Press Releases - Financial Services Commission

Press Releases

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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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Jun 27, 2018

FSC Identifies D-SIBs for 2019

The FSC identified on June 27 four bank holding companies and one bank as systemically important banks (D-SIBs) for 2019: Shinhan Financial Group, Hana Financial Group, KB Financial Group, NH Financial Group and Woori Bank.Those identified as D-SIBs will be required to set aside an additional capital surcharge of 1% in 2019.As of March 2018, all D-SIBs have exceeded the minimum capital adequacy ratios for 2019; therefore, it is unlikely for them to face actual burden of additional capital requirement.* Please refer to the attached PDF for details.
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Jun 27, 2018

Revision to Virtual Currency Anti-Money Laundering Guidelines

BACKGROUNDThe Korea Financial Intelligence Unit (KoFIU) introduced the Virtual Currency Anti-Money Laundering Guidelines (hereinafter referred to as ‘Guidelines’) on January 30, 2018 to prevent the use of cryptocurrencies for money laundering and enhance transparency in financial transactions involving cryptocurrencies.Since then, the KoFIU and the FSS conducted inspections in April on banks for monitoring their compliance with the Guideline. Based on the results of the inspections, the KoFIU proposed a revision to the Guidelines to address some insufficiencies related with the implementation of the Guidelines.The revised Guideline, approved by the FSC on June 27, goes into effect July 10, 2018.MAJOR CHANGES► Strengthened monitoring and enhanced customer due diligence (EDD)Cryptocurrency exchanges have two types of separate bank accounts: one for collecting their customers’ money for cryptocurrency trading (hereinafter referred to as ‘money-collecting accounts’), and the other for parking their operational expenses (hereinafter referred to as ‘non-trading accounts’). Currently, only money-collecting accounts are subject to enhanced customer due diligence (EDD) by financial institutions. In order to prevent cryptocurrency exchanges from using their non-trading accounts for collecting money or other illegal activities, the revised Guidelines require financial companies to strengthen monitoring on such non-trading accounts and conduct EDD if they find any sign of suspicious transactions.1► Sharing information on overseas cryptocurrency exchangesThe revised Guidelines require financial companies to share a list of overseas cryptocurrency exchanges as well as domestic ones and strengthen monitoring on money transfer to overseas exchanges in order to prevent tax evasion or money laundering through such transactions between domestic exchanges/customers between overseas exchanges.► Clarifications in regard with rejection of transactionThe revised Guideli
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Jun 18, 2018

Draft Bill Proposed for Introduction of Regulatory Framework for Financial Benchmarks

BACKGROUNDThe FSC proposed a draft bill to introduce a regulatory framework to financial benchmarks. The new legislation was enacted in response to global regulatory moves in which major countries including the UK, EU, Australia and Japan adopted IOSCO’s Principles for Financial Benchmarks into their benchmark regulations. The extra-territorial effect of the EU Benchmark Regulation (BMR), which requires third party country administrators to be authorized by either one of the following three ways – endorsement, recognition or equivalence, prompted the need for Korea to introduce a corresponding regulatory regime in compliance with international standards. Domestically, there is a need as well for Korea to create a new regulatory regime for improving the accuracy and credibility of financial benchmarks and better protect financial consumers.Against this backdrop, the draft bill is intended to:• empower the FSC to designate financial benchmarks recognized as having a significant impact on financial markets as “significant benchmarks” to be subject to the new regulatory and supervisory framework;• stipulate conduct requirements for setting, publishing and using “significant benchmarks”; and• provide legal grounds for the FSC to impose corrective orders or penalties against any activities that could harm the accuracy and credibility of “significant benchmarks.”The proposal, open for public comments from June 18 until July 30, will be submitted to the National Assembly in September 2018.KEY PROVISIONS► Definition of a “financial benchmark”A financial benchmark is defined as a reference index used to determine the amount of payable to a counterparty of a financial contract or the value of a financial instrument; or an index used to calculate such amount or value.► Designation of a “significant benchmark”The new legislation is to empower the FSC to designate financial benchmarks recognized as having a significant impact on financial markets
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May 29, 2018

