Press Releases - Financial Services Commission

Press Releases

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Jun 02, 2020

FSC to Work on Turning Crisis Situation into Opportunity for Digital Innovation

FSC Vice Chairman Sohn Byungdoo held the 6th financial risk assessment meeting on June 2 to review the current status of the COVID-19 financial support for businesses and households.The following is a summary of Vice Chairman’s remarks.(CURRENT SITUATION) The financial markets have largely stabilized due to the measures taken by the government. However, there still remain risk factors, and the government will continue to closely monitor markets while implementing its market stabilization measures. As decided on May 28 and 29, the government will promptly provide support to businesses through quick corporate bond underwriting program and issuance of P-CBOs, while providing liquidity to help businesses maintain their competitiveness. The government will also expedite the preparation for the effective operation of the key industry stabilization fund and special purpose vehicle to help most heavily affected industries as well as businesses with lower-rated bonds and CP.(COVID-19 SUPPORT) The provision of the second phase financial support for small merchants has been effective, as the availability of untact application system helped minimize bottleneck effects. The government will also closely monitor trends in individual debtors although the number of debtors with overdue payments of five to 89 days or more than 90 days has been in decline.(2020 KOREA FINTECH WEEK) Korea’s second global fintech expo held virtually from May 28 has provided opportunities to develop strategies on fintech and digital finance. Participation from more than 150 businesses showcasing their innovative products and services has helped to advance our ‘untact’ capabilities. The government will work to turn this pandemic-induced situation into an opportunity for digital innovation.FINANCIAL SUPPORT PROVIDEDAs of May 29, a total of KRW117.3 trillion (1.42 million cases) in loans and guarantees as well as loan and guarantee extensions were provided to the SMEs and small-scale businesses that
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May 28, 2020

FSC Designates 4 More Financial Solutions as 'Innovative Financial Services'

The FSC added four more financial solutions to the financial regulatory sandbox on May 27, bringing the total number of ‘innovative financial services’ to 106 since launching the financial regulatory sandbox program on April 1, 2019.CHAIRMAN’S REMARKSChairman Eun Sung-soo stated that the regulatory sandbox has made positive changes in the financial sectors since its inception. It has (a) brought more rapid, convenient and affordable financial services for consumers, (b) introduced new and innovative ways of raising capital for small merchants, and (c) accelerated digital transformation for the entire financial industry. In order to prepare for a post-COVID-19 era, the government is pursuing a ‘digital new deal,’ and the sandbox program is essential as it provides a testing ground for digital transformation.In order to more effectively operate the sandbox program, the FSC will (a) focus on testing new digital technologies, such as big data and AI, (b) seek changes in regulations for untact digital services as soon as their safety and security performances are verified, (c) work to extend the regulatory exemption period for fintechs and start-ups, (d) enhance the autonomy of the designated innovative financial services, and (e) provide support to fintech firms with their scale-up and overseas expansion opportunities.OVERVIEW OF NEWLY ADDED ‘INNOVATIVE FINANCIAL SERVICES’1. An untact personal authentication service based on blockchain technologies allowing customers to issue and save their digital certificates for real-name verification purpose (SK Telecom, expected launch in June 2021)2. An untact personal authentication platform that provides customers’ real name verification information for all savings banks using a joint savings bank mobile app (Korea Federation of Savings Banks, expected launch in December 2020)3. An untact personal authentication service using facial recognition technologies (DGB Daegu Bank, expected launch in May 2021)4. A mobile
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May 28, 2020

FSC Chairman Highlights Importance of Timing and Sufficient Provision of Support for Key Industries

FSC Chairman Eun Sung-soo delivered congratulatory remarks at a launch event of the key industry stabilization fund on May 28.Chairman Eun stated that swift measures taken by the government and the National Assembly made it possible for today’s launching of the KRW40 trillion key industry stabilization fund.With regard to the management of the fund, Chairman Eun spoke about the importance of timing and sufficient provision of support to the businesses in need in order to help protect jobs.To ensure an effective operation of the fund, Chairman Eun urged strong cooperation from banks and other relevant institutions.* Please refer to the attached PDF for details.
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May 28, 2020

