Press Releases - Financial Services Commission

Press Releases

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Apr 14, 2025

FSC Proposes Legislative Changes to Improve Regulations on Financial Holding Companies

The Financial Services Commission issued a preliminary notice of legislative changes on April 14 regarding the Financial Holding Companies Act (the Act hereinafter) and its Enforcement Decree, with aims to facilitate synergetic effects within financial holding companies and unleash more agile responses amid changing external environments. Background Financial holding companies (aka financial conglomerates) have been continuously growing since the enactment of the Act in 2000, which sought to improve the competitiveness of financial companies through enlargement and concurrent business operations, while promoting the sound management of their subsidiaries. However, despite the quantitative growth achieved thus far, it has been pointed out that their growth in qualitative terms has remained inadequate due to investment regulations and ownership restrictions. Particularly with rapidly changing environments in the financial sector, such as digital transformation and the big blur phenomena, it has become increasingly crucial to seek regulatory reforms enabling financial holding companies to more agilely and effectively cope with these changes. In this regard, the FSC has held a series of taskforce meetings and seminars with relevant stakeholders and private sector experts to draw up plans to improve rules on financial holding companies. Some of the measures that require no revision to legislation and can be enforced through authoritative interpretationsuch as the shared use of office space, sharing of information for management purpose, and expanding the scope of financial holding companies business areasbe will take effect immediately. The measure which requires a legislative revisionraising the maximum level of investment financial holding companies can make in fintech businesseswill go through a relevant amendment process. Key Revision Details Easing Financial Holding Companies Fintech Investment Limit Pursuant to the current Act, financial holding companies are allow
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Apr 10, 2025

Household Loans, March 2025

In March 2025, the outstanding balance of household loans across all financial sectors edged up KRW0.4 trillion (preliminary), growing at a slower rate compared with the previous month (up KRW4.2 trillion). (By Type) Home mortgage loans increased KRW3.4 trillion, as the pace of growth decelerated in both the banking (up KRW3.4 trillion up KRW2.2 trillion) and nonbanking (up KRW1.5 trillion up KRW1.1 trillion) sectors from a month ago. Other types of loans dropped KRW3.0 trillion, declining at a faster rate compared with the previous month (down KRW0.7 trillion) as credit loans shifted back lower from a month ago (up KRW0.1 trillion down KRW1.2 trillion). (By Sector) Household loans in the banking sector (up KRW3.3 trillion up KRW1.4 trillion) grew at a slower rate, while shifting back lower in the nonbanking sector (up KRW0.9 trillion down KRW1.0 trillion). In the banking sector, policy-based loans rose at a slower rate compared with the previous month (up KRW2.8 trillion up KRW1.5 trillion), while banks own mortgage loans increased at a slightly faster rate (up KRW0.6 trillion up KRW0.7 trillion). Other types of loans including credit loans dropped at a faster rate from a month ago (down KRW0.2 trillion down KRW0.9 trillion). In the nonbanking sector, household loans grew at a slower rate in the mutual finance sector (up KRW0.8 trillion up KRW0.3 trillion), while declining at a faster rate in the savings banks sector (down KRW0.03 trillion down KRW0.2 trillion). Specialized credit finance businesses saw household loan growth turning back down (up KRW0.3 trillion down KRW0.9 trillion), while insurance companies saw a similar level of drop from the previous month (down KRW0.1 trillion down KRW0.1 trillion). (Assessment) The outstanding balance of household loans in March 2025 rose KRW0.4 trillion, edging up at a slower rate compared with the previous month (up KRW4.2 trillion), which shows a stable trend in the pace of growth. However, the high volume of housing mark
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Apr 09, 2025

FSC Introduces Plans to Improve Competitiveness of Corporate Financing by Securities Businesses