Measures to Improve Stock Trading System

BACKGROUNDThe FSC announced measures to improve the safety of stock trading system, aiming to prevent a repeat of last month’s ‘fat finger’ incident at Samsung Securities. The incident exposed systemic flaws in internal and external controls that had failed to detect and correct such an error at an earlier stage. It took 37 minutes for the securities firm to halt trading of the mistakenly issued stocks even after it recognized the error. It took almost an hour for the company to withdraw such stocks from trading accounts. Against this backdrop, the measures are intended to introduce multilayered verification systems covering the entire process of stock trading in order to minimize the likelihood of an incident from any error or mistake.MEASURES TO BE TAKEN1. CONTROLS IN STOCK TRADING SYSTEM• Securities firms will tighten internal controls over stocks coming in and out of trading accounts and cross-check with the KSD. The value and volume of stocks per deposit or withdrawal will be capped – e.g. 5% of total outstanding shares, KRW 6 billion – to prevent any possible error if the process involves manual tasks.• Before market opens for trade, securities firms will be required to verify on a daily basis whether its total balance of stocks equals the sum of stock holdings by investors. Currently, securities firms check on their total balance of stocks only, making it difficult to identify errors in each investor’s stock holdings in a timely manner.• Securities firms, the KRX and the KSD will jointly establish a monitoring system that will enable real-time tracking of changes in balance of stocks and trading volume. The monitoring system will help them identify erroneous trades or naked short sales in real time.• Securities firms will be required to introduce an “emergency button” system that would immediately halt erroneous trades by their employees, once an incident occurs.• To prevent market shocks from massive trading orders, the KRX will low
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May 23, 2018

Plan to Facilitate the Use of Movable Assets as Collateral

The FSC outlined its plan to make it easier for SMEs to borrow from banks, using their movable properties as collateral. On May 23, FSC Chairman Choi JongKu visited the Sihwa Industrial Complex, a cluster of SMEs in Gyunggi Province, to see a demonstration of how banks can utilize the Internet of Things (IoT) in tracking and monitoring movable assets offered as security – for example, factory machines. At a meeting with SME entrepreneurs on the site, Chairman Choi briefed on potential benefits of movables as collateral and FSC’s policy schemes to facilitate the use of movable assets as collateral.BENEFITS OF MOVABLE PROPERTIES AS COLLATERAL• Movable assets account for a large portion of SME’s assets so that they could serve as a useful funding source for start-ups and early-stage SMEs, which often lack immovable assets they can provide as collateral.• Movable assets grow along with the development of business, making it possible for start-ups and SMEs to use their movable property as collateral to get funds for growth capital.• A pool of movable assets, offered as a security, is less vulnerable to the volatility of business cycle and less likely to default in the event of an economic downturn.• Movable assets enable SMEs to borrow more loans at lower interest rates, compared to what they could have borrowed on credit.CURRENT PROBLEMS WITH MOVABLES AS COLLATERALDespite such benefits, movable assets have not been actively used as collateral. From a bank’s perspective, movable assets are considered to be a riskier security than immovable assets:• Movable property offered as security involves deprecation of value and difficulty of figuring out who is really entitled to the pledged asset.• They are also exposed to a risk of being damaged or lost, incurring extra expenses for monitoring and managing such collateral.• Markets in which movables offered as collateral can be traded are not sufficient enough to match supply and demand in such transaction,
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May 09, 2018

Progress in Financial Reform and Policy Tasks Ahead

FSC Chairman Choi JongKu held a press conference on May 9 to brief on progress the FSC has made in its financial reform initiatives and explain financial policy tasks ahead, on the occasion of the first anniversary of the Moon Jae-in administration.PROGRESS IN FINANCIAL REFORMIn line with the government’s policy agenda, the FSC pushed forward financial reform initiatives to achieve four major policy goals:• Enhancing trust of investors and consumers in the financial sector- The FSC outlined its plan to introduce a comprehensive supervisory framework for financial conglomerates, reflecting global supervisory principles intended to capture and manage a full spectrum of their group-wide risks.- The FSC proposed amendments to the Act on Corporate Governance of Financial Companies to address problems found in the actual practice of implementing corporate governance rules in financial companies.• Supporting the innovation-led growth of the Korean economy- A state-funded venture capital, Innovation Venture Fund, was launched in March, aiming to raise KRW 10 trillion of public and private capital over the next 3 years to finance innovative start-ups at each stage of their business cycle.- In April, the FSC completely banned the practice of requiring joint guarantee in public financial institutions, with which entrepreneurs had been burdened when making loans to start business.- Kosaq Venture Fund has attracted KRW 2.1 trillion since it was first launched in April to boost investment into Kosdaq-listed companies, as part of the FSC’s plan for vitalizing the Kosdaq market.• Expanding financial inclusion to better protect financial consumers- The FSC has written off KRW 33 trillion in long-overdue, small debt owed by financially marginalized borrowers to relieve their debt burden, helping them make a fresh start.- The FSC reduced the burden of financial cost for financial consumers by lowering statutory ceilings on interest rate, interest penalties on overdue loans a
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May 04, 2018

