The amendment of the Capital Market and Financial Investment Business Act, known as the Crowd-funding Act, was passed by a plenary session of the National assembly on July 6, along with 60 other bills, including an amendment of the Financial Institution Governance Structure Law and one that allows private equity funds to be set up on a post-registration basis instead of on a prior-approval basis.
The Crowd-funding Act, advocated by both the government and the ruling party as a part of their economic recovery plans, was passed after almost two years.
The passage of the amended Crowd-funding Act is expected to be a boon for venture firms and startups, as online investment intermediaries are allowed to raise funds via online funding portals and the general public, and the firms can have easier access to each other in the investment sphere.
In the meantime, the amendment of the Financial Institution Governance Structure Law is to expand the examination of the qualification of major shareholders to cover every type of financial firm, including insurers and non-banking companies, as well as commercial and savings banks.
The amendment of the Fair Transactions in Subcontracting Act passed at this time stipulates that not only small and medium enterprises but also larger companies with annual sales of less than 300 billion won (US$264 million) can be protected by the law, as long as they are not included in the group of companies subject to the ban on cross-shareholding and are in business relations with those in the group on a consignment basis.