Press Releases - Financial Services Commission

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Jul 06, 2020

FSC Holds Seminar to Further Develop Open Banking System

The FSC held an open banking seminar to promote vibrant discussions on ways to further develop the open banking system on July 6. Vice Chairman Sohn Byungdoo attended the seminar and delivered congratulatory remarks. The following is a summary of Vice Chairman Sohn’s remarks.The launching of open banking service last year brought about meaningful changes to the financial industry and increased convenience for consumers. Cooperation between banks and fintechs big techs is making a “banking as a platform” possible. The ease of access to payments networks has enabled fintechs and big techs to come up with more innovative financial services in more efficient ways. For consumers, the increased convenience of being able to use a variety of financial services in a single app and not having to switch between different platforms offers them more choice.In order to build upon the progress and further develop our open banking system, the following factors should be considered.(a) Expandability: expanding open banking service to non-banks, such as mutual finance, to promote competition and innovation while boosting consumer convenience(b) Consumer trust: guaranteeing information security, data protection and consumer protection(c) Openness: providing an open platform for all participating banks and institutions(d) Stability: ensuring a close monitoring system to minimize risks that may arise from the participation of multiple playersThe government will support open banking’s expandability, stability and reciprocal openness through relevant regulations. It is expected that the open banking system will catalyze the development of more innovative financial services, as it combines the accountability and stability of the so-called legacy banks and the convenience and innovativeness of the fintechs and big techs.FURTHER PLANThe FSC and the KFTC will draw up specific plans to further improve the open banking system in the third quarter this year. More types of financial insti
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Jul 06, 2020

3rd Supplementary Budget to Ensure Implementation of COVID-19 Financial Support Programs

The FSC announced that more than KRW4.7 trillion in fiscal resources has become available to facilitate smooth implementation of the various pandemic-related financial support programs as the National Assembly passed the 3rd supplementary budget on July 3.COVID-19 FINANCIAL SUPPORT(a) KRW1.5323 trillion in emergency financial support for small merchants, SMEs and middle market enterprises(b) KRW3.327 trillion capital injection to policy banks for providing emergency liquidity support to major industries and enterprisesOTHER SUPPORT MEASURES(a) KRW10 billion to support economic recovery(b) KRW100 billion to support agriculture and fisheries(c) KRW25 billion to increase the availability of microloans for low-income, low-credit groups(d) KRW50 billion to support KAMCO’s corporate asset purchase program* Please refer to the attached PDF for details.
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Jul 02, 2020

FSC to Inspect Fraud-prone Sectors for Financial Consumer Protection

The FSC and the FSS unveiled plans for comprehensive inspections targeting fraud-prone areas to stem potential damages to financial consumers from illegal activities.BACKGROUNDAs low interest rates and ample liquidity in financial markets prompted a growing number of retail investors to jump into investment in high-risk financial products, incidents of financial fraud or improper practices have been on the rise, making retail investors vulnerable to huge losses. Frequent incidents of consumer damages could undermine investors’ trust in financial markets and spread into systemic risks. As such, the financial authorities will launch comprehensive inspections on targeted areas deemed vulnerable to fraud or other illegal activities.TARGET AREAS INSPECTION PLANS(TARGET) Four areas where consumer losses from illegal activities are concentrated► private equity funds; ► peer-to-peer lending; ► illegal activities by unregistered financial service providers; and ► illegal predatory lending practices vishing(INSPECTION FRAMEWORK) Inspection teams made up of officials from the FSS and other relevant institutions will be created to cover each target area and will report their progress once a month at the financial risk assessment meeting.(SECTOR-SPECIFIC PLANS)► PRIVATE EQUITY FUNDS: A two-track approach of (a) self-inspection of all private equity funds (a total of 10,394 as of May 2020) and (b) official site inspection of all private fund managers (a total of 233 as of May 2020) (a) Self-inspection (from July to September 2020): A taskforce made up of fund sellers, managers, trustees and administrators will begin self-inspections from mid-July and report results to the FSS upon completion. If any irregularities or illegalities are found during the inspection, the T/F is required to immediately report to the FSS. (b) Site-inspection (until 2023): An FSS-led inspection team will be established by mid-July to probe all private fund managers over the next three years.
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Jul 02, 2020