FSC Chairman Speaks on Fintech Innovation as Part of Post-COVID-19 Strategy

FSC Chairman Eun Sung-soo delivered welcoming remarks during the opening session of the 2020 Korea Fintech Week held virtually from May 28.SUMMARY OF CHAIRMAN’S SPEECHThe 2020 Korea Fintech Week will provide opportunities for experiencing connectivity, convergence, openness and innovation in the financial sector based on digital finance and big data. In order to prepare for a post-COVID-19 era, it is important to continue to promote innovation in fintech and digital finance. As part of the government’s strategies to pursue innovation, the FSC will continue to promote digital, big data and untact services in the financial industry.I. INCREASE FUNDING TO PROMOTE DIGITAL ECONOMYThe government is pursuing a ‘digital new deal’ through which establishing more digital infrastructures will help create new jobs. To this end, the government will increase investment in key technologies, such as 5G, AI and big data, and provide support for new growth engines, such as system chips, biohealth and future cars.II. IMPROVE REGULATIONS TO PROMOTE INNOVATIONThe revisions to the data related laws will help facilitate the utilization, convergence and distribution of personal financial data, which will also pave the way for MyData businesses. The abundant availability of public data to businesses will also help create more businesses and jobs. The FSC will seek to revamp the digital payment system through the introduction of MyPayment, while improving the applicability and security of open banking services. The FSC will also continue to work on improving financial regulations through its regulatory sandbox program.III. ENSURE SECURITY SAFETY OF DIGITAL DATAThe FSC will work to maintain a reliable cybersecurity system to facilitate digital innovation by seeking a right balance between data usage and protection, closing the gap on digital divide and preventing cyber voice phishing and other fraudulent activities.* Please refer to the attached PDF for details.
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May 28, 2020

Vice Chairman Holds Talks on Promoting Market-Based Corporate Restructuring

FSC Vice Chairman Sohn Byungdoo held talks on promoting more market-based approaches to corporate restructuring with relevant institutions and market experts on May 28.The following is a summary of Vice Chairman Sohn’s remarks.MARKET-BASED APPROACHES TO CORPORATE RESTRUCTURINGAmid the current pandemic-induced economic downturn, many businesses are facing difficulties. With a blurring boundary between liquidity risk and solvency risk, it appears that more and more companies will have to go through corporate restructuring. Meanwhile, the creditor banks face limited capability to support corporate restructuring due to uncertainties about future repayment prospects and burdens of securing additional reserves. Therefore, promoting market-based approaches to corporate restructuring is essential for eliminating this discrepancy.Due to the pandemic-related market uncertainties, companies are selling subsidiaries to bolster liquidity, and the role of experienced market players such as asset managers in the corporate restructuring and MA market is crucial in this regard.CORPORATE RESTRUCTURING FUNDAs of the end of April 2020, the corporate restructuring fund has invested about KRW700 billion in 16 companies since its launch in November 2018. The fund has provided support for business turnaround of twelve companies in the traditional manufacturing sectors, such as steel, shipbuilding and auto parts. The successful turnaround cases of KG Dongbu Steel and Sungdong Shipbuilding provide an important turning point for more market-based solutions to corporate restructuring.As such, the government plans to expand the size of the corporate restructuring fund from KRW1.6 trillion to KRW2.6 trillion this year. With about KRW75 billion from fiscal resources, policy banks have helped to create a KRW500 billion master fund.(PROJECT FUND) With the increased size of the fund, the proportion of project fund will be expanded from 26 percent to 40 percent while making investment available for
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May 27, 2020

2020 Online Korea Fintech Week

The 2nd Korea Fintech Week will be held virtually starting at 10 am on May 28. It is organized into five sessions, and the virtual exhibitions are open to everyone for viewing at free of charge via www.fintechweek.or.kr/2020. SCHEDULE(OPENING SESSION) Welcoming remarks by FSC Chairman Eun Sung-soo and congratulatory remarks by key dignitaries including Lord Mayor of the City of London William Russell and Standard Chartered CEO Bill Winters(SPECIAL SESSIONS) Presentations and seminars on ‘open innovation,’ showcasing major policy and industry trends at home and abroad► FSC: Fintech in Korea and digital transformation strategy in financial sectors► KFTC: Open banking in Korea► FSI: Financial data security in the 4th industrial revolution► VISA-Fintech Center Korea: Sharing successful collaboration lessons between global financial company and fintech► MAS: Future of fintech in post-COVID-19 era► Stone Chalk: Fintech trends in Australia► World Bank: Digital finance for crisis response and economic development – Role of the WB► KPMG: Korean fintech industry in 2020 policy trends► KOSCOM: Financial cloud computing and compliance in financial services► FSI: Security evaluation trends of cloud service providers in financial sectors► Regtech suptech showcases(VIRTUAL EXHIBITION HALLS) The six virtual exhibition halls are organized into a fintech ecosystem hall, a financial enterprise hall, a fintech start-up hall, a fintech scale-up hall, a big tech hall and a global enterprise hall, participated by about 150 entitiesTo help attract investment for the K-Growth fund, a major source of fintech investment operated by the Korea Growth Investment Corporation, a shortcut to fintech investors’ relations will be placed on top of the main page.(ONLINE JOB FAIR) HR managers from 35 financial companies and fintech firms will provide information about job openings, nature of work and qualities they look for in new hires. About a dozen companies have plans t
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May 26, 2020

