Press Releases - Financial Services Commission

Press Releases

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Mar 07, 2019

Financial Policy Roadmap for 2019

The FSC laid out a financial policy roadmap for 2019 aimed at promoting financial innovation, ensuring trust in finance and securing financial stability.► Financial innovation will be accelerated as the newly-enacted laws on online-only banks and financial regulatory sandbox take effect this year. Finance will also play an active role in financing SMEs and start-ups to boost economic vitality.► The FSC will establish a consumer-oriented system in which consumers are better informed and protected. The FSC will ensure fairness and transparency to protect investors and shareholders.► The FSC will remain vigilant against potential risks with close monitoring on financial markets and active policy responses.Key policy tasks1. Financial support to boost economic vitality► The government will provide a total of KRW 4.6 trillion in government-backed loans and loan guarantees for small and medium-sized shipbuilders, equipment and auto parts manufacturers.► The government launched in January a financial support program of KRW 15 trillion over the next three years to support SME’s investment in equipment, environmental safety facilities and business reshuffling.► The FSC will overhaul financing mechanisms to enable start-ups and SMEs to borrow or raise funds based on their growth potential.2. Financial stability and pre-emptive responses► The government will continue its policy efforts to curb household debts. Last year, household debt growth slowed down to 5.8%, the lowest since 2013. The government aims to keep household debt growth this year at the similar level – above 5% to below 6%. The debt service ratio (DSR), first introduced in the banking sector in October 2018, will be adopted in the non-banking sector as well in the second quarter of this year.► The government will preemptively manage corporate debt risks with enhanced evaluation system for credit risks and market-driven corporate restructuring.► The FSC will establish a regulatory and superv
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Feb 25, 2019

Banks' Financial Payment System To Be Open to Fintech Firms

The FSC proposed its plan to establish an open banking system which would grant fintech firms access to banks’ payment network, in an effort to encourage development of new payment services and greater competition in the financial sector. The FSC also plans to overhaul the current regulatory framework on electronic financial business to promote innovation and competition in financial payment services.OPEN BANKING SYSTEM TO BE INTRODUCEDThe current financial payment network has a closed system accessible only by banks.Under the current system, even banks are allowed to process their own bank account-based transactions only. Although banks jointly launched an open API system in August 2016, the access to the API system has been limited only to small fintech firms, charging relatively high fees, about KRW400 to 500 per transaction.Against this backdrop, the transition to an open system will proceed in three phases:► [Phase 1] Banks’ voluntary agreement on open banking systemBanks agreed to open their payment network to all fintech payment service providers as well as other banks. That would enable customers to use a single application to access their accounts at different banks and make payments. Fees charged on fintech firms for using the network will be lowered to one tenth of the current level to ensure fair competition.► [Phase 2] Legislation on Open BankingThe FSC will propose amendments to the Electronic Financial Transaction Act to provide clear legal grounds for the open banking system. The amended Act will mandate all banks to offer payment service providers with standardize APIs for money transfer. It will also prohibit banks from any discriminatory action against payment service providers using their payment system in processing money transfer and charging fees.► [Phase 3] Fintech firms’ direct access to financial payment systemIn the medium to long term, the FSC will consider allowing qualified fintech payment service providers direct access to
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Feb 11, 2019

FSC to Propose a Bill on P2P Lending

The FSC plans to propose a bill on peer-to-peer (P2P) lending to help the P2P sector grow into one of innovative fintech services and provide both investors and borrowers with better protection.Since P2P lending business in Korea kicked off, the sector has been regulated under flexible guidelines, instead of a legal framework. However, the sector has grown fast in recent years, with P2P lending surging to KRW 5 trillion as of the end of 2018, from KRW 600 billion in 2016. The sector’s rapid growth prompted the need for a legal framework to properly regulate the fast-growing sector and better protect investors and borrowers. Currently, five bills proposed by lawmakers are pending at the National Assembly.Against this backdrop, the FSC held a public hearing today jointly with the Financial Supervisory Service and the Korea Institute of Finance to discuss proposals for new legislation. At the hearing, FSC Chairman Choi Jongku laid out key principles that the new bill on P2P lending needs to pursue:i. It is desirable to establish a separate new legislation for P2P lending business, rather than trying to fit into other existing laws, given the sector’s distinctiveness and innovativeness.ii. New legislation will be designed to seek a right balance between the current market practice developed in the P2P lending sector and regulatory need to prevent risks such as excessive concentration to certain assets.iii. New bill will put emphasis on protection for investors and borrowers, with measures in place to prevent P2P platforms from conflict of interest and moral hazard.iv. New bill will consider scalability and flexibility in designing its regulatory framework, in response to fast-evolving developments in P2P lending market.v. New legislation needs to be backed by the sector’s self-efforts to enhance investor trust.Based on proposals under discussion so far, the FSC will propose a draft bill on P2P lending in March for further reviews and discussions at the National As
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Jan 30, 2019

