Press Releases - Financial Services Commission

Press Releases

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Oct 24, 2017

Comprehensive Measures for Household Debt Management

The government announced a comprehensive scheme to manage household debt in an effort to reduce financial risks in the short-term; and strengthen macroeconomic soundness, boost household income and repayment ability in the mid-to-long term.I. BACKGROUND: ASSESSMENT OF THE CURRENT CONDITIONSouth Korea’s household debt is unlikely to cause a systemic risk:▪ Household debt repayment ability is sufficient enough to keep default risks limited. Households’ net assets continue to increase as their property assets grow with mortgages The top 20 % of income earners owns 70% of household debt.▪ The soundness of household debt has improved as the proportion of fixed-rate and amortized loans increased.▪ Financial institutions have sufficient capacity to absorb unexpected losses, if any. Delinquency rates on household loans are kept low. Banks’ BIS ratio is 15.4% as of end-June 2017, exceeding the BIS requirement of 9.125%.▪ The pace of household debt growth began to slow as tighter screening standards for household loan applications apply across all the financial sectors.▪ The OECD and credit rating agency SP also evaluated that South Korea’s household debt is unlikely to pose a systemic risk, citing improvement in the quality of household debt with a growing share of fixed-rate and amortizing mortgages out of total household loans.However, some groups of borrowers, particularly whose debt repayment ability is highly limited, remain vulnerable to possible rate hikes.II. KEY POLICY MEASURESPOLICY REPSONESE TAILORED FOR CHARACTERISTICS OF BORROWERSThe government will provide tailored assistance for each grouping of borrowers according to their debt repayment capability.▪ (Group A) Borrowers with sufficient debt repayment ability- Policy focus will be on boosting household income and managing financial soundness ▪ (Group B) Borrowers who pay their debt on schedule but feel financially distressed- Policy responses will be focused on preventing deli
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Sep 28, 2017

Revision to the Act on External Audit of Stock Companies

I. BackgroundThe Act on External Audit of Stock Companies (hereinafter referred as “the Act”) has gone through major improvements since the bill was enacted in 1981. Among them, the latest revision, passed by the National Assembly on September 28, 2017, is the most far-reaching reform of Korea’s accounting and audit practices, compared to a Korean version of the Sarbanes-Oxley Act. To deter a repeat of major accounting scandals in recent years, the revised bill contains fundamental changes in a wide range of issues, including external auditor independence, corporate accountability, and penalties against wrongful acts. Those changes will set higher standards for all stakeholders in their role, including companies, auditors and financial regulators, to further advance Korea’s accounting reform efforts. The revised bill will take effect November 1, 2018, one year after the date of its promulgation.II. Key ProvisionsCompanies, greater accountability and stronger internal control1. The scope of companies subject to external audit, currently limited to ‘stock companies’ under the Act, will be expanded to include ‘limited liability companies (LLCs).’* Specifics about companies subject to external audit and the scope of disclosure of audit reports will be delegated to the subordinate Enforcement Decree of the Act.2. The right to appoint an external auditor, currently exercised by the company’s management, will be transferred to internal audit organizations such as the ‘statutory auditor’ or the ‘audit committee.’3. Companies will be held more accountable for preparation of their financial statements.► A company shall not require an external auditor to prepare financial statements on its behalf.► If a company fails to submit financial statements to the external auditor and the Securities and Futures Commission (SFC) within the statutory deadline, six weeks before the general meeting of shareholders, the company’s representative director shall
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Aug 24, 2017