The Financial Services Commission announced plans to improve the competitiveness of corporate financing by securities businesses on April 9. Under the newly introduced plans, comprehensive financial investment business entities (CFIBEs hereinafter) will be subject to increased credit granting limits for corporate financing and required to supply 25 percent of capital raised from promissory notes and investment management account (IMA) for venture capital. The IMA scheme, which was first introduced in 2017 but has not been utilized since, will go through improvements. Based on the improved IMA scheme, the process for designating CFIBEs that are eligible to handle promissory notes and IMA will begin within this year. Moreover, the plans contain measures to provide incentives for overseas expansion of securities firms and regulatory reforms intended to bolster the soundness management over derivatives-linked securities (DLS) and derivatives-linked bonds (DLB). In June this year, the FSC plans to prepare and announce detailed measures to strengthen the soundness of real estate financing and liquidity management by securities firms and ways to improve rules on the soundness of CFIBEs. FSC Chairman Holds Meeting with CEOs of CFIBEs On April 9, FSC Chairman Kim Byoung Hwan held a meeting with the CEOs of ten major CFIBEs and introduced the governments plans to improve the competitiveness of corporate financing by securities firms centered on regulatory improvements for CFIBEs. At the meeting, Chairman Kim and the participants discussed future directions for securities businesses in sustaining an innovative growth of our economy and promoting value-up in capital markets. In his opening remarks, Chairman Kim underscored the important role of capital markets in making sure that our economy maintains vitality and continues to grow in the future. In this regard, Chairman Kim said that the plans being introduced today are intended to boost the role of securities businesses in co
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Mar 27, 2025

FSC Introduces Plan to Facilitate Entrustment of Banking Services to Improve Consumer Access to Financial Services

The Financial Services Commission announced a plan to facilitate the entrustment of banking services to improve consumer access to financial services on March 27. Under the plan, the FSC plans to (a) establish a legislative ground for introducing bank agency services and (b) facilitate the use of jointly shared automated teller machines (ATMs) in the banking sector and the small-sum deposit and withdrawal services at convenience stores. With digital transformation rapidly taking place in the financial industry, the number of physical bank branches has been continuously declining.This declining trend has been evident not only in Korea but across the globe as it has become inevitable that online (non-face-to-face) work processes have picked up in a digital era. However, this declining trend in the number of bank branches may restrict financial access to digitally vulnerable consumer groups, such as the elderly. Thus, the proposed plan to facilitate the entrustment of banking services is expected to help address this problem and improve consumer access to financial services. Introducing Bank Agency Services Under the bank agency framework, third-party entities are authorized to provide intrinsic banking services specified under the Banking Act (deposit-taking, lending, money transfer, etc.). This allows consumers to conduct face-to-face banking businesses on-site at locations that are not bank branches. Bank agencies do not engage in all types of banking functions but instead only perform certain types of services requiring face-to-face interactions with customers on behalf of banks, such as consulting, receiving application forms, signing an agreement, etc. Other types of banking functions, such as the screening and approval of applications which require decision-making but no interaction with customers, are still directly performed by banks. Since bank agencies will perform intrinsic banking services, there will be entry restrictions, and only authorized entities wil
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Mar 24, 2025

Stock Short Selling to be Fully Reinstated from March 31

The Financial Services Commission convened an extraordinary session on March 21 and decided to fully reinstate stock short selling as previously planned from March 31. The decision has been reached as the financial authorities determined that concerns over factors undermining fair price formation in the market can be resolved with the short sale reform measures put in place thus far. To help ease the impact of reinstating short selling on certain stock items, the designation scheme for overheated short selling stockswhich restricts the short sale in the following day of individual stock items that have been subject to rapid increases in short sale orders in the previous daywill be operated in an expanded capacity until May 31, 2025. The complete resumption of short selling, which will take place for the first time in about five yearswith a newly established computerized system, is expected to help enhance the external credibility and market efficiency of Koreas stock markets. Key Details and Progress of Short Sale Reform Measures (a) From Monday, March 31, 2025, short selling becomes available for institutional investorsthat have set up required computer systems intended to prevent naked short selling (or those placing short sale orders after entering borrowed stocks into their accounts). Institutional and corporate investors can engage in short selling only if they have established relevant internal control standards. In addition, securities companies are obligated to submit short sale orders only after verifying the establishment of required computer systems and internal control standards by institutional and corporate investors. The naked short selling detecting system (NSDS) has been established at the Korea Exchange (KRX) and has been running simulations this month after conducting linked tests with institutional investors own computer systems from January to February. At the time of this release, 21 institutional investors (the number is tentative)that made up
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Mar 21, 2025

