FSC works to ensure that finance plays a key role in developing innovative businesses and supporting the real economy, thereby fueling Korea’s more vibrant economic growth. Promoting advanced financial industry, stable financial markets, fair market order and reliable consumer protection are among FSC’s key policy agenda. Digital transformation and big data are increasingly playing larger roles in various aspects of financial services. In the era of 4th industrial revolution and digital economy, finance will help boost growth potential and create jobs as the government seeks to advance its Digital New Deal policy.
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Mar 05, 2020
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Mar 03, 2020
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Feb 27, 2020
- Financial Policy Plans to Support Innovative Start-ups & SMEs
- The FSC outlined this year’s policy plans to support Korea’s innovation-led growth on February 26, 2020, as a follow-up to the 2020 work plan announced on February 17. The plans are intended to provide innovative start-ups and SMEs with financing support.KEY PLANSI. TARGETED SUPPORT TO 1,000 INNOVATIVE FIRMSThe government will select more than 1,000 innovative companies and provide KRW40 trillion in loans, investment and guarantees.▪ SELECTIONCandidates will be selected upon recommendations by economic ministries, financial companies and venture capitalists. A consultative body of policy banks will review candidates and select 1,000 companies based on their innovativeness of business.▪ FINANCIAL SUPPORTThose selected will be provided with KRW40 trillion over three years: KRW15 trillion in loans, KRW15 trillion in investment and KRW10 trillion in loan guarantees.▪ INNOVATIVE FIRMS WITH GLOBAL COMPETITIVENESSAmong 1,000 firms, 30 or more companies showing growth potential for global markets will be selected and provided with assistance to attract private investments from domestic and overseas venture capitalists.II. Introduction of Business Credit Scoring System Modeled after PaydexThe government plans to develop a business credit scoring system modeled after Paydex. The new system is designed to use companies’ non-financial business transaction information to determine their credit scores, thus offering companies a complementary channel to raise funds.▪ DEVELOPMENT PLANa) Set up a database of business transactions through collection of data from the Korea Credit Guarantee Fund and from external institutions, such as the Korea Financial Telecommunications Clearings Institute and the Korea Employment Information Serviceb) Produce business credit scores using the business transactions database after reviewing payment histories, business activities and payment capabilities of companiesc) Provide business credit scores to banks for the development of new gua
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Feb 26, 2020
- Fintech and Digital Finance Policy for 2020
- The Financial Services Commission announced on February 25, 2020 its key policy plans for fintech and digital finance, which include advancing digital finance, promoting data economy, cultivating new fintech industry and services, working on regulatory reform in fintech and digital sectors, and strengthening the foundation for innovation.KEY POLICYI. ADVANCING DIGITAL FINANCEIn order to ensure long-lasting innovation and stability in the financial sectors, the government will work to promote innovation in digital finance and establish a digital risk management system.A) Improve digital finance’s infrastructure, industry and market► Open banking: a) expand functions and scale by allowing participation by mutual finance and financial investment businesses, and work on measures to enhance security and safety of financial consumers; b) push for the enactment of a legislative provision (Electronic Financial Transactions Act) that requires banks to provide their money transfer function through open API► Electronic financial businesses: introduce MyPayment and integrated payment businesses to promote the development of financial platforms offering a variety of services, while promoting innovation in personal authentication services, such as biometric authentication► Consumer protection: bring up the level of safeguards and protections for digital finance users on a par with advanced economiesB) Maintain appropriate balance between innovation and stability by strengthening the management and supervision of digital risks► Financial data security: establish principles to properly respond to new types of digital security risks by requiring internal risk control mechanisms in financial companies, operating a public-private joint risk management framework and bolstering response mechanisms for the incident response team► Risk management for third party: strengthen security management for IT outsourcing and set up a risk monitoring system using regtech for possible ri
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Feb 17, 2020
- 2020 Work Plan Focuses on Financial Innovation to Support Innovative Businesses