Rules on Overheated Short Sale Issues to be Amended

The FSC and Korea Exchange (KRX) announced a plan to amend regulations regarding overheated short sale issues, which came into force on March 27, 2017, in a bid to better detect overheated short sales and toughen penalties on violations of short-selling rules.For the past four months since the rules on designation of overheated short-selling stocks were introduced in March, KRX suspended trading of “overheated short–selling stocks” five times on the KOSPI market and six times on the KOSDAQ market.However, it has been pointed out that the criteria for designation of overheated short-sale issues are too narrow to verify more short sales deemed overheated2; and penalties for violations of short sale rules are too lenient to be effective.PROPOSED AMENDMENTSI. AMENDING CRITERIA FOR DESIGNATING “OVERHEATED SHORT-SELLING ISSUES”1. Key changesCurrently, short-sale issues are designated as “overheated issues” when:(i) short-selling value of a trading day accounts for 20% or more(KOSPI) and 15% or more(KOSDAQ) of total trading value of the day;(ii) the proportion of short sales value of the day increases 100% or more, compared to the average of the 40 trading days; and(iii) the stock price falls 5% or more, compared to the closing price of the previous day.The criteria will be amended to detect overheated short sale issues in a bull market and adjusted periodically depending on market situations.(i) The “proportion of short-selling” criterion3 will be lowered from the current 20% to 18% (KOSPI); and from 15% to 12% (KOSDAQ) out of total trading value of the day.* The criterion will not be applicable to issues whose price experiences a sharp drop of more than 10%; or KOSDAQ-listed issues whose proportion of short sales of a trading day accounts for more than 5% of the average of the preceding 40 days.(ii) The “increase rate of short-selling value” will replace the criterion of “increase rate of short selling proportion”* Short sale issues are designat
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Aug 02, 2017

FSC Tightens Mortgage Rules to Curb Speculative Demand in Housing Market

The government announced a package of measures that designate some “overheated” or “bubble-prone areas” in Seoul, Busan and other major cities and discourage speculative buying in the designated areas. As part of the government’s effort, the FSC will tighten loan-to-value (LTV) and debt-to-income (DTI) rules to curb speculative demand in the housing market.MORTGAGE RULES TO BE TIGHTENED IN BUBBLE-PRONE AREASLTV and DTI ratios will be tightened to 40% for home buyers in the designated regions, regardless of types of housing, amount and maturity of such mortgages.※ To protect real demand for housing, the ratios of both LTV and DTI will be relaxed to 50% for first-home buyers, low-income households with annual income of less than KRW 60 million, or low-price housing of less than KRW 600 million.TIGHTER MORTGAGE RULES FOR MULTIPLE HOME OWNERSFor mortgage borrowing by a household to own multiple homes, LTV will be tightened by a further 10%p across the country, while DTI will be tightened by 10%p for home buyers in the designated areas.FSC Chairman Choi Jongku immediately convened an extraordinary session with FSC commissioners to discuss needed revisions to relevant regulations so that new mortgage rules could become effective as soon as possible. Chairman Choi also held a meeting with heads of the FSS and financial institutions to ask closer monitoring to make sure expected tightening of mortgage rules should not result in a sudden surge in borrowing before the new rules take effect.* Please read the attached file for details.
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Jul 27, 2017

Korea's Second Internet-only Bank Open for Service

KakaoBank, Korea’s second internet-only bank, officially launched for service on July 27 after twenty months of preparation since the FSC granted preliminary approval.KakaoBank provides various financial services including account establishment, overseas remittance, and purchasing financial products 24 hours a day via mobile devices. In particular, the bank offers overseas remittance charge of only 10% that of commercial banks. It also plans to provide innovative financial services using big data and asset management using artificial intelligence(AI)-imbedded personal financial assistance program.*Please read the attached file for details.
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Jul 26, 2017