Mobile Foreigner Residence Card to be Accepted for Opening Bank Account at Six Domestic Banks from March 21

The Financial Services Commission, the Ministry of Justice, and the Ministry of the Interior and Safety announced that foreigners residing in Korea with registered IDs will be able to open bank accounts and conduct financial transactions using mobile foreigner residence cards from March 21. From January 10 this year, the Ministry of Justice began to issue mobile foreigner residence cards to those who have registered their status of residence in Korea. A mobile foreigner residence card can be obtained if the foreigner with registered status is 14 years of age or older and owns a smartphone under his or her own name. After downloading mobile ID app on their smartphones, foreign residents can obtain mobile foreigner residence cards by tagging their plastic foreign resident ID cards (integrated circuit cards) on smartphones, or by scanning the QR code with the mobile ID app. To make sure that personal ID verification is conducted safely and conveniently, the Ministry of the Interior and Safety established a blockchain-based and integrated mobile ID system and has introduced mobile IDs for drivers license (Jan. 2022), veteran ID card (Aug. 2023), and foreign resident ID card (Jan. 2025) in coordination with related ministries. The financial sector and the financial authorities have also been making relevant changes to boost the convenience and safety of consumers in their transactions with financial companies. As such, from March 21, 2025, foreign residents will be able to open bank accounts and conduct financial transactions using their mobile foreigner residence cards from six domestic banks (Shinhan, Hana, iM, Busan, Jeonbuk, and Jeju). Under the revised Immigration Act, mobile foreigner residence card is recognized as an equally valid form of ID as the original plastic ID card. The financial authorities in close coordination with the Ministry of the Interior and Safety and the banking sector have since then made changes and upgraded relevant procedures and systems to
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Mar 12, 2025

Household Loans, February 2025

In February 2025, the outstanding balance of household loans across all financial sectors increased KRW4.3 trillion (preliminary), shifting back up from the drop of KRW0.9 trillion in the previous month. (By Type) Home mortgage loans increased KRW5.0 trillion, growing at a faster rate compared with the previous month (up KRW3.2 trillion). Mortgage loans expanded at a faster rate in the banking sector (up KRW1.7 trillion up KRW3.5 trillion), while growing at a similar level in the nonbanking sector (up KRW1.5 trillion up KRW1.5 trillion). Other types of loans dropped KRW0.6 trillion, declining at a slower rate compared with the previous month (down KRW4.1 trillion), as credit loans shifted back up from a month ago (down KRW1.5 trillion up KRW0.1 trillion). (By Sector) Household loans in the banking sector rose KRW3.3 trillion, turning back up from the decline of KRW0.5 trillion a month ago. Policy-based loans grew at a faster rate (up KRW2.2 trillion up KRW2.9 trillion), while banks own mortgage loans edged up from the decline in the previous month (down KRW0.6 trillion up KRW0.6 trillion). Other types of loans including credit loans declined at a slower rate compared with the previous month (down KRW2.1 trillion down KRW0.2 trillion). In the nonbanking sector, household loans rose KRW1.0 trillion, turning back up from the decline of KRW0.5 trillion a month ago. Mutual finance businesses (down KRW0.1 trillion up KRW0.8 trillion) and specialized credit finance businesses (down KRW0.1 trillion up KRW0.3 trillion) saw household loans shifting back up from the previous month. Savings banks saw a drop of KRW0.02 trillion from the growth of KRW0.2 trillion a month ago. Household loans in the insurance sector dropped at a slower rate compared with the previous month (down KRW0.5 trillion down KRW0.1 trillion). (Assessment) The outstanding balance of household loans across all financial sectors edged up somewhat considerably in February as financial companies have begun to i
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Mar 06, 2025

FSC Vice Chairman Visits Cambodia and Philippines to Promote Cooperation and Support Overseas Expansion of K-Finance