Regulatory Reform on Entry Barriers to Financial Services Industry

The FSC outlined its plan on regulatory reform on entry barriers to financial services business in a bid to promote competition and innovation in the financial sector. The proposal comes at a time when Korea’s financial industry is facing a paradigm shift that demands further innovation in response to the Fourth Industrial Revolution, prompting competition between incumbents and new entrants. It is the first-ever reform plan on entry barriers in 20 years since the current regulatory framework on market entry was established after the Asian financial crisis. Based on the review of the current regulations across the financial sector, the plan aims to overhaul entry requirements tailoring to the needs of each sector, encouraging innovative players to enter the market.Key Changes1. Expanding participation of private-sector expertsThe FSC will expand participation of private-sector experts in the decision-making process related to approval for new entrants. To this end, the FSC will create a 9-person committee of outside experts to evaluate competitive conditions in the financial sector on a regular basis, making it possible to make more objective and fair policy decisions.2. Lowering regulatory barriers to entryThe FSC will lower regulatory barriers to entry and reform entry-related regulations to allow ‘innovative challengers’ to enter the market.► Banking industryThe two internet-only banks, launched in 2017, are being considered to have brought positive changes to the banking sector as they has grown in size1 and promoted competition with incumbent banks. To deepen and broaden such changes, the FSC will consider allowing additional internet-only banks, if demand exists, based on reviews and evaluations of competitive conditions in the banking sector.► Insurance industryThe insurance industry is highly concentrated towards large insurers dealing with all types of life and property insurance. Such large insurers accounted for 99.5% of life insurance and 92% o
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Apr 04, 2018

Result of 2018 Annual General Meetings of Listed Companies

BackgroundThis year marked the first time that listed companies held Annual General Meetings (AGMs) of shareholders since the abolition of the so-called ‘shadow-voting’ practice at the end of last year. Under the shadow-voting system, companies were allowed to use shares registered with the Korea Securities Depository (KSD) to meet quorums to pass resolutions at AGMs. The abolition of such practice would pave the way for encouraging minority shareholders to participate in AGMs. At the same time, it could pose challenges for some companies to secure minimum quorums required to vote on resolutions at AGMs.Against this backdrop, the FSC has taken measures to boost participation of minority shareholders via electronic voting and enhance awareness of the importance of AGMs for both companies and shareholders. The FSC also launched a taskforce with securities-related institutions and business associations to provide companies with support for smooth operations of AGMs this year.Statistics of 2018 AGMsA total of 1,993 companies – 741 Kospi-listed and 1,192 Kosdaq-listed – held AGMs as of March 30. Out of which 76 companies – 5 Kospi-listed and 71 Kosdaq-listed – failed to meet quorums required to vote on resolutions at AGMs. The agenda items which fell short of minimum quorums for voting include appointment of auditor (56 companies); amendment to the articles of incorporation (8 companies); approval for financial statements (4 companies); approval for executive compensation plans (4 companies); and appointment of board directors (4 companies).Use of electronic votingThe number of companies using electronic voting decreased from 688 last year to 486 this year . Meanwhile, the number of shareholders who exercised their voting rights vial electronic voting rose to 36,000 this year, more than three times bigger than last year. The ratio of electronic votes has also more than doubled from 1.76% last year to 3.9% this year.Result of support for AGMsSecurities-related
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Mar 23, 2018