FSC Chairman Announces Financial Policy Roadmap

FSC Chairman Choi Jongku had his first meeting with the press since taking office and announced financial policy direction under the Moon Jae-in administration. The FSC will ensure (a) funds are channeled into more productive and innovative businesses, and (b) enhance financial accessibility for the financially-marginalized in a bid to establish a strong foundation for sustainable economic development.Funds channeling into productive businesses1. Financial industry as job creatorPolicy finance system will be overhauled so that necessary funds are effectively channeled into innovative businesses and sectors related to the fourth industrial revolution which have significant job-creating potentials. Companies with competitive technology and innovative idea will be enabled to take out loans with non-tangible assets such as patent and future sales as collateral. Moreover, the FSC will come up with measures in September for non-regular workers at public financial institutions to sign a full-time contract.2. Create quality jobs through financial innovationThe FSC will announce in the second half this year measures to encourage steady job creation in the financial sector through development of new innovative financial technology and services. Moreover, financial business licensing procedures will be improved to ease innovative financial companies’ entrance to the market.3. Overhaul financial system to facilitate investment into productive areasCapital regulations of each financial business sector will be overhauled to ensure investments are made into productive areas. Financial institutions will be encouraged to reasonably and transparently set interest rates at their own risk.4. Vitalize capital market investment for household income growthCapital market investment will be vitalized to help households accumulate wealth. The government will create a system that efficiently and stably manages household wealth such as enacting individual pension plan act5. Stably manage hou
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Jun 28, 2017

FSC Identifies D-SIBs for 2018

The FSC identified on June 28, 2017, four bank holding companies and one bank as domestic systemically important banks (D-SIBs) for 2018: Shinhan Financial Group, Hana Financial Group, KB Financial Group, NH Financial Group and Woori Bank.Under the D-SIB framework of the Basel Committee on Banking Supervision (BCBS), the D-SIB higher loss absorbency requirement is phased in by 0.25% per year from 2016 to 2019. Therefore, those identified as D-SIBs for 2018 are required to set aside an additional common equity capital of 0.75%, and the higher loss absorbency requirement will take effect on January 1, 2018.The BIS ratio for the identified D-SIBs at the end of March 2017 exceeds the minimum capital adequacy ratio1. Therefore, there is no actual burden at present for the identified D-SIBs to set aside additional capital.The FSC will identify D-SIBs every year in accordance with assessment criteria recommended by the BCBS.*Please read the attached file for details.
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Jun 21, 2017

FSC Held Market Monitoring Meeting on Results of MSCI 2017 Market Classification Review

FSC Vice Chairman Jeong Eun-bo held a meeting on June 21 with officials from relevant agencies to discuss the impact of the MSCI’s 2017 Market Classification Review and the government’s responses.INCLUSION OF CHINA A-SHARES INTO MSCI EMERGING MARKET INDEXIn its annual market review, MSCI decided to include China A-shares, 222 large-cap stocks of Chinese companies listed in either Shanghai or Shenzhen, into the MSCI Emerging Market (EM) Index.IMPACT ON KOREA’S FINANCIAL MARKETAs the inclusion of China A-shares increases China’s weighting in the MSCI Emerging Market Index, Korea’s weight in the same index is expected to decrease by 0.23 %p from its current 15.5%. Given the amount of funds tracking MSCI EM Index, which ranges between KRW 250 trillion (USD 230 billion) and KRW 1,900 trillion (USD 1.8 trillion), Korea may experience possible outflow of KRW 600 billion to KRW 4.3 trillion from the equity market.The FSC, however, sees MSCI’s decision will have a limited impact on the Korean stock market for the following reasons:▪ The change will be actually reflected in the MSCI EM Index in a year, from June 2018.▪ The amount of global funds investing in emerging markets continues to increase, recording a net inflow of USD 18.1 billion into emerging markets from April to May 2017.▪ Given that the Korean stock market attracted a net foreign capital inflow of KRW 9 trillionin the first five months this year alone, the amount of possible outflows (max. KRW 4.3 trillion) is not so significant.GOVERNMENT’S RESPONSESThe government will keep monitoring the impact of the MSCI’s decision to include China A-shares into its emerging market index on the Korean equity market. We will also continue our policy efforts to improve global competitiveness and attractiveness of our capital markets, and consultation with MSCI in regard with the inclusion of Korea on the list for potential reclassification to the MSCI Developed Market Index.* Please read the attached file
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Jun 14, 2017