Vice Chairman Kim Soyoung of the Financial Services Commission traveled to Cambodia and the Philippines between March 3 and 7 in an effort to promote financial cooperation with these countries and support overseas expansion of K-Finance. Visit to Phnom Penh, Cambodia Visit to National Bank of Cambodia On March 4, Vice Chairman Kim visited the National Bank of Cambodia (NBC) and met with Deputy Governor Yim Leat. Vice Chairman Kim also congratulated the signing of a memorandum of understanding (MOU) between the Korea Asset Management Corporation (KAMCO) and the NBC and showed a commitment to enhancing financial cooperation in the areas of banking regulation and strengthening the capacity for supervision. During the high-level meeting held between the two countries, the NBC requested sharing of policy experience and know-hows from the KAMCO and the Korea Deposit Insurance Corporation (KDIC) in the areas of resolution of non-performing loans (NPLs) and deposit protection scheme. In response, Vice Chairman Kim said that Korea will strengthen policy support to enhance financial cooperation between the two countries by holding an annual international financial cooperation forum (organized by The Council on International Financial Cooperation) in Cambodia next year. In addition, Vice Chairman Kim also asked for cooperation and support from the NBC regarding the complex and time-consuming nature of NPL recovery process in Cambodia, the problem that has been consistently raised by the Korean financial companies operating in Cambodia. After the high-level meeting, an MOU was signed between the KAMCO and the NBC aimed at enhancing cooperation in the area of the resolution of NPLs through sharing of experience and know-hows. In this regard, Vice Chairman Kim spoke about the importance of promptly establishing effective measures to facilitate the resolution of NPLs in Cambodia, which have been growing rapidly in the banking sector amid a slowdown in the property sector. With thi
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Feb 26, 2025

Authorities Propose Comprehensive Measures to Prevent Mis-selling of Highly Complex Investment Products

The Financial Services Commission and the Financial Supervisory Service introduced a set of measures intended to prevent mis-selling of highly complex financial investment products on February 26. Background In the aftermath of large-scale losses incurred to investors regarding the sales of Hong Kong index-linked ELS (equity-linked security) products by domestic financial companies in early 2024, the FSS prepared the guidelines for compensations on March 11, 2024, and the banking sectors compensation programs have been in progress. As a result, the numbers of compensations being paid out to investors, of cases in which investors have agreed to the terms of compensation, and of the ratio of compensation amount on average have all continued to increase between the end of June 2024 and the end of 2024. On-site inspections conducted by the FSS revealed that most bank branches had no clear distinction of counters between the ones selling highly complex financial investment products and those handling ordinary deposit-taking functions. As a result, great numbers of consumers could have been misled into believing that these highly complex financial investment products were principal-guaranteed products. Moreover, their sales practices revealed that financial companies placed a higher priority on sales performance rather than on the compliance of sales regulations. As a consequence, there was inadequate information provided to investors regarding the risk associated with highly complex financial investment products, and the sales of ELS products took place without the establishment of sufficient internal control mechanisms designed to prevent mis-selling and ensure protection of consumers. Against this backdrop, the FSC and the FSS have prepared measures to prevent mis-selling of highly complex financial investment products after having a series of meetings with related experts and industry groups. Key Measures a) Making improvements to financial investment products sales c
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Feb 18, 2025

Revised Rules under FSCMA Pave Way for Resumption of Short Sale Transactions on Schedule from March 31

The Financial Services Commission announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) at the cabinet meeting held on February 18. This revision is aimed at upgrading rules on short sale practices. Imposing a Limit on Institutional Investors Stock Repayment Period (Article 208-6) The stock repayment period for institutional investors, which shall be determined by an agreement from both lender and borrower, should not exceed 12 months in total with maximum repayment periods of 90 days for renewal each time. However, in the case of delisting of stocks or suspended trading on the final day of repayment, or when an account-to-account transfer is being restricted, the final day of repayment will be moved to three business days from the day in which the cause of the payment delay is lifted. Introducing Measures Intended to Prevent Naked Short Sale Activities (Article 208-7) Corporate entities that have plans to engage in short sales of listed stocks and securities companies that receive and place short sale orders will be obligated to comply with a set of naked short sale prevention measures. Corporate entities with a net short position balance of 0.01 percent of total issuance volume (excluding net short position balance of less than KRW100 million) or KRW1 billion or more as well as market makers and liquidity providers (institutional investors) will be subject to the following rules. First, they will be required to set up and operate electronic net short position balance management systems to facilitate item-by-item short position balance management and prevent naked short sale activities. Second, they will be required to prepare internal control standards, which should specify details about the role and responsibility of employees, short position balance management system, the recording and bookkeeping of short sale transactions details for at least five years, and the
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Feb 13, 2025