Implementation Status of COVID-19 Financial Support Programs

OVERVIEW OF FINANCIAL SUPPORT PROGRAMSIn response to the impact of the Covid-19 on the real economy and the spread of anxieties in financial markets, the government has introduced KRW175 trillion-plus financial support programs intended to help businesses and to stabilize markets. (a) KRW100 TRILLION-PLUS FINANCIAL SUPPORT PACKAGE to provide small businesses with emergency loans and stabilize financial markets(March 19 March 24) (b) KRW40 TRILLION STABILIZATION FUND FOR KEY INDUSTRIES KRW35 TRILLION ADDED TO THE FINANCIAL SUPPORT PACKAGE (April 22)To prevent gaps in the availability of support, the government has also prepared a KRW5 trillion working capital support program and KRW2 trillion-plus support package for auto parts industry. (June19)IMPLEMENTATION STATUS▪ Financial support programs for small merchants and SMEs disbursed KRW44 trillion, two thirds of the target amount of KRW68 trillion over the past three months.▪ Financial market stabilization programs (KRW73.5 trillion) serve as a backstop to the financial markets, although the uptake of such programs remained limited due to the faster-than-expected recovery in the markets.I. SMALL-SCALE BUSINESSES SMES (KRW68 TRILLION)(a) For small-scale businesses, KRW27.1 trillion out of KRW38.9 trillion provided (70%) in ultra-low interest rate loans, loan extensions and guarantees through policy banks and private banks(b) For SMEs and middle market enterprises, KRW16.7 trillion out of KRW29.1 trillion provided (57%) in loans and guarantees as well as interest payment and fee exemptionsII. MARKET STABILIZATION MEASURES (KRW73.5 TRILLION)(a) Stock market stabilization fund (KRW1.2 trillion out of KRW10.7 trillion total) and bond market stabilization fund (KRW3 trillion out of KRW20 trillion total) set up to provide a backstop to the financial markets(b) P-CBOs in the amount of about KRW504 billion and KRW695 billion issued in May and June, respectively, and KRW1.2 trillion in corporate bond and CP refinancing sup
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Jul 02, 2020

2020 Online Korea Fintech Week to be Available until the End of Year

The 2020 Online Korea Fintech Week which began on May 28 has attracted more than 170,000 visitors and 110 million page views during the one month period. A total of 150 virtual exhibition halls are available hosted by financial companies and fintechs.In online job fair events, 35 companies have participated, and more than a thousand job seekers applied for about 80 positions at 21 fintech firms.The Korea Growth Investment Corporation has successfully linked investors with fintechs and provided one-on-one meeting opportunities as well. As a result, about KRW52.9 billion in venture capital investment has been successfully provided to six fintech firms.The 2020 Online Korea Fintech Week will run until the end of this year at www.fintechweek.or.kr/2020.* Please refer to the attached PDF for details.
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Jul 01, 2020