Credit Card Merchant Fees To Be Lowered For More Small Merchants

The FSC proposed amendments to the Enforcement Decree of the Specialized Credit Financial Business Act to lower credit card merchant fees for small businesses with annual sales of KRW 500 million or less. Currently, preferential rate of 0.8% is applied to small merchants with sales of less than KRW 200 million; 1.3% to those with sales of less than KRW 300 million. The amendments proposed to raise sales threshold for preferential rates so that more small merchants and businesses can benefit from low preferential rates.CHANGES TO ANNUAL SALES THRESHOLD FOR PREFERENTIAL RATES▪ small merchants for preferential rate of 0.8%:KRW 200 million (current) → KRW 300 million (amended)▪ small and medium-sized business for preferential rate of 1.3%: KRW 300 million (current) → KRW 500 million (amended)The amendments are expected to save merchant fees of about KRW 350 billion per year for small merchants whose annual sales range from KRW 200 million to KRW 500 million.The amendment proposal will be open for public comments until June 26 and submitted to the Cabinet for final approval in late July to take effect in August.* Please refer to the attached PDF for details.
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Apr 13, 2017

New Approach to Corporate Restructuring

FSC Chairman had a meeting with CEOs of commercial banks on April 13 to set out a new approach to corporate restructuring. The new approach was outlined to complement the existing framework of corporate restructuring; and to shift its focus to more market-based restructuring schemes, in which capital market players including private equity funds (PEFs) play a bigger role in corporate restructuring.I. BACKGROUNDThe existing system led by creditor banks has limits as companies today, which used to heavily rely on bank loans, are increasingly using capital markets for fundraising via issuance of corporate bonds or commercial papers (CPs). Such a change made the process of adjusting the interests of creditors more complex and difficult. Against this backdrop, the FSC outlined a new approach to corporate restructuring aimed at improving the current restructuring system led by creditor banks and stimulating capital market-based restructuring schemes through PEFs.II. NEW APPROACH TO CORPORATE RESTRUCTURING1. Credit Risk Evaluation System To Be Improved▪ Banks will be required to revise their credit risk evaluation models and procedures withinthe second half of this year to make more accurate and rational evaluations so that they could sort out troubled companies to be put under restructuring in a timely manner.▪ For companies under a workout program led by creditor banks, banks will have to adoptstricter evaluation standards to decide whether to continue the workout program or not. If the workout program proved inefficient, the company undergoing the workout would swiftly turn to alternative schemes such as a buyout plan led by PEFs or court receivership including the newly-introduced ‘Pre-packaged Plan’ (or ‘P-Plan’).▪ For those who have been under workout program for more than three years, an extensionof the workout period will be permitted only in exceptional circumstances after a thorough evaluation by an external auditor.2. Market-based Restructuring Sch
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Apr 03, 2017

Korea's 1st Internet-only Bank Open for Service

‘K bank’, Korea’s first internet-only bank is officially launched on April 3 for service.At the opening ceremony, Financial Services Commission Chairman Yim Jong-Yong emphasized three significant meanings of the launch of K bank. First, K bank has already brought about a new wave of competition in the banking sector. Second, financial consumers will be able to enjoy numerous benefits including lower banking transaction cost, more convenient banking services, and easier access to loans compared to those provided by commercial banks. Third, more descent quality jobs will be created in the banking, IT, and fintech sectors.K bank will supply mid-interest rate loans worth KRW 500 billion for the next three years. It will start with providing retail banking services and its business scope will be widened to include mortgage loan, payment services, foreign exchange, and fund sales in time.K bank acquired preliminary approval for banking business in November 2015, and final approval in December 2016.*Please refer tothe attachedPDF for details.
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Mar 12, 2017

FSC Holds Emergency Meeting on Financial Markets after Court Ruling on Presidential Impeachment