Transactions of Virtual Assets by Corporate Entities to be Allowed in Stages

Vice Chairman Kim Soyoung of the Financial Services Commission presided over the third meeting of the virtual asset committee on February 13 and held discussions with related ministry officials and private sector experts on the final policy measures aimed at allowing corporate transactions of virtual assets in the virtual asset market. At the meeting, the committee also discussed ways to bring about improvements to the best practice guidelines for listing virtual assets to help resolve the problem of listing competition among exchange service providers and reviewed the progress of regulatory reform regarding the introduction of security token offering (STO). A Roadmap for Allowing Corporate Participation in the Virtual Asset Market Background The transaction of virtual assets by corporate entities has been prohibited in principle following government regulations introduced in 2017. At the time, in comparison to transactions by individuals, the government was concerned that corporate transactions of virtual assets could pose significant threats of money laundering and market overheating. Thus, the government decided to ban corporate transactions of virtual assets to help ease the highly speculative market conditions, and as a routine practice, banks have been restricting the opening of real-name verified accounts for corporations intended for virtual asset transactions. However, with the implementation of the Virtual Asset User Protection Act from July 19, 2024, the legislative foundation has been established to provide protections for users. In addition, there have been changes in market environment with major countries around the world widely accepting corporate transactions of virtual assets and the demand for pursuing new blockchain-related business opportunities rising among domestic businesses. As such, there has been growing demand for permitting corporate entities to engage in virtual asset transactions in the domestic market. Against this backdrop, the virtu
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Feb 12, 2025

Household Loans, January 2025

In January 2025, the outstanding balance of household loans across all financial sectors declined KRW0.9 trillion (preliminary), turning back down from the growth of KRW2.0 trillion in the previous month. (By Type) Home mortgage loans increased KRW3.3 trillion, growing at a slightly slower rate from the previous month (up KRW3.4 trillion). Mortgage loans expanded at a faster rate in the banking sector (up KRW0.8 trillion up KRW1.7 trillion) but at a slower rate in the nonbanking sector (up KRW2.6 trillion up KRW1.6 trillion). Other types of loans fell KRW4.2 trillion, declining at a faster rate compared with the previous month (down KRW1.4 trillion), as the pace of decline expanded significantly in the nonbanking sector (down KRW0.3 trillion down KRW2.0 trillion). (By Sector) Household loans in the banking sector saw a similar level of decline from the previous month but shifted back down in the nonbanking sector. In January 2025, banks saw a drop of KRW0.4 trillion in household loans, showing a similar level of growth from a month ago (down KRW0.4 trillion). Government-backed policy loans increased at a slower rate (up KRW2.5 trillion up KRW2.3 trillion), while banks own mortgage loans declined at a slower rate (down KRW1.7 trillion down KRW0.6 trillion). Other types of loans including credit loans dropped at a faster rate compared with the previous month (down KRW1.1 trillion down KRW2.1 trillion). In the nonbanking sector, household loans fell KRW0.5 trillion, shifting back down from the growth of KRW2.4 trillion a month ago. Mutual finance businesses (up KRW2.2 trillion down KRW0.2 trillion) and insurance companies (up KRW0.3 trillion down KRW0.5 trillion) saw household loans edging down from increases in the previous month. Specialized credit finance businesses experienced a slower pace of decline (down KRW0.3 trillion down KRW0.01 trillion) and savings banks saw a faster rate of growth (up KRW0.1 trillion up KRW0.2 trillion). (Assessment) The outstanding balan
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Feb 05, 2025

FSC Grants Final Approval to Nextrade for Operation of ATS Scheduled to be Launched on March 4