Vice Chairman Calls for Close Cooperation between Businesses, Creditors and Lending Institutions

FSC Vice Chairman Sohn Byungdoo held the 5th financial risk assessment meeting on May 26 to check the current status of the COVID-19 financial support for businesses and households. The following is a summary of Vice Chairman’s remarks.(LOW-RATE FINANCIAL SUPPORT FOR SMALL MERCHANTS) The government has made available KRW16.4 trillion in low interest rate financial support package for about 430,000 small merchants. Between May 18 and 22, about 31,442 applications were received by lending institutions.(EMERGENCY RELIEF PAYMENTS) As of May 25, about 94 percent of households applied for emergency relief payments. Swift processing of relief payments was made possible by strong cooperation between the public and private sectors.(SPV KEY INDUSTRY STABILIZATION FUND) The government will take prompt steps in preparation for establishing a special purpose vehicle intended to purchase low rated corporate bonds and CP, and for launching a key industry stabilization fund this week.In order to boost the effectiveness of these policies, close cooperation is essential between businesses, creditors and financial institutions.FINANCIAL SUPPORT PROVIDEDAs of May 22, a total of KRW107.8 trillion (1,327,000 individual cases) in loans and guarantees as well as loan and guarantee extensions were provided to the SMEs and small-scale businesses that have been hit by the COVID-19 pandemic.► FINANCING BY TYPE: KRW54.3 trillion (1,038,000 cases) in new loans and guarantees, KRW50.2 trillion (256,000 cases) in maturity extensions and deferred payments, KRW900 billion (7,000 cases) in deferment of interest payments, and KRW2.4 trillion (25,000 cases) in export-import credit finance and discounted interest rates and late fees► FINANCING BY INDUSTRY: KRW13.5 trillion (150,000 cases) to wholesale businesses, KRW8.7 trillion (273,000 cases) to restaurant businesses and KRW8.7 trillion (223,000 cases) to retail businesses► FINANCING BY PROVIDER: KRW59.1 trillion (824,000 cases) by policy bank
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May 25, 2020

Improvements in Payinfo System to Boost Consumer Convenience

The FSC announced that switching automatic transfer accounts using ‘Payinfo’ will be possible between banks and non-banks beginning on May 26, which will help improve convenience for consumers and promote competition between financial institutions.Since its launch in October 2015, switching automatic transfer accounts through ‘Payinfo’ was possible only between banks or non-banks, exclusively. As of the end of December 2019, about 61.7 million account inquiries and nearly 23.4 million switches in automatic transfer accounts were made.Starting from May 26, consumers will be able to make switches between all banks and non-banking financial institutions that are currently offering automatic account transfer services either through their platforms or via www.payinfo.or.kr.The government will continue to work on improving consumer convenience by expanding inquiry services on card-based automatic payments to all card companies. The government also plans to introduce a similar system for card-based automatic transfers where consumers are afforded with more freedom to cancel or switch between different cards.* Please refer to the attached PDF for details.
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May 20, 2020