FSC Announces Plans to Further Promote Use of Big Data in Finance

The FSC announced its plans to make financial big data more widely available on July 1, which include making improvements to the Korea Credit Information Services’ CreDB system and newly creating an open big data system at the Korea Financial Telecommunications Clearings Institute.BACKGROUNDData is considered as an essential commodity in digital economy, and opening up large sets of data stored at public institutions to be utilized by companies is crucial. In this regard, the FSC has been building the necessary big data infrastructure to facilitate the opening up, distribution and convergence of data through following stages.(CREDB SYSTEM) Personal and business credit information system called CreDB was established at the Korea Credit Information Services, offering financial data to financial companies, enterprises and academia beginning on June 3, 2019.(FINANCIAL DATA EXCHANGE) Financial data exchange was launched on May 11, 2020, providing a one-stop data search, transaction and distribution service.(OPENING UP PUBLIC FINANCIAL DATA) About 44.5 million pieces of public financial data stored at the FSC and nine other public financial institutions have been opened up to the private sector enterprises on June 9, 2020.(DESIGNATING DATA SPECIALIZING INSTITUTION) To ensure safety and security in the data convergence process, data specializing institutions will be designated in August 2020.IMPROVEMENTS TO CREDBDue to a rise in demand, the CreDB system needs to be improved to (a) make more types of data sets available, (b) improve server capacity to make deep learning and other types of more sophisticated data analysis possible and (c) make cross-convergence and analysis possible between the CreDB data and other types of nonfinancial data.(DATA SETS) Introduce insurance database (from July 1), user tailored database (from H2 2020) and educational database (from July 1) to be newly added to the CreDB(SERVER CAPACITY) Boost the current server capacity in H2 2020 to enable
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Jun 30, 2020

FSC Issues Suspension of Business Operation for Optimus Asset Management

The FSC decided to issue suspension of business operation for Optimus Asset Management on June 30 in order to protect investors and prevent vacuum in the fund management and operation amid recent disruptions due to ongoing probes related to alleged frauds.The suspension will be from June 30, 2020 until December 29, 2020, and Optimus Asset Management will be prohibited from engaging in collective investment business and other relevant businesses other than those considered to be necessary for investor protection or recognized by the financial authority.During the suspension period, the company executives will be removed from their duties and the designated administrators will take over their duties.* Please refer to the attached PDF for details.
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Jun 30, 2020

Government Seeks to Lower Risks in OTC Derivatives Market

The revisions to the Financial Investment Services and Capital Markets Act (FSCMA) were approved at a cabinet meeting on June 30, which aim to lower risks in the over-the-counter (OTC) derivatives market and improve regulations on asset management and crowdfunding. The revisions will be submitted to the National Assembly in July.KEY REVISIONSI. LOWERING RISKS IN OTC DERIVATIVES MARKET(REPORTING REQUIREMENTS) Financial Investment businesses, central clearing counterparties (CCPs) and corporations with more than a certain level of OTC derivatives transaction should report their transaction information to trade repository, or face a penalty of up to KRW100 million for violating reporting requirements.(LICENSING FOR TRADE REPOSITORY) Introduce a licensing system for trade repository, prohibit the use of the term ‘trade repository’ by unlicensed entities and establish guidelines for the qualification of executives and internal control standards.(SUPERVISION OF TRADE REPOSITORY) Trade repositories should get approval from the FSC when introducing new rules or making changes to their operational rules.(TRANSACTION INFORMATION) Trade repositories should provide transaction information to the financial authorities and disclose relevant statistical data.(MARGIN REQUIREMENTS FOR NON-CENTRALLY CLEARED OTC DERIVATIVES) Financial institutions with transaction balance of more than KRW3 trillion should exchange margins or face a penalty equivalent to the amount of profit generated by bypassing rules.II. IMPROVING REGULATIONS FOR ASSET MANAGEMENT CROWDFUNDING(PUBLICLY OFFERED FUNDS)(a) Establish a legal basis for the disclosure of information about fund managers, such as management experience, rate of return on funds under management, compensation scheme, etc.(b) Lower regulations on borrowing and lending for special asset funds, including investment on SOC to help improve the efficiency in the management of real asset funds(c) Allow variation in the distribution of profits and
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Jun 30, 2020

Vice Chairman Discusses Importance of Banks' Capital Buffers to Support Real Economy