Mandatory Disclosure of Corporate Governance to be Phased in from 2019

The FSC and KRX plan to introduce mandatory disclosure of corporate governance into Kospi-listed companies with total asset value of more than KRW 2 trillion, starting from 2019, and phase it into all Kospi-listed companies over the next two years.BackgroundKorea introduced the “comply or explain” approach for corporate governance disclosure in March 2017, in which, on a voluntary basis, companies either comply with corporate governance principles, or explain publicly why if they do not comply.However, the voluntary disclosure has revealed some limitations including low participation of companies and poor quality of disclosed information, making it difficult to provide market participants with sufficient information about corporate governance such as a company’s decision-making structure and internal controls.Against this backdrop, the FSC came up with its plan to improve listed companies’ disclosure of corporate governance, based on discussions with relevant institutions including the KRX and the results of a survey conducted on listed companies.Key changes1. Mandatory disclosure of corporate governanceStarting from 2019, Kospi-listed companies with total asset value of more than KRW 2 trillion will be required to mandatorily disclose their corporate governance. The FSC considers expanding the mandatory disclosure to all Kospi-listed companies starting from 2021.※ The FSC is also considering introducing mandatory disclosure of corporate governance toKosdaq-listed companies. Details including the timing of introduction are left for further discussions.2. Guidelines on corporate governance disclosureTo improve the quality of disclosed information, guidelines will be provided to specify details of corporate governance principles that corporate governance reports must entail. That will enable investors to compare corporate governance information among listed companies and provide stakeholders with more useful information.※ The guidelines will be set out by
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Mar 15, 2018

Plan to Improve Corporate Governance of Financial Companies and Relevant Regulations

The FSC announced its plan to amend the Act on Corporate Governance of Financial Companies and its subordinate regulations, aimed to address problems found in the actual practice of implementing corporate governance rules by financial companies.BackgroundCorporate governance of financial companies calls for greater scrutiny than that of non-financial companies because financial companies run their businesses with the people’s money; and their management failures could impact the national economy as a whole.After the global financial crisis, international organizations including OECD, FSB and G20 have made proposals to improve corporate governance of financial companies.Korea has also made progress in financial companies’ corporate governance. In the wake of the Asian financial crisis in 1997, financial companies adopted outside directors and an audit committee within their board to keep the management in check. After the global financial crisis in 2008, best practice guidelines on outside directors and compensations schemes were established. All these efforts paved the way for the enactment of the Act on Corporate Governance of Financial Companies in July 2015, which came into force in August 2016.Despite these improvements, corporate governance of financial companies in practice still falls short of expectations of shareholders and financial consumers in ensuring transparency and accountability.The management often exerts undue influence on nomination of its chief executive officer (CEO) and outside directors, undermining independence and fairness in the nomination process. Such practice hinders outside directors from holding the management in check and making independent decisions.The current fit-and-proper test for majority shareholders also has more room to improve. The Act on Corporate Governance of Financial Companies introduced a periodic test into non-banking financial companies to assess their largest shareholders’ fitness and propriety; however, the
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Feb 01, 2018

Plan for Comprehensive Supervision of Financial Conglomerates

The FSC outlined its plan to introduce a comprehensive supervisory framework for financial conglomerate, one of the government’s financial reform agendas.The plan is to set out key policy tasks and principles for the supervision of financial conglomerates.ObjectivesThe comprehensive supervisory scheme is intended to capture and manage a full spectrum of their group-wide risks that conventional sectoral supervision cannot fully address. With the introduction of comprehensive supervisory framework, the FSC intends to close regulatory gaps between holding and non-holding types of financial groups by applying the same standards corresponding to their risks.The comprehensive supervisory scheme will also help prevent any possible contagion of group-wide risks into financial affiliates.Key Policy Tasks1. Comprehensive Supervisory Scheme► Scope of applicationAny group of companies with financial affiliates of KRW5 trillion or more in assets in at least two sectors of banking, insurance or securities will be subject to comprehensive supervisory rules.※ Financial holding companies, already regulated by the Financial Holding Company Act, and financial groups whose other financial business besides their main financial business is below a certain threshold (e.g. 5%) of assets or equity capital of the group or of the sector’s market share will be excluded.► Realignment of supervisory frameworkA consultative body, which consists of a group-level supervisory department and sectoral supervisory departments in the group’s financial affiliates, will be created to clarify responsibilities and facilitate coordination in group-wide supervision.► Reporting and disclosure requirementsA financial conglomerate under comprehensive supervision will be required to report its group-wide capital adequacy and aggregate risk management to the supervisory authorities on a regular basis and disclose the information to the public.2. Comprehensive Risk Management Scheme► Comprehensive r
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Jan 23, 2018