Government Unveils Plans to Create SPV to Support Corporate Bond and CP Markets

The government announced on May 20 specific plans to create a special purpose vehicle (SPV) aimed at supporting the corporate bond and commercial paper markets.BACKGROUNDThe conditions surrounding the corporate bond market hit by COVID-19 have improved somewhat recently with the government setting up a bond market stabilization fund (KRW20 trillion) and providing support for the issuance of primary collateralized bond obligations (KRW6.7 trillion) and corporate bonds (KRW4.1 trillion). As a result, the total amount of newly issued blue-chip corporate bonds rebounded in April. However, the bond market still remains weak for lower rated corporate bonds with A or below ratings, and there is stronger preference for short-term bonds. Against this backdrop, the government announced on April 22 its plans for creating an SPV to purchase lower-rated corporate bonds and commercial paper.SPV MANAGEMENTThe government, the Bank of Korea and the Korea Development Bank will set up a KRW10 trillion SPV to help stabilize the corporate bond market, with the possibility of increasing its size up to KRW20 trillion.(FUNDING SOURCES) KRW1 trillion (10%) equity capital from KDB, KRW1 trillion (10%) in subordinated loans from KDB and KRW8 trillion (80%) in primary loans from BOK(PURCHASING TARGETS) AA to BB rated corporate bonds A1 to A3 rated CP and short-term debt with maturity of up to 3 yearsThe SPV purchasing program will mostly focus on A rated bonds but will also buy ‘fallen angels,’ junk-rated bonds which were downgraded from investment ratings due to Covid-19.Companies with their interest coverage ratio of 100% or less for two consecutive years will be precluded from the purchasing program.(PURCHASING LIMITS PRICES) In order to fulfill the purpose of market stabilization, purchasing limits will be established within 2 to 3 percent of the total fund available from the SPV purchasing program for each individual company and business sector.To encourage market-based capital raisin
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May 20, 2020

Plans to Create Key Industry Stabilization Fund

The government announced detailed plans for the operation of the key industry stabilization fund on May 20.The initial plan for creating a KRW40 trillion key industry stabilization fund was announced on April 22 as business activities slowed down and the employment numbers began to fall amid the COVID-19 pandemic.With the National Assembly’s swift passage of the laws, the necessary legislative changes have been made to provide a legal ground for creating a stabilization fund.1KEY INDUSTRY STABILIZATION FUNDI. SUPPORT TARGETS(INDUSTRY REQUIREMENT) Industries designated by the enforcement decree of the Korea Development Bank Act to have significant effects on the domestic economy, the stability of the job market and the national security2(BUSINESS REQUIREMENT) (a) Enterprises having a significant impact on the national economy with total debts standing at KRW500 billion or more, and (b) businesses having a significant impact on the job market with total employees numbering 300 or moreFor qualified businesses, the fund operating council made up of private-sector experts will make decisions on the provision of support after consultation with the major creditor bank and assessment from the KDB.II. SIZE METHOD OF FUNDING SUPPORT(SIZE) In principle, the size of the support will be based on operating costs minus expected earnings based on sales forecast while excluding the amount needed for repayment of existing debt.(METHOD) Support for businesses will come in diverse ways—including liquidity support and capital injection —through issuing loans, taking over equity-linked securities, purchasing assets and providing guarantees.(FUNDING SOURCES) The KRW40 trillion stabilization fund will be created through bond issuance.III. CONDITIONS FOR SUPPORTIn order to receive support through the key industry stabilization fund, businesses will be required to retain jobs, share profits from business normalization and work to prevent moral hazard.(EMPLOYMENT) Businesses should main
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May 19, 2020

Vice Chairman Holds Meeting on Supervision of Financial Conglomerates

FSC Vice Chairman Sohn Byungdoo convened a consultative meeting on the supervision of financial conglomerates on May 19, and discussed specific plans for their group-wide risk assessment, disclosure and internal risk control systems.VICE CHAIRMAN’S REMARKSVice Chairman Sohn started out by stressing the significance of the consultative meeting, adding that the financial authorities should closely monitor recent volatility in the financial markets to prevent risk spillover to financial groups.On April 21, the IMF’s Financial Sector Assessment Program recommended that legislation on the supervision of financial groups is necessary to provide effective supervision on non-holding financial groups that are systemically important in Korea.With regard to the implementation of the measures to improve the supervision of financial conglomerates announced on February 24, the authorities will closely communicate with different stakeholders and experts to come up with appropriate indexing system that takes into account diverse risk factors for their group-wide risk assessment.IMPLEMENTATION PLANS(GROUP-WIDE RISK ASSESSMENT) Introduce within this year a group-wide risk assessment system which combines the currently distinct ‘risk concentration’ and ‘risk transfer’ categories into a single comprehensive framework for assessing capital adequacy requirements(GROUP-WIDE DISCLOSURE) Begin an integrated group-wide disclosure in September this year through which the six financial conglomerates will gather required information from their subsidiaries and provide group-wide disclosure of information on 8 sections and 25 categories, including ownership governance structure, internal risk management procedures, financial soundness, etc.(INTERNAL CONTROL SYSTEM) Work to introduce a group-wide internal control system in the second half of this year by having the six financial conglomerates establish and operate their own internal control councils and standards by the end of the thi
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May 19, 2020