Vice Chairman Sohn Byungdoo presided over the 10th financial risk assessment meeting on June 30 to assess the financial market conditions and monitor the progress in implementing the COVID-19 financial support.The following is a summary of Vice Chairman Sohn’s remarks.(COVID-19 FINANCIAL SUPPORT) As of June 26, about KRW56.4 trillion in financial support has been provided. Applications for the second phase support program for small merchants have become available at regional banks as well. Approximately KRW1 trillion in P-CBOs were issued on June 25 to support SMEs and major industries. Support from the key industry stabilization fund should be considered primarily as a backstop to the financial system rather than a bailout fund. As various support measures introduced at the beginning of this year are scheduled to expire in September, such as maturity extensions, deferments on interest payments and temporary deregulatory measures, the government will work with financial companies in deciding whether to further extend these support measures.(SOUNDNESS OF FINANCIAL INSTITUTIONS) Maintaining the soundness of financial institutions and providing support to the real economy are mutually reinforcing and complementary to each other. The IMF report released on June 25 also states that banks “should halt dividend payments and buybacks…to help support capital buffers.” Considering this, banks should continue to make lending available to support the real economy while enhancing capital buffers and loss absorbing capacity to prepare for a protracted pandemic situation.(HOUSING MARKET STABILIZATION MEASURES) The government has been working to prevent speculative demand in the housing market. As part of the follow-up measures, the issuance of mortgage loans for corporations will be restricted from July 1. In addition, to be eligible for mortgage loans in regulated areas, applicants should sell existing properties and move into new ones within six months. In order to ensur
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Jun 29, 2020

FSC Holds Financial MyData Forum & Info Session on Licensing Procedures

The FSC held a financial MyData forum on June 29 to facilitate discussions on the topic of “personal data meets finance and IT” and provide information about the licensing procedures for MyData businesses.Vice Chairman Sohn Byungdoo attended the forum and delivered congratulatory remarks. The following is a summary of Vice Chairman Sohn’s speech.Building infrastructure for MyData services can be seen as building waterways to facilitate smooth distribution of water. To ensure seamless operation of MyData businesses, the following four factors should be considered.(USER-CENTERED SERVICES) Consumer convenience should be improved by offering newly available financial services, such as personal credit or asset management services, while keeping in mind that data ownership remains with the consumer.(BUSINESS COMPATIBILITY AND EXPANDABILITY) ‘Open finance’ should be promoted through convergence of MyData with a variety of other old and new platforms.(RECIPROCITY AND FAIR COMPETITION) Free access to information should be promoted by financial companies, ICT firms and fintechs to improve consumer convenience. The government will work to foster an environment in which fair competition takes place with no regulatory arbitrage.(PROTECTION OF PERSONAL DATA) Personal data protection should be considered as a priority to ensure safety and security in the data industry.* Please refer to the attached PDF for details.
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Jun 29, 2020

FSC Seeks Revisions to Credit Business Act to Tighten Rules on Illegal Predatory Lending

The FSC introduced revisions to the Act on Registration of Credit Business and Protection of Finance Users to strengthen rules on illegal predatory lending on June 26. The proposed revisions are a follow-up measure to the government’s plans to combat loan sharking announced earlier.KEY REVISIONS(a) The term “unregistered credit service providers” and “unregistered loan brokers” will be changed to “unlawful private loan service providers” and “unlawful private loan brokers,” respectively.(b) The maximum annual interest rate charged by “unlawful private loan service providers” will be limited to six percent, and the re-issuance of loans in larger amounts with accrued interest as well as loan contracts without authentic documentation will be invalidated.(c) In order to prevent online brokerage activities that attempt to bypass regulations, more specific definitions will be applied to private loan businesses and private loan brokerage services.(d) The maximum penalty for unlawful private loan service providers and brokers will be increased from KRW50 million to KRW100 million. For false and/or exaggerative advertisements, penalty will be increased to up to three years of imprisonment or KRW100 million.(e) Consumer safeguards will be strengthened for private loan users by introducing more rigid requirements for document keeping and returning.The revisions will be finalized and submitted to the National Assembly after a 40-day promulgation period.* Please refer to the attached PDF for details.
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Jun 29, 2020