The Financial Services Commission held a regular meeting on February 5 and granted final approval to Nextrade for operating an alternative trading system (ATS). The introduction of an ATS in domestic stock market will officially set off a multiple-exchange and competition-based stock trading system in Korea. As part of capital market reform efforts, the government first established legislative grounds for ATS in 2013 with aims to make capital market more accessible through diversification of stock market infrastructures and improvement in transaction convenience for investors. After granting preliminary approval to Nextrade in July 2023, the FSC and related organizations held a seminar on May 9, 2024 where the authorities introduced a set of measures on ATS operation and integrated market management and oversight plans. Based on diverse opinions discussed at this seminar, Nextrade took steps needed to prepare its organization and set up a trading operation and filed an application to the FSC on November 29, 2024 to obtain final approval for operating ATS. After having an external review conducted by a committee of private sector experts and going through a screening of qualifications by the Financial Supervisory Service (FSS), the FSC decided to grant final approval to Nextrade for the operation of ATS. Expected Changes in Trading Experience with Nextrade Nextrade plans to begin operating from March 4, 2025. Nextrades launch is expected to bring about increased benefits to investors, such as extended trading hours, availability of more diverse order types, and reduction in transaction costs resulting from competition over fees. The market oversight and supervisory framework will also shift to an integrated system to ensure investor protections. I. A new stock trading experience Aside from regular trading hours, which will be identically operated by both the Korea Exchange (KRX) and Nextrade, the ATS will operate pre-market (between 08:00 and 08:50) and after-market
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Feb 03, 2025

Rule Changes Proposed to Establish Legal Grounds for Fractional Investment and Allow ATS to Trade ETFs

The Financial Services Commission issued a preliminary notice of rule changes on February 3 regarding the Enforcement Decree and Enforcement Rules of the Financial Investment Services and Capital Markets Act (FSCMA) and subordinate regulations on financial investment businesses and the issuance and disclosure of securities. The rule changes being proposed address the following. First, there will be legal grounds established for fractional investment platforms issuing beneficiary certificates and securities lending intermediary platforms (both currently operate under the regulatory sandbox program). Second, trading exchange traded funds (ETFs) and exchange traded notes (ETNs) will be made possible via alternative trading system (ATS). Third, IPO bookrunners will be required to conduct due diligence and prohibited from accepting compensation outside the confines of the contract. Other rule changes include the followingmaking backdoor listing (where a larger sized non-listed firm determined by corporate value merges with a smaller sized listed firm) subject to listing review, allowing more types of foreign currency-denominated bonds (supranational bonds and Korean paper) to be included in the foreign currency repurchase agreements (repos) offered to investors, and raising the limit on retail investors over-the-counter (OTC) bond transactions in small scale, which are eligible for same-day transaction settlement (T+0), to KRW10 billion from KRW5 billion currently. The rule changes are put up for public comment until March 17 and expected to take effect from June 16 this year after going through a legislative review and a successive approval process. Establishing Legal Ground for Fractional Investment Fractional investment involves the sale of a share in underlying asset, such as real estate and intellectual property, after it has been securitized, and takes the form of public offering of securities. In general, it can take the form of issuing either non-monetary trust b
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Jan 24, 2025

Follow-Up Measures to WGBI Inclusion to Promote Global Investors' Investment in KTBs

As follow-up measures to the governments plan to revamp Korea Treasury Bonds (KTBs) and Monetary Stabilization Bonds (MSBs) Investment Frameworkannounced in December 2024 following the WGBI inclusion, the Financial Services Commission (FSC) and relevant organizations proposed revisions to the enforcement decree and supervisory rules of the Financial Investment Services and Capital Markets Act (FSCMA) and provided authoritative interpretations. The measures are intended to introduce a consolidated trading scheme for KTBs and support smooth implementation of the Global Operating Model. Introducing Omnibus Trading Accounts for KTBs The introduction of omnibus settlement accounts for KTBsin June 2024 has enabled foreign investors to settle their KTB transactions via a consolidated account, without opening individual settlement accounts with custodian banks (e.g. a Korean branch of a foreign bank). However, it still remains unclear whether foreign financial investment service providers are allowed to place consolidated orders of KTB trading on behalf of their clients such as individual funds and investors to be linked with omnibus settlement accounts for KTB transactions. To address this issue, the FSC and relevant organizations provide authoritative interpretation that foreign financial investment service providers are allowed to consolidate their clients orders to be linked with omnibus settlement accounts for consolidated settlements. To make it further clear, the FSC has proposed revisions to the Regulations on Financial Investment Business to newly introduce omnibus trading accounts for KTBs.The introduction of omnibus trading accounts will enhance the convenience for foreign investors by consolidating the overall process of KTB transactions. Under the new scheme, foreign investors will be able to place trading orders via omnibus trading accounts opened with securities firms and banks; and settle the transactions through omnibus settlement accounts opened at Korea
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Jan 21, 2025