Korea Next Exchange (KONEX) to be Revitalized

FSC Chairman Choi JongKu announced a plan for revitalizing KONEX at a meeting with young entrepreneurs and venture capital investors. The plan was intended to facilitate fundraising by SMEs venture companies; boost liquidity in the KONEX market; strengthen its role of nurturing SMEs venture companies to help them move to KOSDAQ; and enhance investors’ trust in the KONEX market.BACKGROUNDKONEX was launched in July 2013 as an exchange for SMEs too small to list on the KOSDAQ market. Since then, KONEX achieved a significant growth. Its market capitalization increased almost 13 folds, from KRW 0.5 trillion to KRW 6.3 trillion as of the end of 2018. Over the same period, the number of KONEX-listed companies also increased from 21 to 153. Its daily trading value increased 12 folds, from KRW 390million to KRW 48billion. Despite the growth in size, low liquidity and the lack of price discovery function prompted the need to reform the KONEX market. Against this backdrop, the FSC intends to revitalize the role of KONEX as a springboard for SMEs venture companies to grow further and a platform for venture capital investors to exit and re-invest.Key Changes1. FACILITATING FUNDRAISING THROUGH KONEX► KONEX-listed companies will be allowed to raise funds through crowdfunding, currently limited only to non-listed SMEs, and small public offerings, which will be newly introduced as part of capital market reforms.1► Regulations that cap discount rates on newly-issues shares will be eased for KONEX-listed companies:- (public offering) If an underwriter prices new shares based on demand forecast, new share offerings will be exempted from caps on discount rates.- (third-party allocation) new shares allocated to third-parties will be allowed to offer at a further discount exceeding the current cap of 10%.► External audit standards will be eased or tailored for KONEX-listed companies to reduce their regulatory burdens.1 For further details about ‘small public offerings’, refer
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Jan 21, 2019

Follow-up Measures for Capital Market Reform

FSC Chairman Choi JongKu announced follow-up measures for capital marketreform on his visit to a venture company in the Geomdan Industrial Complex, Incheon. As part of the capital market reform proposal1 announced last November, the follow- up measures include new schemes of introducing a specialized brokerage company to facilitate investment into unlisted securities of SMEs and venture companies; and expanding a pool of professional investors.I. SME-SPECIALIZED BROKERAGE COMPANY TO BE INTRODUCEDThe FSC will introduce a new category of brokerage companies specialized in capital raising business for SMEs venture companies.Scope of businessThe new type of brokerage firms will mainly engage in brokering transactions of private and unlisted securities. They will be also permitted to engage in a broader range of corporate financing for SMEs venture companies – e.g. advisory services for securities issuance and evaluation of corporate value in regard with MAs.However, given that the business involves high investment risks, they will only be allowed to professional investors.Entry requirementTo facilitate the establishment of new specialized brokerage companies, the FSC will lower barriers to entry: newcomers will be allowed to enter the business with registration only, with the minimum capital of KRW500 million and professional workforce of two or more.Applicable regulation investor protectionThe FSC will reduce regulatory requirements, given their limited scope of business and limited impact in financial markets: they will be exempted from prudential regulations – e.g. NCR or leverage ratios; and will be allowed to submit their reports on management and financial performance on a quarterly, not monthly, basis. To protect investors, however, they will be required to have appropriate internal controls which prevent conflict of interest.ScheduleA proposal to amend the Financial Investment Services and Capital Market Act (FSCMA) will be submitted to the National Assembly
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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 24, 2018