Early Implementation of Basel III Credit Risk Framework

The financial authorities announced that fifteen banks and eight bank holding companies will begin to gradually implement Basel III credit risk framework from the end of June 2020. IMPLEMENTATION SCHEDULEDomestic banks and bank holding companies were asked to notify the authorities by the end of May their preferred date to begin the implementation. A total of fifteen banks and eight bank holding companies applied for the early implementation as shown below and the financial authorities approved their implementation schedule.Standard Chartered Korea, Kakao Bank and K Bank will begin to implement Basel III credit risk framework beginning in January 2023.EXPECTATIONThe early implementation of Basel III credit risk framework is expected to boost the capital adequacy ratio of domestic banks and bank holding companies. The government expects that the increased capital adequacy ratio at banks will help make available more funding sources to finance and support the real economy.* Please refer to the attached PDF for details.
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Jun 25, 2020

Personal Debt Purchase Program to Begin June 29

Vice Chairman Sohn Byungdoo attended the launching of the Korea Asset Management Corporation’s personal debt purchase program on June 25 and spoke about the importance of inclusive finance.KAMCO, lending institutions and other relevant institutions signed a memorandum of agreement. Under the agreement, lending institutions may sell non-collateralized delinquent personal debt to KAMCO, which in turn will take over individual debt and help debtors with debt adjustment plans.KAMCO’s personal debt purchase program begins on June 29 for the initial duration of one year with the possibility of extending thereafter.The following is a summary of Vice Chairman Sohn’s remarks.With the government’s KRW175 trillion-plus financial support programs have helped to ease problems of market instability and liquidity shortage. However, widening income gap in the society needs to be closely watched. Job losses and business closures have created extra burdens for many individuals, while asset prices are also showing signs of instability in the property and stock markets. The delinquency rate in household debt has not increased, but the rising trend in household debt needs to be watched carefully.The agreement signed by KAMCO and financial institutions today is aimed at providing assistance to the most vulnerable debtors. The government introduced on April 29 a deferment of loan repayment program for individual debtors who are incapable of servicing debt due to the pandemic-related reasons. For delinquent debtors, KAMCO will take over individual debt from lending institutions and help with debt adjustment. To help establish a more appropriate relationship between lending institutions and debtors, the government will work on introducing a bill aimed at protecting debtors’ rights and preventing excessive debt collection methods.* Please refer to the attached PDF for details.
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Jun 24, 2020

Government Unveils Plans to Root Out Vishing

The government unveiled its plans to root out vishing (or voice phishing) scams through close coordination between the financial, communications and investigative authorities on June 24.BACKGROUNDThe government has been pursuing policies to promote inclusive finance and human security along with innovation-led growth. The advancement in digital technologies has led to a rise in vishing scams using new and more sophisticated tricks and technologies. With the widespread usage of smartphones, illegitimate use of burner phones and apps has been on the rise as well. Vishing is a crime that brings ruin to families and undermines trust in our financial and telecommunications systems. With more sophisticated tricks and tools, it requires strong, comprehensive and persistent responses from the government.KEY MEASURESThe government-wide collaboration in finance, communication and investigation will help strengthen vishing prevention measures from prevention to detection to punishment and in terms of assisting victims and raising public awareness.I. DEVELOP COMPREHENSIVE PREVENTION SYSTEM- Prevent the use of mobile phones in vishing scams- Require financial companies to adopt Fraud Detection System (FDS) to closely monitor suspicious transactions linked to vishing, and have them utilize big data and AI to share information with relevant public institutions- Strengthen duties and responsibilities of financial companies and telecommunications service providers in preventing vishing scams- Prepare plans to improve the personal authentication and ID verification system in the third quarter- Implement pilot projects and RD to develop new digital technologies to be applied in vishing preventionII. BOLSTER CRACKDOWN PENALTY- Strengthen crackdowns on financial scams including vishing: (a) set up close cooperation network with overseas investigative authorities while increasing crackdowns on smishing and other newly emerging types of fraud- Make statutory punishment on vishing more sev
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Jun 24, 2020