FSC Chairman Yim Jong-yong convened an emergency meeting on Sunday, March 12 with top officials from the Financial Supervisory Service(FSS) and other relevant financial institutions to monitor market effects and discuss policy responses after the Constitutional Court’s decision on last Friday to uphold the parliamentary vote to impeach the country’s President.Korea’s financial market remained calm even in the face of an unprecedented situation of presidential impeachment. Global investors and foreign media generally view that the court’s ruling has eliminated a considerable amount of uncertainty, which would help boost consumption and investment in the Korean economy. However, there is a possibility of further market fluctuations depending on political developments including the upcoming presidential election. We also face external uncertainties such as the Fed’s possible rate increase and growing security tension involving North Korea’s nuclear threat.Against this backdrop, the government will stay alert to internal and external risks and take swift actions, if necessary, with a 24-hour emergency response system already in operation since last year. In a pre-emptive move to stabilize corporate bonds market after the U.S. interest rate hikes, policy banks are ready to inject a total of KRW900 billion in helping smaller companies issue corporate bonds. The government will crack down and strongly discipline market-disruptive activities to capitalize on the upcoming presidential election, while tightening its monitoring over possible cyber attacks against financial institutions. We will continue to manage household debt risks in a preemptive manner with a particular focus on the recent rapid growth in the non-banking sector and high-risk loans. The government will continue corporate and industry restructuring as planned to ease market concerns.* Please refer to the attachedPDF for details.
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Jan 05, 2017

Financial Policy Direction for 2017

The FSC outlined its financial policy direction for 2017, focused on (i) prompt and thorough response to financial market risks; (ii) financial support for stabilization of household livelihood; and (iii) financial reforms and innovation to revitalize the economy.I. Prompt and thorough response to financial market risks Financial market stability- The FSC will closely monitor financial markets to keep risk factors under control through a 24-hour emergency response system.- Measures will be taken to stabilize corporate bond market to ensure stable funding conditions for companies in response to increased volatility in financial markets. Household debt management- Guidelines on stricter screening of loan applications will be expanded to all financial institutions to make sure borrowers take loans that they can afford and repay in installments.- The FSC will set out a roadmap in the first quarter of 2017 for improved standards for screening a borrower’s creditworthiness - e.g. gradual introduction of debt service ratio (DSR) as a tighter standard to assess a borrower’s debt repayment ability. Corporate restructuring- Corporate restructuring will be carried out under consistent principles that emphasize a troubled company’s self-rescue efforts and burden sharing.- A new framework for corporate restructuring (‘Pre-packaged Plan’), which combines advantages of creditor-led debt workout and court-led rehabilitation, will be promoted to expedite business normalization of a troubled company. Sound financial market practice- The FSC will promote more transparency in corporate management and financial transactions by improving the current accounting and audit system, encouraging the introduction of ‘stewardship code’ to a wider range of companies and establishing sound financial market practice.II. Financial support for stabilization of household livelihood Microfinance support for low-income borrowers- The government will increase its injection of
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Dec 29, 2016

FSC Identifies D-SIBs for 2017

The FSC identified domestic systemically important banks (D-SIBs) for 2017: Shinhan Financial Group, Hana Financial Group, KB Financial Group, NH Financial Group and Woori Bank. Those selected as D-SIBs are required to hold an extra capital of 1%, by 0.25% per year in from 2016 to 2019. ※ The average BIS ratios for banks and bank holding companies at the end of September 2016 exceed the minimum requirements; therefore, there is no actual burden at present for D-SIBs to set aside additional capital. The FSC selects D-SIBs every year from 2016 in accordance with assessment criteria proposed by the Basel Committee on Banking Supervision (BCBS). *Please read the attached filefor details.
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Dec 14, 2016

