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Mar 12, 2020
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Mar 12, 2020
- Vice Chairman Holds Meeting to Assess Progress of COVID-19 Financing Support
- FSC Vice Chairman Sohn Byungdoo convened a meeting on March 12, 2020 to assess the implementation of the financing support for the SMEs and small merchants hit by the COVID-19 outbreak.PROGRESSBetween February 7 and March 10, a total of KRW4.6346 trillion (60,813 individual cases) in loans and guarantees as well as loan and guarantee extensions were provided to the SMEs, small merchants and self-employed business owners whose businesses have been hit by the spread of COVID-19► Financing by type: KRW 2.0633 trillion (32,309 cases) in new loans, KRW 2.406 trillion (25,393 cases) in maturity extensions and deferred payments, and KRW 165.3 billion (3,111 cases) in export-import credit finance, discounted interest rates and late fees and deferment of interest payment► Financing by industry: KRW703.9 billion to wholesale businesses, KRW499.8 billion to restaurant businesses and KRW485.3 billion to retail businesses► Financing by provider: KRW2.7892 trillion (42,693 cases) by policy banks, KRW1.8454 trillion (18,120 cases) by private financial institutions FURTHER PLANSThe FSC will work to maintain stability in the financial system amid the spread of COVID-19. As for call centers, the group training will be refrained. While continuing to improve the business continuity plans, the government will encourage financial institutions to draw up additional response plans to help contain the spread of COVID-19.* Please refer to the attached PDF for details.
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Mar 11, 2020
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Mar 11, 2020
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Mar 10, 2020
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Mar 10, 2020
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Mar 06, 2020
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Mar 05, 2020
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Mar 05, 2020
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Mar 04, 2020
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Mar 04, 2020
- FSC Plans to Introduce Consumer Credit Bill to Enhance Financial Inclusiveness
- The FSC announced on March 3, 2020 its plans to draft a bill on consumer credit and push for the enactment of the legislation within this year in order to enhance financial inclusiveness.The new legislation will replace the current Act on Registration of Credit Business, etc. and Protection of Finance Users. It will take essential provisions on the contents and procedures of loan contracts from the Credit Business Act, while establishing new regulations on delinquent debt management, termination of contracts, etc.BACKGROUNDUnder the current personal debt management system, it is extremely difficult for delinquent debtors to recover on their own while facing a risk of turning into long-term delinquent debtors.► Only about 14,000~17,000 delinquent debtors out of 26,000~28,000 every year are found to seek personal debt restructuring programs while many choose not to.► The burden of arrears and repayments as well as the pressure of debt collection cause disruptions and distress to daily lives.► The debt collection process heavily focuses on the performance of debt collection while overlooking issues related to consumer trust.KEY PROVISIONSThe improvement will focus on providing more safeguards for debtors and providing more chances to get back on their feet by modifying the structure that currently tolerates excessive debt collection practices.The government will work to establish a legal principle for a balanced approach to debt collection that takes into account not only debt collection performance but also consumer trust.I. PROVIDE TAILORED SUPPORT TO DEBTORS FOCUSING ON THEIR NEEDSEstablish a new debtors’ right through which they can request debt restructuring from financial institutions, which will help them find ways to get back on their feet and resume normal economic activities.► Delinquent debtors will have an option to request a debt restructuring program when facing diminished debt servicing capacity. Upon such a request, financial institutions will
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Mar 03, 2020
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Mar 03, 2020
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Feb 28, 2020
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Feb 28, 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 27, 2020
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Feb 26, 2020
- Government Supports Smooth Operation of Corporate AGMs amid COVID-19 Spread
- The government announced supportive measures on February 26, 2020 to ensure the safe and smooth operation of companies’ annual general meetings (AGMs) as the spread of COVID-19 may delay the submission of financial statements, audit and annual reports by some companies operating subsidiaries in China.Under the Financial Investment Services and Capital Markets Act and the External Audit Act, listed companies are required to submit (i) a financial statement to auditors no later than six weeks before the AGM; (ii) an audit report a week before the AGM; and (iii) an annual report within 90 days after the end of each fiscal year. If companies miss such deadlines, they may face administrative sanctions or penalties.Given that the outbreak of COVID-19 is an unexpected and unavoidable event for both companies and auditors, the Securities and Futures Commission (SFC) will grant an exemption from administrative sanctions for companies and auditors who satisfy the following conditions: (i) A company’s fiscal year ending on December 31, 2019; (ii) A company or an auditor must satisfy one of the followings:- COMPANY whose main operations (including subsidiaries) are based or conducted in China or domestic locations designated as “COVID-19 affected areas;” and whose financial statements or external audits were delayed by the outbreak of COVID-19 or disinfection measures- AUDITOR cannot complete an external audit for the fiscal year of 2019 due to the outbreak of COVID-19 or disinfection measures, such as closure of auditor’s office, etc. (iii) A company or an auditor is under ineluctable circumstances equivalent to (i), (ii). Companies or auditors should submit applications to the Financial Supervisory Service (FSS) or the Korean Institute of Certified Public Accountants (KICPA) from February 28 to March 18 to qualify for an exemption from administrative sanctions.The FSS and the KICPA will submit their reviews of application to the SFC, scheduled to be held at the end
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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 24, 2020