Asia Region Funds Passport to be Launched on May 27

The government approved the revisions to the enforcement decree of the Financial Investment Services and Capital Markets Act on May 19 in preparation for the implementation of the Asia Region Funds Passport (ARFP) on May 27.KEY PROVISIONSThe revisions establish the following provisions for the registration and operation of passport funds.► REGISTRATION FOR PASSPORT FUNDS: Publicly offered local funds with (a) at least USD500 million in assets under management and USD1 million or more in capital, and (b) at least two board members with 5 years or more of management experience in the financial sector can apply to be registered as passport funds.Registered passport funds will be operated through securities and short-term financial instruments, sales of derivatives and securities lending agreement.► REDEMPTION DELAY AUDIT RULES: (a) A redemption delay is allowed when the amount of redemption requests surpasses 10 percent of the fund’s net asset value, (b) Small size funds (total assets of KRW30 billion or less) will be subject to an audit without exception► SALE REGISTRATION OF FOREIGN PASSPORT FUNDS: Foreign passport funds registered at another member economy will be available for sale in Korea through a streamlined process. Foreign passport funds sold in Korea will be subject to the same rules, regulations and investor protections as the publicly offered local funds.SCHEDULEThe revisions will become effective on May 27. The guidelines from the Korea Financial Investment Association and information about the registration process and relevant forms will be distributed to help facilitate the use of ARFP.* Please refer to the attached PDF for details.
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May 19, 2020

4th Financial Risk Assessment Meeting

FSC Vice Chairman Sohn Byungdoo held the 4th financial risk assessment meeting on May 19. At the meeting, Vice Chairman Sohn vowed to strengthen support for the corporate bond and commercial paper markets.The following is a summary of Vice Chairman Sohn’s remarks.(DOMESTIC FINANCIAL MARKETS) The financial markets are showing signs of stability due to prompt policy responses from the government. In order to ensure that the current market stabilizing effects can have a wider impact, the government will provide support for low-rated corporate bonds and commercial paper. The downgraded corporate bonds from AA- to A+ rating as of April 1 will also be eligible to receive support through the bond market stabilization fund. On May 29, nearly KRW1 trillion worth of P-CBOs will be issued to help COVID-19 hit enterprises. Beginning in June, credit finance business bonds with A+ or A- ratings will also be eligible for support through the bond market stabilization fund.(2ND PHASE FINANCIAL SUPPORT FOR SMALL MERCHANTS) The 2nd phase of financial support for small merchants is currently being provided by seven banks, and it will be available at more regional banks across the country as their systems become ready within June. The availability of untact application services for the support will help enhance our efforts at digital transformation and financial inclusiveness as we prepare for the post-COVID-19 era.(KEY INDUSTRY STABILIZATION FUND) The government will prepare for the prompt implementation of the fund and work to ensure that businesses are able to receive loans in June.The government will continue to closely monitor markets and take necessary measures to maintain stability in the markets.FINANCIAL SUPPORT PROVIDEDBetween February 7 and May 15, a total of KRW97.8 trillion (1,185,000 individual cases) in loans and guarantees as well as loan and guarantee extensions were provided to the SMEs and small-scale businesses that have been hit by the COVID-19 pandemic.► FINANC
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May 18, 2020

Vice Chairman Holds Meeting on Measures to Improve Asset-backed Securities Market

FSC Vice Chairman Sohn Byungdoo held a meeting with industry officials and experts on May 18 to discuss ways to improve the asset-backed securities market.The following is a summary of Vice Chairman Sohn’s remarks.(IMPORTANT ROLE OF ASSET-BACKED SECURITIES) The asset-backed security (ABS) provides businesses with a great means to raise funds and offers more favorable terms than credit-based financing. Businesses are able to treat securitized assets off-the-book for accounting purposes, which helps to improve their financial structure. The ABS allows businesses to securitize diverse assets including future assets and intellectual property rights to generate funds needed for now. In Korea, the enactment of the Asset-backed Securitization Act in 1998 contributed to clearing troubled assets and helped ride out the foreign exchange crisis. Since then, the ABS has been used as an innovative means to raise funds by enterprises and financial companies.(IDENTIFYING PROBLEMS) (a) With regard to risk management, the rapid expansion of the unregistered securities market can be a risk factor as it is difficult to identify the issuing entity, records of underlying assets and securitization structure. In particular, the real estate project financing asset-backed commercial paper (ABCP) poses problems for securities firms as they have to take the burden of refinancing risk due to a duration mismatch between fund raising and fund management. (b) The role of ABS in corporate financing has also been in decline. Over the years, the ABS market’s focus has been shifting toward transactions that follow interest margins. Due to the delayed reforms in the registered securities system, the current ABS market has been unable to fully accommodate diverse securitization demand in the market.(MEASURES FOR IMPROVEMENT) (a) To enhance risk management, the government will introduce the risk retention rule, requiring asset holders to possess about 5 percent of credit risk to prevent conflict of
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May 18, 2020