- The Financial Services Commission along with other economic ministries presented the 2020 Work Plan on February 17, 2020. The FSC has outlined 10 key policy tasks for this year, which include a) redirecting capital flow toward SMEs and start-ups with innovative technologies and future growth potential, b) working on bold reforms in financial regulations while fostering convergence between new technologies and finance, and c) promoting inclusive finance and establishing a reliable financial safety net to support a comeback for those who have been discouraged by failed business attempts.The following are some of the key achievements so far in the areas of financial innovation.► Outstanding balance of movable asset lending by local banks doubled from KRW800 billion at the end of 2018 to KRW1.6 trillion by the end of 2019.► Outstanding balance of loans to SMEs by local banks increased from KRW610 trillion at the end of 2016 to KRW747 trillion by the end of 2019.► Number of newly listed companies on the KOSDAQ market rose from 82 to 108 between 2016 and 2019.2020 FINANCIAL POLICY TASKS1. REDIRECT CAPITAL FLOW TOWARD BUSINESSES FROM HOUSEHOLDS REAL ESTATES► Prevent capital concentration in the real estate market and introduce a new loan-to-deposit ratio which will encourage more corporate lending by financial companies.2. PROVIDE TARGETED SUPPORT TO 1,000 INNOVATIVE FIRMS► Select 1,000 innovative firms through a government-wide cooperation with other ministries and provide both financial and non-financial assistance in the amount of KRW40 trillion.3. ALLOW DIVERSE TYPES OF ASSETS TO BE USED AS COLLATERAL► Push for a revision of the Act on Security over Movable Property, Claims, etc. to introduce a lump-sum collateral system through which companies are able to collateralize a diverse set of assets including machinery, raw materials and inventory, and set up a movable collateral registry which will help collect collaterals and non-performing loans on behalf of f
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Jan 16, 2020
- FSC Tightens Housing Loan Rules
- The FSC unveiled measures to tighten housing loan rules, which will take effect on January 20, 2020.For high-priced homeowners whose property value is over KRW900 million, loan guarantees for jeonse1 will no longer be offered by Seoul Guarantee Insurance Company (SGI). The restriction on jeonse loan guarantees by public guarantee institutions, such as Korea Housing Finance Corporation (KHFC) and Korea Housing Urban Guarantee Corporation (HUG), has already been in place since November 11, 2019, pursuant to the measures unveiled on October 1, 2019.For individuals who receive jeonse loan guarantees from KHFC, HUG or SGI and purchase a high-priced home or become a multiple homeowner thereafter, the said jeonse loan will be collected.* Please refer to the attached PDF for details.
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Jan 09, 2020
- Joint Response Unit on Financial Markets Holds First Meeting
- FSC Vice Chairman Sohn Byungdoo presided over the first meeting of the joint response unit on financial markets on January 9, 2020 to assess the impact of the recent Middle East instability on domestic financial markets. The officials from the relevant ministries and public institutions as well as private sector experts attended the meeting.The following is a summary of Vice Chairman Sohn’s keynote address:BACKGROUNDThe escalating conflict between the US and Iran has led to increased financial market volatilities both at home and abroad. Following President Donald Trump’s announcement not to seek further military action against Iran, the US stock market closed higher yesterday with Dow Jones adding 0.56% and SP500 gaining 0.49%. However, there are lingering uncertainties and the government has been preparing contingency plans considering all possible scenarios.On January 8, the government set up a joint response system in order to more systematically respond to situations. Today’s meeting on financial markets is one of the five thematically organized units.1DOMESTIC FINANCIAL MARKETSThe domestic financial markets have fluctuated recently2 against the backdrop of the US-China first phase trade agreement and the recent instability in the Middle East. Despite increased market volatilities following the uncertainty in the Middle East, it is necessary to remain calm and prudent.Korea’s external soundness remains solid as the net foreign assets in debt instruments (USD 479.8 billion) and the foreign exchange reserves (USD 408.8 billion) posted record highs in 2019. Given a low level of Iranian funds in domestic stock markets, the possibility of capital flight or damages to the financial soundness1 Five joint response units: financial markets, international oil prices, real economy, overseas construction and overseas logistics2 KOSPI: Jan. 6 (2,155.1, -0.98%) → Jan. 7 (2,175.5, +0.95%) → Jan. 8 (2,151.3, -1.11%)USD/KRW FX rate: January 6. (1,172.1, +5.0 won)
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Dec 23, 2019
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Dec 04, 2019
- Measures to Promote Fintech Scale-ups