Reform Plans for IPO and Delisting Rules

On January 21, the Financial Services Commission and related organizations including the Financial Supervisory Service (FSS), Korea Exchange (KRX), Korea Financial Investment Association (KOFIA) and Korea Capital Market Institute (KCMI) held a joint seminar on improving initial public offering (IPO) and delisting rules, as part of the governments ongoing efforts for capital market reforms. At the seminar, the FSC unveiled reform plans for IPO and delisting rules and gathered feedback from various market participants. FSC Chairman Kim Byoung Hwan delivered his congratulatory remarks outlining the background and directions of the reform plans. The Chairman said that the market structural improvement is needed to boost the overall valuation of our capital market as the government has been pushing forward capital market reform initiatives since last year. Regulatory reforms on IPO and delisting rules will be pushed forward as another major task for the value-up initiatives, he emphasized. In regard with the IPO market, Chairman Kim said that reform plans will incentivize institutional investors to hold shares for a longer period under a lock-up commitment, which will help shift the IPO market more towards investments based on corporate value. Reforms will also strengthen the roles and responsibilities of underwriters for determining appropriate IPO prices and securing mid-to-long-term investors, he added. Regarding the delisting rules, Chairman Kim explained, the authorities will strengthen the requirements for companies to remain listed and streamline delisting procedures so that companies undermining market trust can be timely removed without delay. Along with this, Chairman Kim suggested that the government will consider overhauling the stock market structure to make it more efficient and provide stronger investor protection. We will seek differentiation and linkage between market segments so that companies can raise funds in the market tailored to their growth stage
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Jan 15, 2025

Household Loans, December 2024

Household Loans in 2024 In 2024, the outstanding balance of household loans across all financial sectors went up KRW41.6 trillion (preliminary), growing at a faster rate compared with the end of the previous year (up 2.6 percent). * Change (in trillion KRW, y-o-y): +112.3 (2020), +107.5 (2021), -8.8 (2022), +10.1 (2023), +41.6 (2024P) (By Type) Mortgage loans increased at a faster rate compared with the previous year (up KRW45.1 trillion up KRW57.1) led by the banking sector. Other types of loans fell at a slower rate over the same period (down KRW35.0 trillion down KRW15.5). (By Sector) Household loans grew at a faster rate in the banking sector compared with the previous year (up KRW37.1 trillion up KRW46.2 trillion), while declining at a slower rate in the nonbanking sector (down KRW27.0 trillion down KRW4.6 trillion). Mortgage loan growth from banks stayed at a similar level from a year ago (up KRW51.6 trillion up KRW52.1 trillion). Other types of loans from banks continued to decline but at a slower rate compared with the previous year (down KRW14.5 trillion down KRW5.9 trillion). Household loans in the nonbanking sector rose in the specialized credit finance (up KRW3.2 trillion), savings banks (up KRW1.5 trillion), and insurance (up KRW0.5 trillion) sectors, but declined in the mutual finance (down KRW9.8 trillion) sector. Household Loans in December 2024 In December 2024, the outstanding balance of household loans across all financial sectors rose KRW2.0 trillion (preliminary), growing at a slower rate compared with the previous month (up KRW5.0 trillion). (By Type) In December, mortgage loans from banks rose at a slower rate compared with the previous month (up KRW4.0 trillion up KRW3.4 trillion). Other types of loans turned back down from the growth a month ago (up KRW1.0 trillion down KRW1.4 trillion). (By Sector) Household loans shifted back lower in the banking sector from the growth in the previous month (up KRW1.9 trillion down KRW0.4 trillion), but in
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Jan 08, 2025