Measures to Improve ETF and ETN Markets

The FSC announced the measures to improve the exchange-traded fund (ETF) and exchange-traded note (ETN) markets on May 15, which seek to contain overheated investment demand and mitigate excessive concentration on particular investment products.The measures are aimed at (a) preventing indiscriminate investment behavior in ETF and ETN markets by requiring minimum deposits and mandatory online education for retail investors, (b) improving brokerage firms’ management of disparate ratios to minimize investor damages from speculative demand, and (c) creating an environment for the development of diverse investment products to break up excess demand on particular instruments.BACKGROUNDETFs and ETNs are exchange listed investment products structured to enable diversification of investment for retail investors in traditional investment assets, such as stocks and bonds, and to allow small-sum investing in a variety of alternative assets including foreign exchanges and commodities.The ETF market has grown as a major publicly offered fund market and ETNs have provided a niche market where ETF offering remained difficult. Recently, there has been excessive concentration toward leveraged ETFs and ETNs amid the COVID-19 pandemic-induced market volatility. After the collapse of international oil prices, investors flocked to major oil ETFs and ETNs with an expectation for a rebound in oil prices, thereby raising the potential for losses. Trend followers who lack information about the risk characteristics of these products also flocked to invest in oil ETFs and ETNs, artificially pushing up trading prices well above their intrinsic asset values. A series of investor alerts and cautions by securities companies, the Korea Exchange and the FSS as well as transaction suspensions have been issued, but they have yet to successfully curb the overheated demand. Thus, the financial authorities drew up measures to cool overheated investor demand and more effectively manage markets.RECENT IS
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May 18, 2020

FSC Unveils 5th Plan for Financial Hub Policy

The FSC unveiled the 5th three-year plan for Korea’s financial hub policy (2020-2022) on May 15. The specific strategies include pursuing regulatory reforms to promote private sector-driven innovation, building infrastructure to continue innovative growth in the financial industry and adopting a ‘selection and concentration’ approach to build global capacity with a particular attention paid to the ASEAN markets.To accomplish these goals, the FSC adopted three key sectoral tasks—(a) supporting financial sectors that have comparative advantages, (b) developing financial infrastructure on a par with global standards and (c) providing effective support for financial hubs.Since 2008, the FSC has drawn up three-year plans for Korea’s financial hub policy, maintaining a consistent policy direction while effectively responding to rapid changes taking in the industry.KEY TASKSI. SUPPORT FINANCIAL SECTORS WITH COMPARATIVE ADVANTAGES(FINTECH INNOVATION) Foster the fintech industry through adequate funding support and creating a virtuous cycle between the financial regulatory sandbox program and regulatory reforms(ASSET MANAGEMENT MARKET) Promote pension fund management services and facilitate innovation in the asset management sector through improvements in regulations(PUBLIC FUNDS’ OVERSEAS INVESTMENT) Have the National Pension Service (NPS) and Korea Investment Corporation (KIC) boost their overseas investment as well as their contribution to the growth of the domestic asset management industry II. DEVELOP FINANCIAL INFRASTRUCTURE ON PAR WITH GLOBAL STANDARDS(DATA USE) Establish legal and institutional frameworks to promote a widespread use of big data in the financial industry(ANTI-MONEY LAUNDERING) Improve the regulatory framework on anti-money laundering scheme on a par with global standards and strengthen capacity to combat money laundering(FOREIGN EXCHANGE SYSTEM) Ensure smooth overseas transactions by improving user convenience in foreign exchange transacti
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May 14, 2020