- The FSC announced measures to promote fintech scale-ups on December 4, which includes 24 key tasks in 8 different policy areas.BACKGROUNDThe government has been promoting the fintech industry as part of its innovation-led growth strategy amid digital transformation and the 4th industrial revolution. To this end, the government has introduced a financial regulatory sandbox, open banking, regulatory reforms and budget earmarks for fintech. In order to further develop Korea’s fintech industry and its ecosystem, the government plans to implement the following fintech scale-up strategies, which builds upon the progress made so far.KEY MEASURESI. IMPROVING THE CURRENT REGULATORY SANDBOX SYSTEM► Designate more than 100 ‘innovative financial services’ by the end of March 2020, which marks the one-year anniversary of launching the regulatory sandbox► Improve rules and practices in operating the regulatory sandbox: (i) protect innovative ideas and technologies through patents and intellectual property rights (e.g. providing legal counsel or expediting patent dispute resolution); (ii) impose a minimum level of additional requirements on ‘innovative financial services;’ and (iii) grant continuation of designation status through MA► Provide continuous support (e.g. costs on testing, security inspection, office space, etc.) for the entire cycle from designation of ‘innovative financial services’ to commercialization of innovative financial solutions.► Set up a supervisory framework tailored to the promotion of fintech firms – e.g. conducting supervision and inspection aimed at providing counseling or establishing regulatory grounds to grant fintech firms immunity in case of minor violations.II. PERFORMING REGULATORY REFORMS TO FACILITATE FINTECH DEVELOPMENT► Promote a flexible and dynamic regulatory environment where testing of ‘innovative financial services’ can lead to commercialization and ultimately to an improvement in regulatory reforms.► Con
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Nov 11, 2019
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Mar 21, 2019
- Financial Policy Plans to Support Innovation-led Growth
- The FSC announced financial policy plans to support Korea’s innovation-led economic growth. At a proclamation ceremony, President Moon Jae-in said further growth of innovative start-ups in Korea are held back by banks’ lending practice, still centered on real estate collateral and financial records, resulting in a “financial divide” between large businesses and start-ups. That requires finance to play a more active role in funding innovation and sharing risk. FSC Chairman Choi JongKu laid out a comprehensive policy scheme to create a financial ecosystem for innovation-led growth.I. Overhaul bank’s corporate loan approval systemBanks’ corporate loan approval system will be overhauled to help start-ups - often with limited collateral - secure loans using their innovative ideas, technology and other various assets as collateral. Under the new loan approval system, the FSC aims to enable innovative start-ups and SMEs to secure loans worth KRW100 trillion over the next three year.► A new collateral scheme will be introduced1 in which corporate borrowers are allowed to combine various assets including patent, production equipment and inventories as a single package of collateral.► A comprehensive evaluation model which assesses the potential value of a company’s technology as well as creditworthiness will be introduced as early as 2020.II. Capital market reformsThe FSC will help innovative start-ups raise funds based on their growth potential. By easing listing requirements, the FSC aims for Kosdaq listings of 80 companies in high-growth, high-tech sectors including biotech over the next three years.► The government aims to raise KRW15 trillion over the next five years with public and private investments to support scale-ups in new-growth sectors such as future vehicles, bio-health and fintech.► The FSC will expand a pool of venture capital with regulatory reforms for private equity funds (PEFs), securities firms and professional investors.2► Kosda
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Mar 07, 2019
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Jan 16, 2019
- Fintech Policy Direction for 2019
- FSC Chairman Choi JongKu outlined the FSC’s policy priorities for fintech innovation in 2019 at a meeting with fintech entrepreneurs, executives of financial institutions and investors. Chairman Choi said this year would be an opportune time for Korea’s fintech industry to take a step forward, as the groundwork for regulatory, budgetary and institutional support has been laid down. “The FSC will spare no effort to support fintech companies to come with globally competitive services and spread fintech innovation across the financial sector,” said Chairman Choi.Financial Regulatory SandboxThe financial regulatory sandbox, scheduled to be launched in April 2019, will allow fintech companies to test their innovative services with regulatory exemptions for a certain period of time. Preliminary applications for participation will be open in the end of January. The FSC will provide KRW4 billion to support the regulatory sandbox program.Investment in FintechThe FSC will