FSC Changes Rules on Liquid Asset Requirements for Repo Transactions

The FSC revised the regulations on financial investment business on June 24, laying out specific liquid asset requirements for the sellers of repurchase agreements.The FSC has been pursuing changes in regulations to improve the effectiveness and soundness of the repurchase agreement (repo) market. The revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act in December last year introduced a legal basis to require repo sellers (borrowers) to hold liquid assets. The changes in regulations adopted today are a follow-up measure, establishing the specific scope of liquid assets as well as holding requirements.SCOPE OF LIQUID ASSETSLiquid assets include cash, savings accounts, certificates of deposit, liquid loan commitments, readily disposable deposits of securities companies, up to 30 percent of money market trust (MMT) and money market wrap (MMW), promissory notes, payment reserves of the Bank of Korea. Liquid assets in foreign currencies also qualify.LIQUID ASSET HOLDING REQUIREMENTSThe requirements for liquid asset holding for repo sellers (borrowers) will gradually increase in three stages as shown in the table below from up to one percent of the transaction amount in July to up to ten percent between August 2020 and April 2021, and then to up to twenty percent thereafter.The above changes in regulations will go into effect on July 1, 2020 along with the improved rules on minimum margin requirements for repo buyers (lenders).* Please refer to the attached PDF for details.
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Jun 24, 2020

FSC Identifies D-SIBs for 2021

The FSC identified a total of ten bank holding companies and banks as domestic systemically important banks (D-SIBs) for 2021 as follows: Shinhan Financial Group, Hana Financial Group, KB Financial Group, Woori Financial Group, NH Financial Group, Shinhan Bank, Woori Bank, KEB Hana Bank, KB Kookmin Bank and NH Bank. Compared to the previous year, Jeju Bank from Shinhan Financial Group will be removed from the D-SIB list pursuant to the temporary easing of financial regulations announced on April 17, which excludes smaller sized regional banks from the D-SIB designation and relieves them from the duty of additional capital surcharge.Those identified as D-SIBs will be required to set aside an additional capital surcharge of 1% in 2021.* Please refer to the attached PDF for details.
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Jun 23, 2020

FSC Chairman Highlights Importance of Building Mutual Trust between Start-ups and Investors

FSC Chairman Eun Sung-soo attended the global start-up conference NextRise 2020 on June 23 in Seoul, and delivered congratulatory remarks. During his speech, Chairman Eun explained the government’s policy to promote innovation in financial services while encouraging start-up entrepreneurs.The following is a summary of Chairman Eun’s remarks.(START-UP ENVIRONMENT) Despite unexpected difficulties and uncertainties caused by the COVID-19, the changing economic conditions provide challenges as well as new opportunities. We may be able to seize new opportunities if we are well prepared for the post-pandemic world and changing global economic conditions.(INNOVATION IN FINANCIAL SERVICES) The government is pursuing diverse strategies to change our economy from a ‘chaser’ to a ‘leader.’ In finance, the government will focus on promoting innovative financial services to help support companies. Working with other ministries, the FSC will select about 200 innovative firms to provide targeted financial assistance. To support innovative firms at their growth stage, the government will work to expand the scale-up fund from KRW8 trillion to KRW15 trillion by 2022. To promote crowdfunding as an important financing channel for start-ups, the government will allow start-ups as well as SMEs to issue securities to raise funds and expand the annual issuance cap from KRW1.5 billion to KRW3 billion. The government-backed start-up incubating center Mapo Front1 will become operational next month. During the second half of this year, the government will work on improving the business credit evaluation system.(BUILDING MUTUAL TRUST) Aside from government policies, building mutual trust is important between businesses and investors. Innovative ideas and technological prowess should earn trust from investors. Similarly, investors and lending institutions should build trust from the market through transparent management of capital.* Please refer to the attached PDF for details.
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Jun 23, 2020