FSC to Approve Additional Online-only Banks

The FSC announced its plans to approve additional online-only banks as the Special Act on the Establishment and Operation of Online-only Banks (hereinafter referred to as ‘Special Act’) takes effect on January 17, 2019. The Special Act allows ICT companies to own a stake of up to 34% in an online-only bank, in an attempt to boost investment and innovation led by ICT companies in the banking sector.The number of newly-granted licenses will be one or two, given the current environment of competition in the banking sector and comparison with overseas trend in the online-banking sector. A study commissioned by the FSC suggested that there is a need to introduce additional online-only banks focused on household loans, which lack competition compared to other businesses in the banking sector.Unlike traditional banks, online-only banks in principle are banned from corporate lending. However, they will be allowed to lend to SMEs.The Financial Supervisory Service (FSS) will start accepting applications for online-only banks in March and grant a preliminary approval to one or two applicants in May 2019.The evaluation of potential candidates will review their funding capability, eligibility for large shareholders, composition of shareholders, and their business plans. Details on evaluation standards will be announced by the FSS in January.* Please refer to the attached PDF for details.
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Dec 19, 2018

Large Kospi-listed Companies to make Manatory Disclosure of Key Information About Corporate Governance From 2019

The FSC approved amendments to the KRX’s Kospi Market Disclosure Regulations. The amendments are intended to make it mandatory for Kospi-listed companies with total assets of more than KRW 2 trillion to disclose key information about their corporate governance from 2019.BackgroundGood corporate governance is essential for a company’s sustainable growth, enabling investors to have confidence in the company’s future and make long-term investments. With the introduction of stewardship code, the role and responsibility of institutional investors have become increasingly important. Accordingly, investors’ demand for corporate governance transparency is growing as well. Against this backdrop, the FSC and the KRX intend to progressively turn the disclosure of corporate governance, which has been on a voluntary basis since 20171, into a mandatory requirement for Kospi-listed companies from 2019.Key amendments1. Mandatory disclosure of corporate governance informationKospi-listed companies with total assets of more than KRW 2 trillion2 are required to disclose a corporate governance report no later than two months after the statutory deadline for submission of annual reports. In the corporate governance report, companies should disclose whether they comply with key principles3 of corporate governance and explain why if they do not comply. The KRX plans to provide guidelines on disclosure of corporate governance by March 2019, which specify information that companies should include in their corporate governance report.2. Disciplinary actions for violation of corporate governance disclosure rulesThe amendments laid the ground for disciplinary actions for violation of corporate governance disclosure rules. If a company fails to disclose its corporate governance report within the deadline or makes a false disclosure, the company will be designated as an unfaithful disclosure corporation by the KRX and levied with penalty points.4 When a company makes an error or omits ke
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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 26, 2018

FSC Reforms Card Processing Fee Rates

The FSC plans to reform card fee rates as part of the government’s efforts to ease burdens on small merchants and self-employed business owners.Under the plan, credit card processing fees for small merchants with annual revenue of between KRW 500 million and KRW 1 billion will be lowered to 1.4 percent per transaction from 0.25 percent. For those with revenue between KRW 1 billion and KRW 3 billion, the rate will be lowered from the current 2.21 percent to 1.6 percent.The FSC estimates the cut will reduce an average of KRW 1.5 million in card processing fees for 198,000 merchants that generate annual revenue between KRW 500 million and KRW 1 billion. For those with annual revenue between KRW 1 billion and KRW 3 billion, falling to 46,000 merchants, the cut will save an average of KRW 2.1 million annually.The FSC also plans to create a task force with credit card companies to discuss ways to address excessive marketing expenses and strengthen their competitiveness.As “credit cards have become a dominant method of payments, accounting for 70% of private consumption, credit card companies need to pay more attention to their social responsibility and co-prosperity with merchants and consumers,” said FSC Chairman Choi Jong-ku at a meeting with CEOs of credit card companies last week.The changes in credit card process fees will take effect from the end of January 2019.* Please refer to the attached PDF for details.
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Nov 14, 2018