remove regulatory uncertainty that restricts financial companies from investing in fintech companies. In principle, financial companies are prohibited from investing in non-financial companies, except ones closely related to financial services. Currently, financial companies are allowed to invest in fintech companies, based on the FSC’s legal interpretation that fintech falls into a category of businesses closely related financial services. To facilitate investment in fintech, the FSC will amend relevant regulations for clarification on the scope of business in which financial companies are allowed to invest. The FSC will also boost investments by venture capital and PEFs in fintech.Financial Regulatory ReformThe FSC will overhaul formal and informal regulations that hinder fintech innovation. Currently, more than 200 regulations are under review for regulatory reforms. The result of reviews will be announced in the first quarter of 2019. The FSC will also hold a weekly meeting with fintech busines
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Dec 11, 2018
- Financial Innovation Support Act Passed in the National Assembly
- National Assembly passed a legislation called the Financial Innovation Support Act on December 7, 2018. The bill, which will take effect in March 2019, is intended to lay the legal foundation to introduce a regulatory sandbox for innovative financial services, where fintech firms are allowed to test their new services with regulatory exemptions for a certain period of time.Under the new legislation, fintech firms or financial institutions may apply for participation in the regulatory sandbox with financial services acknowledged as differentiated from existing services in its content, method and form.A review committee will be established under the FSC with financial officials and experts in technology, finance, laws and consumer rights to review applications and designate an “innovative service” provider.The designated service providers are allowed to test their new services for a maximum two years in an environment where certain regulations are to be exempted. If there is a concern about irreversible damage to consumers or undermining financial stability, regulatory exemptions should not be allowed.Those who apply for designation of innovative financial service provider are required to submit their plans for consumer protection and risk management. Only those who have sufficient measures to protect consumers are to be accepted to the regulatory sandbox.In a lawsuit against an innovative financial service provider, the burden of proof falls on the business provider to prove that there was no intention or negligence for damages.* Please refer to the attached PDF for details.
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Nov 01, 2018
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May 09, 2018
- Progress in Financial Reform and Policy Tasks Ahead
- FSC Chairman Choi JongKu held a press conference on May 9 to brief on progress the FSC has made in its financial reform initiatives and explain financial policy tasks ahead, on the occasion of the first anniversary of the Moon Jae-in administration.PROGRESS IN FINANCIAL REFORMIn line with the government’s policy agenda, the FSC pushed forward financial reform initiatives to achieve four major policy goals:• Enhancing trust of investors and consumers in the financial sector- The FSC outlined its plan to introduce a comprehensive supervisory framework for financial conglomerates, reflecting global supervisory principles intended to capture and manage a full spectrum of their group-wide risks.- The FSC proposed amendments to the Act on Corporate Governance of Financial Companies to address problems found in the actual practice of implementing corporate governance rules in financial companies.• Supporting the innovation-led growth of the Korean economy- A state-funded venture capital, Innovation Venture Fund, was launched in March, aiming to raise KRW 10 trillion of public and private capital over the next 3 years to finance innovative start-ups at each stage of their business cycle.- In April, the FSC completely banned the practice of requiring joint guarantee in public financial institutions, with which entrepreneurs had been burdened when making loans to start business.- Kosaq Venture Fund has attracted KRW 2.1 trillion since it was first launched in April to boost investment into Kosdaq-listed companies, as part of the FSC’s plan for vitalizing the Kosdaq market.• Expanding financial inclusion to better protect financial consumers- The FSC has written off KRW 33 trillion in long-overdue, small debt owed by financially marginalized borrowers to relieve their debt burden, helping them make a fresh start.- The FSC reduced the burden of financial cost for financial consumers by lowering statutory ceilings on interest rate, interest penalties on overdue loans a
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Jan 15, 2018
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Jul 26, 2017
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Jan 05, 2017
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Feb 02, 2016