Government to Stamp Out Illegal Predatory Lending

The government discussed ways root out illegal predatory lending at a meeting on anti-corruption policy led by President Moon Jae-in on June 22. The FSC and other relevant ministries have drawn up a joint framework for combating loan sharking, specifically focusing on the following key policy areas. The government-wide task force will regularly monitor developments and work on improvements.(PREVENT ILLEGAL SALES ACTIVITIES) Set up a rapid alert system for both online and offline illegal predatory loan advertisements(ENHANCE CRACKDOWNS) Enhance monitoring and detection of sophisticated sales activities, including online and offline illegal advertisements, suspicious reports filed at the FSS and criminal investigation cases led by law enforcement agencies(ASSIST VICTIMS PREVENT RECURRENCE) Provide comprehensive and tailored supports to victims of loan sharking in the form of financial, legal, welfare and employment assistance to help them recover(RAISE PUBLIC AWARENESS) Provide information to the public about the widely used tactics and harmful effects of loan sharks, how to report illegal activities to authorities as well as the availability of government-backed microloan productsThe FSC will soon announce a revision bill to the Credit Business Act to bar profit making from illegal loan sharking activities and push for the enactment of more punitive penalties.* Please refer to the attached PDF for details.
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Jun 23, 2020

Vice Chairman Stresses Importance of Balanced Approach to Support Real Economy Sectors

Vice Chairman Sohn Byungdoo presided over the 9th financial risk assessment meeting on June 23 to assess the financial market conditions and check the implementation status of the COVID-19 financial support.The following is a summary of Vice Chairman Sohn’s remarks.(INTERIM ASSESSMENT ON COVID-19 FINANCIAL SUPPORT) The first- and second-stage financial support programs for small merchants and SMEs provided timely financial support to the businesses in need. Out of the KRW135 trillion-plus package, about KRW54.2 trillion has been provided so far. For SMEs and middle market enterprises facing temporary setbacks in liquidity, policy banks have made available about KRW29.1 trillion worth of special loans and guarantees. The government’s market stabilizing measures, such as the bond market and stock market stabilization funds and the corporate bond and CP purchase program have provided backstops to the financial markets. Meanwhile, businesses with unfavorable credit backgrounds are unable to fully take advantage of the financial support being provided. In this regard, the government has been focusing on and will continue to work on filling the gaps by introducing measures specifically intended to help businesses with low credit records.(WELL-BALANCED POLICY APPROACH) With high levels of uncertainties in the global economy, it is necessary to pursue a well-balanced approach between maintaining the soundness of financial institutions and supporting the real economy. Although banks have been able to maintain their financial soundness, they need to boost their loss absorbing capacity through close monitoring and accumulation of loan-loss provisions in preparation for a prolonged pandemic situation.For securities firms, the government will adjust regulations on their short-term borrowing from call money market in response to market developments. To ease their liquidity shortage, the government temporarily raised the average monthly limit on call market loans by securities
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Jun 22, 2020

Vice Chairman Holds Talks on Improving Rules on Accounting and Auditing

Vice Chairman Sohn Byungdoo held a meeting on improving rules on accounting and auditing on June 22. With some of the key changes going into effect this year, Vice Chairman Sohn emphasized that it is important to maintain close communication with market players while continuing to pursue reform initiatives.The FSC has prepared the following improvements in close consultation with the relevant industry officials.(APPOINTMENT OF SFC DESIGNATED AUDITOR) Remove redundancy in the list of companies that are required to appoint auditors designated by the Securities and Futures Commission by making changes to the current regulation (Sep. 2020)(STANDARD AUDIT TIME) Introduce a clearer standard on the appropriate time period required for audit and establish rules on voting procedures where a simple majority system will be applied with two-thirds of audit committee members required to be present (Dec. 2020)(AUDIT COMMITTEE) While adhering to the principle of independence in appointing an auditor, reduce the minimum quorum for audit committee from seven to five and allow non-board members of lending institutions to be included on the committee (Sep. 2020)(INTERNAL ACCOUNTING MANAGEMENT SYSTEM) Establish an internal audit roadmap to help remove market uncertainties (Dec. 2020)The FSC will also work on improvements to the auditor designation system to promote competition based on audit quality.* Please refer to the attached PDF for details.
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