FSC's Annual Work Plan for 2025

The Financial Services Commission presented annual work plan for 2025 at the annual work report session jointly held for economic ministries under the theme of economic risk management and revitalization of the economy on January 8. With market stabilization at the top of policy priorities, the FSC plans to work on strengthening the function of financial services in support for peoples livelihoods while continuing to push for innovation in the financial industry. The FSCs annual work plan for 2025 is focused on three key goals(a) ensuring market stability and providing support for the real economy, (b) facilitating a recovery in peoples livelihoods, and (c) adapting to changes and promoting innovation in the financial industry. Under these broad objectives, the FSC plans to pursue nine specific policy agendas. Key Policy Agendas First, the FSC will work on ensuring market stability and providing support for the real economy. In close cooperation with related authorities and organizations, the FSC plans to establish an overarching framework that can help to ensure financial market stability through an array of measures, such as the continuing operation of market stabilization programs (about KRW100 trillion), introduction of financial stability account for financial companies, making improvements to the recovery and resolution regime of financial companies, and raising deposit protection limit to KRW100 million from the current level of KRW50 million. In addition, the FSC will continue to manage the pace of household debt growth within the level of annual GDP growth through the enhanced debt service ratio (DSR) rules and seek regulatory improvements on real estate project finance loans to prevent the recurrence of project finance loan defaults by strengthening the equity capital requirement for developers. At the same time, in order to bolster support for the real economy and industries, the FSC plans to expand the supply of policy funds to the largest level ever (KR
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Dec 24, 2024

Rule Changes on Treasury Stocks of Listed Companies Scheduled to Take Effect from December 31

The Financial Services Commission announced that the government approved the revision bill for the Enforcement Decree of the Financial Investment Services and Capital Markets Act at the cabinet meeting held on December 24. The upgraded rules on treasury stocks of listed companies will go into effect from December 31, 2024. Background Treasury stocks are considered as an important mechanism for shareholder return alongside dividends. However, in Korea, companies often acquired treasury stocks to bolster the control of their major shareholders. To address this problem, the government had prepared measures to upgrade rules on treasury stocks as a way to strengthen protection for ordinary shareholders and which constitute a part of broader efforts at reforming capital market regulations. In particular, this year, with the expansion of Corporate Value-up Program and growing number of market participants and companies showing interest in enhancing shareholder value, the volume of treasury stock acquisitions and cancellations by listed companies has risen to the highest level in seven years, increasing about 2.3 times and 2.9 times, respectively, compared with the previous year. Thus, the rule changes on treasury stocks of listed companies are focused on facilitating the voluntary efforts of listed companies in enhancing protection for ordinary shareholders and boosting value for shareholders. Key Revision Details The proposed rule changes are intended to (a) restrict the allocation of new shares to treasury stocks when companies spin-off business units, (b) strengthen disclosure requirements, and (c) close loopholes and remove regulatory arbitrage throughout the process of acquiring and disposing treasury stocks. First, allocating new shares to treasury stocks will be prohibited when companies spin-off their business units. When it comes to treasury stocks, currently, almost all shareholders rights, such as voting rights, dividend rights, and preemptive rights, are non-ex
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Dec 19, 2024

FSC Chairman Holds Meeting to Review Business Financing Conditions and Discuss Response Strategies

Chairman Kim Byoung Hwan of the Financial Services Commission held a meeting to review business financing conditions and response strategies with officials from policy financial institutions and related businesses on December 19. The meeting was held to collect opinions from businesses and to preemptively respond to concerns about business financing conditions amid the continuation of foreign exchange market volatility and uncertainties at home and abroad. The following is a summary of Chairman Kims remarks. A Summary of Chairmans Remarks Despite recent political situations, business financing market situations are largely showing signs of stability. However, there exist concerns about deteriorating conditions due to various factors at home and abroad. Therefore, it is necessary that authorities come together with policy financial institutions and commercial banks to discuss ways to alleviate concerns in the market. To this end, first, the government will continue to carry out what needs to be done to address market anxiety. Authorities will postpone the introduction of stress capital buffers and improve the ways in which risk weights are calculated to help ease the banking sectors burden of their soundness management and to facilitate an expansion of business financing activities. In addition, the government will closely work with the National Assembly to ensure prompt passage of economic legislations. Authorities will also work to ensure the supply of policy financing support effectively. After taking into account opinions from related ministries, authorities will prepare plans for supplying policy funds for next year and provide adequate funding support to key strategic sectors. Authorities will also work to boost investment support for future growth sectors and businesses equipped with innovative technologies. In preparing their business plans for next year, commercial banks are asked to pay particular attention to the stabilization of the real economy. In this
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