FSC approves Korea's 1st Internet-only bank

The Financial Services Commission held its regular meeting on December 14 and granted final approval for ‘K-Bank’, Korea’s first Internet-only bank. It is the first bank newly approved in 24 years since 1992, which will spur fresh competition in the banking sector. K-Bank will start its operation in the end of January or early February 2017 (tentative) after completing preparatory works. The other internet-only bank granted preliminary approval in November 2015, Kakao Bank, is also preparing to apply for final approval in the end of this year.
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Dec 11, 2016

FSC Holds Emergency Meeting on Financial Markets after Impeachment Vote

FSC Chairman Yim Jong-yong convened an emergency meeting on Sunday, December 11 with top officials from the Financial Supervisory Service(FSS) and other relevant financial institutions to monitor market effects and discuss policy responses after parliament’s impeachment vote last Friday. The impeachment vote is likely to have a limited impact on financial markets. Major Korean indexes traded on overseas markets remained stable in early Saturday morning after Friday’s impeachment vote. However, the government will stay alert to external uncertainties including widely expected Fed rate increases and policy changes with new U.S. administration, problems in Europe’s banking sector and worries about China’s currency markets. To ensure stability and investors confidence in Korea’s financial markets, the government will extend the current 24-hour emergency response system jointly run by the FSC and FSS to all industry associations and public institutions across the financial sector. We will hold a weekly meeting to monitor market conditions and make sure swift and timely responses. Korea’s financial market and financial system have shown strong resilience as we overcame the Asian financial crisis in 1997 and the global financial crisis in 2008. Throughout this year as well, our financial markets maintained stability and firmly supported the real economy, despite external and internal uncertainties. The Korean economy’s fundamentals and creditworthiness are strong enough to respond to market uncertainties and difficulties. * Please read the attached file for details.
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Nov 24, 2016

Follow-ups on the Household Debt Management Measures Announced on Aug.25

The FSC announced follow-up measures on household debt management as the measures announced on August 25, 2016 started to show a sign of policy effects, particularly in slowing down the pace of household debt growth in the non-banking sector and collective lending. Since the August 25 measures took effect, collective lending for apartment buyers and non-residential mortgages from the mutual banking sector fell significantly. (i) The outstanding balance of collective loans remains on the rise as loans for middle payments for previously-signed contract were taken out. However, the amount of newly approved loans for middle payments to purchase an apartment sharply fell in October.(ii) The growth pace of household loans in the mutual banking sector started to slow down in November since the loan-to-value ratios on non-residential mortgages in the sector were tightened on October 31. The follow-up measures are aimed to extend tighter screening standards for loan approvals, to collective mortgages and loans from mutual finance institutions, which have been under less strict standards than bank mortgages. Guidelines for loan screening will be applied to such collective loans and mutual finance loans as well, under the principle that household debt should be borrowed within the borrower’s repayment ability and repaid in installments from the beginning.- For pre-sale of new apartments after January 1, 2017, home buyers’ collective loans to pay the remainder of the money will be subject to tighter screening standards, as currently applied to banks’ mortgages. - Mutual finance institutions will establish and implement their guidelines for screening loan applications in the first quarter of 2017. - The debt service ratio(DSR) will be used as a reference from early December whenfinancial institutions screen loan applications and assess borrowers’ repayment ability. * Please read attachedf file for details.
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Nov 22, 2016