SFC's Final Ruling on Samsung BioLogics

The Securities and Futures Commission (SFC) ruled that Samsung BioLogics intentionally violated accounting rules by changing the accounting treatment of its stake in Samsung Bioepis from book value to fair market value in 2015.The SFC decided to recommend dismissal of Samsung BioLogics’ chief executive; impose a fine of KRW 8 billion; and refer the case to prosecutors.Samjong KPMG, Samsung BioLogics’ auditor, will be imposed a fine of KRW 170 million and banned from auditing the company over the next five years for its gross negligence; and ordered to suspend duties of involved accountants. Deloitte Anjin will be barred from auditing Samsung BioLogics over the next three years for its negligence.The imposition of a fine exceeding KRW 500 million and suspension of duties will be finally determined by the Financial Services Commission (FSC) in accordance with the Financial Investment Services and Capital Markets Act and the Certified Public Accountant Act.Upon the SFC’s ruling, the Korea Exchange (KRX) will suspend trading of Samsung BioLogics’ stocks temporarily while it reviews whether the company is eligible to remain listed.* Please refer to the attached PDF for details.
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Nov 01, 2018

FSC Proposes Capital Market Reform

The FSC proposed capital market reform initiatives aimed at facilitating financing for innovative companies through capital markets.BackgroundCorporate financing in Korea has been centered on bank loans and state-backed guarantees, dwarfing the role of capital markets. Moreover, fundraising in capital markets is tilted towards listed companies, making it difficult for unlisted companies in start-up or early-growth stages to raise capital.The proposal was designed to (i) strengthen the role of capital markets in corporate financing, balancing with loan markets; (ii) develop private capital market to provide growth capital for innovative companies; and (iii) overhaul the regulatory framework for securities firms to help them play a more active role in innovative companies’ fundraising.Reform proposal► The FSC will diversify and facilitate fundraising options for start-ups and venturecompanies (※ Details to be outlined in December 2018 and a proposal to revise the Capital Markets Act to be submitted to the National Assembly in the first quarter of 2019).▪ The scope of a private placement will be widened from “a fundraising which offers investment proposals to less than 50 investors” to “a fundraising from less than 50 investors who actually made investments.”▪ Currently, a company can raise capital of less than KRW 1billion via a small public offering, less burdened with regulatory requirements. The small public offering will be expanded to two-tier caps– a fundraising of less than KRW3 billion and one between KRW 3billion and KRW 10billion – with different levels of consumer protection measures.▪ Currently, start-ups of less than 7 years in business are allowed to raise up to KRW 700million via crowdfunding. The scope of companies will be expanded to SMEs, and the ceiling on crowdfunding will be raised to KRW 1.5billion.► The FSC will introduce a new scheme of Business Development Company (BCD), a specialized investment company to invest in u
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Oct 29, 2018

FSC Holds Meeting on Financial Market Conditions

FSC Vice Chairman Kim Yongbeom convened a meeting with representatives of financial institutions this morning to examine financial market conditions and make sure that Korea’s economic and financial conditions are well prepared to deal with the recent market turmoil.SUMMARY OF VICE CHAIRMAN’S REMARKS:► KOREA’S ECONOMIC AND FINANCIAL CONDITIONSKorea’s economic fundamentals remain strong, despite recent downward revision of growth outlook and concerns on global economic conditions.From the macroeconomic perspective, Korea’s economic growth is expected to stay well above 2%. Its current account has recorded a straight 78-month surplus. It maintains sound fiscal balance with 2.3 % of GDP in fiscal surplus. Korea’s currency exchange and CDS premium are stable compared to those of major emerging markets.From the microeconomic perspective as well, Korea’s economic and financial indices have improved since the financial crisis of 2008. Banks’ short-term external debt ratio decreased, while BIS capital adequacy ratio increased. Banks have sufficient buffer against external shocks since they had turned net creditors in 2016.The self-assessment above is in line with evaluations by credit rating firms. Moody’s, SP and Fitch maintain good credit ratings with Korea, highly evaluating its external and fiscal soundness.► POLICY RESPONSESOverall, Korea has strong fundamentals to weather the recent turmoil in domestic and global financial markets. Given its characteristics of a small open economy, however, Korea may not be immune to the effects from external and internal uncertainties. In particular, readjustment of asset prices with monetary normalization in major economies may increase volatility in financial markets.Against this backdrop, the FSC will take measures to stabilize the stock market:First, the FSC will create a KRW500 billion fund with securities-related institutions to support the stock market. Out of the fund, KRW300 billion will come from ‘Ko
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Oct 18, 2018