Financial Measures to Curb Speculation in Cryptocurrency Trading

The FSC announced measures that only allow cryptocurrency trading through real-name bank accounts linked to cryptocurrency exchanges and introduced a guideline to prevent cryptocurrency-related money laundering (hereinafter ‘Cryptocurrency-related AML Guideline’), as part of the government-wide efforts to curb cryptocurrency speculation and prevent cryptocurrencies from being exploited for illegal activities.Real Name Policy in Cryptocurrency TransactionsBanks will switch to real name policy starting from January 30 that only allows cryptocurrency trading through real-name bank accounts linked to cryptocurrency exchanges. Under the new rule, users who want to make cryptocurrency transactions must have a bank account under their real name at the same bank with cryptocurrency exchanges. Those who do not have their real-name account at the same bank will only be allowed to withdraw money from their existing bank account. To make new deposits, they are required to open a new bank account under their real name at the same bank with the exchanges.These are intended to make sure banks indentify their customers and comply with their anti-money laundering (AML) obligations relating to cryptocurrencies. Minors under the age of 18 and foreigners will not be allowed to open new bank accounts linked to cryptocurrency exchanges to deposit their money for cryptocurrency trading. Once the real name policy comes into force on January 30, existing anonymous bank accounts that have been used to trade cryptocurrencies will no longer be in use.Cryptocurrency-related AML GuidelineThe KoFIU and the FSS conducted joint inspections from January 1 to 16 on six commercial banks that offer bank accounts to cryptocurrency exchanges,1 and found a number of loopholes in banks’ compliance with AML regulations. Based on the results of our inspections, the KoFIU came up with a ‘Cryptocurrency-related AML Guideline’ to address such loopholes and clarify obligations and responsibilities of f
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Jan 15, 2018

Financial Policy Roadmap for 2018

The FSC announced its financial policy roadmap for 2018 outlining financial policy plans to promote innovation in finance and support innovation-led, sustainable growth for the Korean economy. We put our focus on the following four key policy tasks:- trustworthy finance with financial reforms and fair market order- productive finance to support innovation-led growth for the Korean economy- inclusive finance to better serve those underserved or marginalized- innovative finance to promote competition and innovation in financial servicesPolicy FocusI. Trustworthy financeThe FSC will continue our reform efforts across the financial sector to regain the public’s trust in finance. Financial regulators will take the lead with more transparency and credibility in our regulatory practices. We will work together with financial institutions and other market participants to reform improper business practices and ensure fair market order.► Better governance in financial institutionsThe FSC will improve governance in financial institutions to ensure transparency in CEO succession procedure; expertise and independence of external directors; and active participation of minority shareholder. Details will be announced in February.► Consolidated supervision on ‘financial conglomerates’The FSC will introduce a consolidated supervisory system on the so-called financial conglomerates, corporate groups with financial affiliates of over KRW 5 trillion in more than two sectors – e.g. insurance and securities, etc. The new supervisory scheme is designed to manage soundness and risk of financial affiliates at the group level in a systematic and consolidated manner. Details will be announced in February.► Advancement in corporate governanceThe FSC will devise policy and regulatory incentives to encourage further adoption of stewardship code by institutional investors. Mandatory disclosure of corporate governance reports will be phased in for listed companies, starting with large
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Jan 11, 2018