Measures for Improvement of Derivatives Markets

The FSC announced a set of measures to make South Korea’s derivatives markets more advanced and sounder as this year marks the 20th anniversary of the establishment of derivatives markets in 1996. Key Points EXCHANGE-TRADED DERIVATIVES MARKETTo boost derivatives trading and enhance diversity of derivatives in the market, improvements will be made on both supply and demand sides. - Supply side: simplification of listing procedures, diversification of derivatives, adjustment of trading units for KOSPI200 futures and options - Demand side: flexible requirements for investors, introduction of the ‘omnibus account’ for foreign investors  OVER-THE-COUNTER(OTC) DERIVATIVES MARKETRisk management system will be established with the introduction of global regulatory standards such as margin requirements for non-centrally cleared derivatives and electronic trading platforms. DERIVATIVE-LINKED SECURITIES MARKETThe FSC will strengthen risk management and investor protection, while pursuing more diversification of products to meet various investment needs. - For ELS DLS markets, stress tests will be conducted on regular basis to strengthen risk management of securities firms. To enhance transparency in fund management, assets of ELS issuance and management will be separately managed. - Investor protection will be strengthened in ELS DLS markets with the introduction of tougher “Know-your-Product Rule” and a “cooling-off period” for investors. - Development and listings of more derivatives-linked products will be promoted as alternatives to ELS products. Detailed Measures1. EXCHANGE-TRADED DERIVATIVES MARKET Supply Side(1) Simplification of listing procedures Listings of derivatives linked to new underlying assets, which currently requires the FSC’s approval, will be streamlined. Relevant rules will be revised to allow the KRX to decide on the listings of new derivative products, while the FSC will only approve the scope of the underlying assets. (2) Di
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Nov 13, 2016

Seven Investors Were Picked to Buy Government's Stake in Woori Bank

*Please read the attached file for details.The government decided to sell its 29.7% stake in Woori Bank to seven investors on its fifth attempt to privatize Woori Bank since 2010. The seven final winning bidders and amount of shares auctioned to each bidder are as follows: Investors % of auctioned shares1 Eugene Asset Management 4.0%2 Hanwha Life Insurance Co., Ltd. 4.0%3 IMM Private Equity, Inc. 6.0%4 Kiwoom Securities Co., Ltd. 4.0%5 Korea Investment Securities Co., Ltd. 4.0%6 Mirae Asset Global Investments Co., Ltd. 3.7%7 Tongyang Life Insurance Co., Ltd. 4.0%The government would recoup KRW 2.4 trillion from this sale, recovering a total of KRW 10.6 trillion out of KRW 12.8 trillion, which is 83.4% of the public funds injected into Woori Bank. We will continue our effort to sell the remaining 21.4% in Woori Bank for a full recovery of the public funds. The sale will be closed in mid-December this year. The Korea Deposit Insurance Corporation (KDIC) will terminate its MOU with Woori, signed for helping normalizing the bank’s business operation, as soon as the sale is closed, to guarantee the new shareholders autonomy in the bank’s management.
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Nov 10, 2016

Short Selling and Disclosure Rules To Be Improved

The FSC outlined its plan to improve rules for short selling and disclosure to strengthen investor protection. Short Selling Rules1. Short sellers shorting during the period of paid-in capital increase will be barred from buying the newly-issued stocks. (Amendment proposal for the Financial Investment Services and Capital Markets Act will be submitted to the National Assembly in Q1 2017) 2. KRX will designate “overheated short-selling stocks” at the close for stocks showing extraordinary increases in short selling and sharp falls in prices during the trading hours to prohibit short-selling for those stocks on the following day. (The new rule will be implemented in early 2017 after KRX revised relevant regulations) 3. Sanctions against violation of short-selling rules will be strengthened. Those who breached short-selling rules such as prohibition of uncovered short- selling or up-tick rules will be subject to heftier fines than those imposed on other violations. (KRX will revise relevant regulation in Q1 2017)  Price manipulative activities exploiting short-selling positions will be added to types of ‘Market Disruptive Activities’ under the Financial Investment Services and Capital Markets Act. (Amendment proposal for the Financial Investment Services and Capital Markets Act will be submitted to the National Assembly in Q1 2017) 4. The deadlines for reporting and disclosure of short positions in large amounts or by shares will be shortened from the current T+3 days to T+2 days. (Relevant regulations to be implemented in Q4 2016) Disclosure Rules1. Deadlines for disclosure of technology transfer will be shortened to provide investors with timely information. (To be implemented Q4 2016)  Corrections to information of voluntary disclosure should be made by 6pm on the same day of such changes, earlier than the current deadline of the following day 6pm.  Among information currently subject to voluntary disclosure, important information that could affe
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