Debt Service Ratio(DSR) to be Introduced as Household Debt Management Standard

BACKGROUNDKorea’s household debt growth has slowed down in recent years. It is unlikely that household debt would pose a systemic risk to the Korean economy in the near future; however, the government needs to stay alert from a longer-term perspective. The sheer size of household debt would continue to grow, and its growth pace still remains high. In the mid-to-long term, the government aims to keep household debt growth rate at a level close to nominal GDP growth rate. The FSC expects the introduction of debt service ratio (DSR) rules in conjunction with other lending standards will help reduce household indebtedness and curb rapid growth of household debt.DEBT SERVICE RATIO (DSR) RULESThe DSR was introduced on a trial basis first with banks last March and subsequently across the financial sector. Based on the test operation with banks for the past six months, DSR rules will be officially introduced as standards for banks to manage their household loans starting from October 31, 2018.Banks will be required to manage “high-risk” loans below a certain percentage of their total loans. To define high-risk loans, the FSC set two-tier DSR standards: loans with a DSR exceeding 70% will be considered as “risky”; and those with a DSR of 90% or above as “highly risky.” Currently, commercial banks are better positioned than local banks and specialized banks to cut back on the proportion of high DSR loans. Loans with a DSR exceeding 100% take up 14.3% of total loans in commercial banks, compared to 30.1% in local banks and 27.9% in specialized banks. The average of DSR is also different: 52% with commercial banks, 123% with local banks, and 128% with specialized banks. Considering the gaps in compliance burden, different levels of targets will apply:► Commercial banks will be required to manage the proportion of loans with a DSR exceeding 70% (hereinafter ‘risky loans’) below 15%; and those with a DSR exceeding 90% (hereinafter ‘highly risky loans’) bel
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Oct 17, 2018

Enforcement Decree of the Special Act on the Establishment and Operation of Online-only Bank

The FSC enacted the「Enforcement Decree of the Special Act on the Establishment and Operation of Online-only Bank」(hereinafter referred to as ‘enforcement decree’). The special bill, scheduled to take effect on January 17, 2019, raised a ceiling of shareholdings by non-financial companies in an online-only bank from 10% to 34%. As delegated by the special act, the enforcement decree is to specify non-financial companies qualified for an exception to the ownership cap of 10% in an online-only bank. The enforcement decree is open for public comments from October 17 to November 26.KEY PROVISIONS► Non-financial companies qualified for an exception to the ceiling of 10% on shareholdings in an online-only bankConglomerates subject to cross-shareholding restrictions under the「Monopoly Regulation and Fair Trade Act」are not allowed to own a stake in an online-only bank in excess of 10%. However, the enforcement decree allows an exception to the 10% cap for a conglomerate whose assets of ICT business accounting for 50% or more of assets of the group’s non-financial business.► Exception to restriction on credit granting to same borrowerThe special bill limits credit granting by an online-only bank to the “same borrowers” to 20% of its equity capital, stricter than the restriction of 25% under the Banking Act. The enforcement decree provides that exceptions are allowed when such exceptions are deemed important for the national economy or would not affect the bank’s soundness.► Exception to restriction on transaction with large shareholdersThe special bill basically prohibits online-only banks from extending credit to large shareholders and acquiring stocks issued by large shareholders. The enforcement decree allows exceptions when credit granting or acquisition of stocks, originally irrelevant with large shareholders, later became transaction with large shareholders through MAs, exercise of rights to collateral, or transfer of business.► Exception to
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Sep 14, 2018

Financial Measures to Stabilize Housing Prices

The FSC announced tighter mortgage rules to curb speculative demand in the housing market, as part of the government’s measures to rein in soaring housing prices. Stricter mortgage regulations are aimed at preempting speculative demand for houses, while protecting the real demand by first-time homebuyers.FSC Chairman Choi Jong-ku said that “houses are for living in,” asking financial institutions should not serve as a supporter of speculative activities in the housing market at a meeting with chief executives of financial institutions.Details► Multiple home owners will be banned from taking out a mortgage for the purpose of purchasing a new house in the areas designated by the government as “speculative zones.”► Single home owners will also be banned from a mortgage for buying a new home in the designated speculative areas. A mortgage for additional house will only be allowed in exceptional circumstances such as home-moving or job relocation.► For high-priced houses exceeding KRW900 million, mortgages will be allowed only for residential purpose.► Public guarantee for rental deposit called jeonse will be allowed only for first-time home buyers, and single house owners with annual household income of KRW100 million or less. Owners of two or more houses will be prohibited from public guarantee for rental deposit.► Housing rental business providers will be subject to tighter mortgage rules: The loan-to-value (LTV) ratio of 40% will apply to their mortgages for buying a housing for rent in the designated speculative areas; and they will be banned from taking out a mortgage for buying a high-priced house.Implementation► New mortgage rules will apply to loan applications for new mortgages from September 14, 2018.► Changes in public guarantee for rental deposit are expected to take effect in October after public guarantors revise their relevant rules.* Please refer to the attached PDF for details.
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Sep 03, 2018