Measures to Vitalize Kosdaq Market

The FSC announced measures for vitalizing the Kosdaq market to support the growth of start-ups and venture businesses. The measures are aimed at overhauling KOSDAQ listing requirements, strengthening Kosdaq’s competitiveness to compete with the KOSPI market, and improving market soundness and investor trust in Kosdaq.Key Measures1. Incentives to attract institutional investors▪ A new fund of KRW 300 billion, named ‘Kosdaq Scale-up Fund’ will be created with investments by the Korea Exchange (KRX), Korea Securities Deposit and relevant securities industry organizations to invest in Kosdaq-listed companies. 1st half of 2018▪ A new market index, named ‘KRX300,’ that incorporates Kospi and Kosdaq-listed companies will be introduced. Feb. 20182. Overhaul of Kosdaq listing requirementsKosdaq listing requirements will be revised in a way that puts more focus on a company’s growth potential. 1st half of 2018▪ Some requirements that hinder listings of start-ups will be abolished. To get listed on Kosdaq under the current rules, a company must generate profits from continuing operations and shall not be in a condition of capital impairment. Such requirements actually act as obstacles to listings of start-ups. It usually takes a considerable period of time for start-ups to generate profits; and some may undergo even capital erosion in the early stage of their business.▪ Listing requirements will be eased to allow Kosdaq listing of a company if the company meets certain threshold requirements in one of three criteria: pre-tax profit, market capitalization and equity capital.▪ To facilitate more listings under the so-called ‘Tesla standard,’1 underwriters with a track record of such listings will be exempted from the rules that oblige them to buy back shares for 90% of their IPO price if retail investors exercise their put-back options within a certain period of time, from one to six months, following the IPO.3. Kosdaq’s autonomy and independenceThe K
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Jan 08, 2018

KoFIU and FSS Inspect Banks over Cryptocurrency Trading Accounts

Korea Financial Intelligence Unit (KoFIU) and Financial Supervisory Service (FSS) started to carry out joint inspections today on six commercial banks that are offering trading accounts to cryptocurrency exchanges in Korea. The inspectors will look into whether the banks comply with their anti-money laundering (AML) obligations in their transaction with cryptocurrency exchanges; and whether they have in place appropriate measures to verify their customers’ identification in regard with cryptocurrency trading.Cryptocurrencies are highly likely to be used as a means to money laundering due to their nature of anonymity and non-face-to-face transaction. Particularly, the so-called ‘virtual accounts’ offered to cryptocurrency exchanges have been making it more difficult to identify real names of account holders, and leaving cryptocurrency trading more vulnerable to crimes and money laundering. In this context, banks are required to assume a greater responsibility as gate keepers to prevent such illegal activities using cryptocurrencies.Anti-money laundering measuresIn regards to the banks’ compliance with AML obligations, the KoFIU and FSS will inspect:1. whether they have in place internal controls and risk assessment in regard with money laundering risks by cryptocurrency exchanges;2. whether they conduct customer due diligence in regard with cryptocurrency exchanges;3. whether they have faithfully fulfilled obligations to report suspicious transactions.Real name verification systemTo make sure the ‘real name’ policy in cryptocurrency trading can come into force this month, the inspections will focus on:1. whether banks have in place electronic systems to check whether the name of a deposit account holder matches that of a virtual account holder;2. whether they have in place appropriate measures to stop transactions if cryptocurrency exchanges refuse to provide customers’ information;3. whether they have in place appropriate measures to refuse transaction
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Nov 21, 2017

The 4th UK-Korea Financial Cooperation Forum Held in Seoul

The Korean Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) hosted the fourth UK-Korea Financial Forum in Seoul today with the UK Treasury, the Financial Conduct Agency (FCA) and the British Embassy. The annual event, which took place alternately in London and Seoul since 2014, has served as an occasion to deepen cooperation between the UK and Korean financial regulators and expand business opportunities for both countries’ financial companies.This year’s forum focused on new challenges facing financial services sectors in both countries: falling fertility rates, ageing population and evolving technology. These changes will bring opportunities as well as threats to the financial sector. In this context, topics of this year’s forum included “the Future of the Insurance and Pension Industries” and “How to Promote Innovation in Financial Services.” The forum was attended by Korean and UK officials, financial companies and fintech businesses.In his opening speech, Choi JongKu, Chairman of the FSC said, “The UK has traditionally been a leader in finance and continues to lead in recent trends including fintech, which provides useful policy implications for Korea.” He also stressed the importance of continued cooperation in dealing with new risks that might come from the development of digital finance.In the following session, Andrew Bailey, Chief Executive Officer of the FCA delivered a speech titled “Public Policy Challenges for Consumer Protection Regulators.” In his speech, Mr. Bailey shared the findings and policy implications from the Ageing Population Project, which the FCA launched in February in 2016 to explore how the ageing population would impact the financial services industry. He emphasized the role of financial regulators needs to evolve, corresponding to changes in financial services with ageing population.On the sidelines of the forum, FSC Chairman Choi JongKu held a meeting with UK officials including K
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