2020
-
Nov 30, 2020
-
Nov 26, 2020
-
Nov 26, 2020
-
Nov 25, 2020
-
Nov 19, 2020
- FSC Designates 5 More ‘Innovative Financial Services’ for Regulatory Sandbox
- The FSC added five more financial solutions to the financial regulatory sandbox on November 19, bringing the total number of ‘innovative financial services’ to 120 since launching the financial regulatory sandbox program on April 1, 2019.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1.A mobile app-based real name verification service for bank customers who visit bank branch without a government-issued identification (Shinhan Bank, expected launch in September 2021)2.A safe driving reward program, which offers a gift certificate of KRW10,000 to navigation app1 users with a car insurance policy2 when their driving records collected via a driving-tag3 meet safe-driving standards (Carrot Insurance SK Telecom, expected launch in December 2020)3.A point-payment service for an insurance claim that allows customers to purchase products or services at a discount with given points on an online platform (Hanwhalife, expected launch in April 2021)4.A credit card membership solution, which allows merchants to join membership through a mobile app (PayHere, expected launch in July 2021)5.A mobile credit card terminal solution, which uses the app on a smartphone as a card reader instead of a terminal machine (ANB Korea, expected launch in May 2021)* Please refer to the attached PDF for details.
-
Nov 18, 2020
- Government to Increase Amount of IPO Shares Available for Retail Investors
- BACKGROUNDWith the recent surge in the number of retail investors in stock trading, their demand for active participation in initial public offering (IPO) has increased. In the IPO process, however, it is important to secure the active participation of institutional investors to precisely price an IPO share. Securities firms as underwriters also play an important role in allocating shares. As stock prices fluctuate widely after an IPO, the expanded participation of retail investors in IPOs could make them more vulnerable to investment risks. The measures announced today are intended to ensure active participation of institutional investors and autonomy of the underwriters in an IPO process, while allowing more participation of retail investors.KEY MEASURES(ALLOCATION METHOD) Currently, shares available for retail investors, more than 20% of IPO stock, are allocated usually in proportion to the number of subscribed shares, or the amount of deposits. To give equal opportunities for all subscribers who deposited a minimum amount, more than half of shares available for retail investors will be allocated in the same amount, regardless of the amount of deposits.(LARGER ALLOCATION FOR RETAIL INVESTORS) i) Retail investors will be allocated a maximum 5% of unsubscribed shares for employee ownership; ii) As the 10% rule, which allocates 10% of public shares to high-yield funds, is set to expire by the end of this year, the amount of shares allocated to high-yield funds will be reduced to 5% from next year, while the remaining 5% will be allocated to retail investors.(SUBSCRIPTION AND ALLOCATION PROCESS) Multiple subscriptions by a retail investor using different underwriters in an IPO will be restricted. Securities firms will be required to inform retail investors of investment risks in subscription advertisements.IMPLEMENTATION SCHEDULEThe new rules will apply to securities registrations submitted after the revision to the Regulations on Securities Underwriting Business by