FSC Names 18 Private Firms as Fund Managers of Growth Support Fund

The FSC named 18 private firms as fund managers of the Growth Support Fund, which aims to raise KRW 3 trillion this year to support the growth of start-ups. The fund is part of the FSC’s scheme to create a financial ecosystem that funds innovative start-ups to grow into scale-ups to exits, creating a virtuous cycle of capital.The fund plans to create a total of KRW 8 trillion in three years, with public and private investments. To encourage private investors to take an active role, 60% of the fund will be financed by private investments. The fund will be invested into each league of start-ups, categorized according to business cycle: venture, growth, scale-up and rookie.* Please refer to the attached PDF for details.
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Aug 07, 2018

Regulatory Reform to be Pursued for Online-only Banks

The FSC held an event, attended by President Moon Jae-in, to assess positive changes that Korea’s two online-only banks have made and discuss challenges ahead for further financial innovation. K bank and Kakao Bank, Korea’s first-ever digital banks, have secured 7 million customers and extended loans of KRW 8 trillion since they were launched last year. They prompted fresh competition and innovation in the banking sector, which in turn would bring greater benefits to financial consumers with lower costs and more convenient services.At the event, President Moon emphasized the importance of timely actions for regulatory reform to enable online-only banks to continue to grow and evolve as a pivotal part of Korea’s fintech ecosystem. Five bills related to online-only banks have been proposed and are now pending in the National Assembly. The bills are intended to ease the current restriction that limits the ownership of a non-financial company in a bank so that IT companies could bring further innovation and capital needed for further growth of digital banks. President Moon called for joint efforts by lawmakers and government officials to make such proposals into legislation.FSC Chairman Choi JongKu also reaffirmed the government’s commitment to financial innovation and regulatory reform. To this end, the FSC will lower entry barriers to the financial sector to encourage more competition and innovation; introduce a regulatory sandbox in the financial sector; and facilitate the use of big data in financial services.* Please refer to the attached PDF for details.
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Jul 17, 2018

FSC Reshuffles Organizational Structure

The FSC plans a major organizational reshuffle to better protect financial consumers and proactively respond to financial innovation in the fourth industrial revolution era.FINANCIAL CONSUMER BUREAU TO BE CREATEDThe newly-created Financial Consumer Bureau will undertake overall responsibility for financial consumer protection, currently scattered around the sector-specific bureaus. The new bureau will also assume responsibility for household debt policy on top of microfinance policy for financially marginalized households.The current Capital Markets Bureau will be renamed as Capital Market Policy Bureau under the new Financial Consumer Bureau. The current Banking Insurance Bureau will be reorganized into Financial Industry Bureau.FINANCIAL INNOVATION BUREAU TO BE CREATEDThe new Financial Innovation Bureau will be tasked with policy initiatives for financial innovation – e.g. innovative financial services using fintech or big data and responses to new developments and challenges such as cryptocurrencies.* Please refer to the attached PDF for details.
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Jul 12, 2018

SFC's Ruling on Samsung BioLogics

The Securities and Futures Commission (SFC) on July 12, 2018 announced its ruling on Samsung BioLogics:▪ The SFC concluded that Samsung BioLogics had violated accounting standards by intentionally omitting information regarding its joint venture agreement with Biogen in its public disclosure; therefore, the SFC approved measures against Samsung BioLogics − request for dismissal of executives in charge; designation of external auditors for three years; and referral of the case to prosecutors.▪ The SFC also decided to restrict Samjong KPMG, Samsung BioLogics’ auditor, from auditing the company for four years; and report the accounting company and its accountants to prosecutors for violation of auditing standards.* Please refer to the attached PDF for details.
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