Overview of Financial Regulatory Sandbox

The FSC has been operating a financial regulatory sandbox program since April 1, 2019 to promote competition and innovation in the financial industry and provide more benefits to consumers.OVERVIEWA total of 102 ‘innovative financial services’ have been designated so far through fourteen evaluation committee meetings. Under the regulatory sandbox program, the designated firms are granted exemptions from licensing and other sales regulations for up to four years. The evaluation is based on the level of innovativeness, potential contribution to consumer convenience, and the soundness and feasibility of business plan.Among the 102 designated service providers, fintech firms (54 cases, 53%) made up a majority, followed by financial institutions (39 cases, 38%), IT firms (6 cases, 6%) and public sector institutions (3 cases, 3%).By service types, banks were most numerous (16 cases), followed by insurance services (15 cases), capital markets-related services (15 cases), loan comparison services (14 cases), payment cards (13 cases), data services (12 cases), electronic finance (11 cases), foreign exchange (3 cases) and others (3 cases).As of now, 36 ‘innovative financial services’ are at the stage of market test with 66 more expected to be launched in the first half this year.FINANCIAL INNOVATIONINCREASING BENEFITS TO CONSUMERS: a) The shift away from a supplier-driven market toward a more consumer-oriented environment has lowered costs for financial services in the form of interest payments, insurance premiums, etc., b) With the launching of easy-to-use financial services in everyday life, consumer access to financial services has been improved, c) Development of specific services tailored to the needs of SMEs and small-scale businesses has helped extend more financing opportunities to those that had been traditionally unable to access financial services, d) Innovative financial services have contributed to addressing various social problems in the areas of renewa
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May 13, 2020

Reporting Deadline Extended for Financial Companies' Overseas Branches

The financial authorities decided on May 13 to grant an extension of reporting deadline until August 31 this year for financial companies’ overseas branches that face compliance burdens due to COVID-19.According to the current regulations, an extension of filing reports is permitted for unavoidable reasons and circumstances at overseas branches, and the authorities decided that the current pandemic-related reasons and circumstances in their locations qualify as unavoidable. As such, the financial companies’ overseas branches will not face a fine of KRW7 million for failure to submit their annual performance report by the deadline.The government may consider a further extension of the deadline depending on the development of situations.* Please refer to the attached PDF for details.
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May 13, 2020

FSC Announces Plans for MyData Businesses

The FSC announced a schedule for demand survey and preliminary consulting for MyData businesses on May 13. As the revision of the Credit Information Use and Protection Act is scheduled to take effect on August 5, financial companies and fintechs planning to enter the MyData industry should gain approval from the FSC.MYDATA LICENSING(REQUIREMENTS) By law, MyData business operators are required to have a minimum capital of KRW500 million and adequate telecommunications facilities for safe data processing, while satisfying the major shareholder and feasibility of business plan requirements.Licenses will be granted based on the holistic evaluation of firm’s capabilities to process data in a safe and secure manner.(RESTRICTIONS) In principle, there is no quota regarding the number of MyData licenses offered to business entities. Multiple entities within a financial group or a holding company may be granted licenses to operate MyData businesses. Financial companies will be subject to the same evaluation standards as fintech firms for MyData licenses.DEMAND SURVEY PRELIMINARY CONSULTINGThe FSC will carry out a demand survey from May 14 to May 28 to see how many business entities are planning to apply for MyData licenses. Interested entities should submit their demand survey forms to mydata@fss.or.kr.An information session will be held in June for the businesses that have submitted their demand survey forms and a preliminary consulting will be provided in June-July to help firms with relevant documents and processes.EXPECTATION(FOR CONSUMERS) MyData businesses will enable ‘pocket finance’—consumers will be able to manage their personal credit information and financial products within the palm of their hands. Consumer convenience will be improved as consumers will no longer need to access individual financial institutions to view their credit and asset information dispersed across many different entities. Consumers will also be able to enjoy more personalized credit
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May 12, 2020

Government Prepares to Launch Key Industry Stabilization Fund

The government decided to designate the airline and maritime shipping sectors as the key industries eligible to receive support through the key industry stabilization fund on May 12.The decision has been made official at a cabinet meeting as the government made changes to the FSC’s earlier revision proposal, which included five other sectors — machinery, automobile, shipbuilding, electric power and communications industries. The FSC may designate other sectors as key industries after consulting relevant ministries and upon coordination with the Ministry of Economy and Finance.The FSC will work to provide effective support to the key industry businesses through the stabilization fund.* Please refer to the attached PDF for details.
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