The Financial Services Commission (FSC) announced their “Financial Vision” on November 27.
Korea’s financial regulator plans to relax regulations on investment necessary for local financial firms’ overseas expansion. In particular, the FSC will permit local banks to purchase overseas financial holding companies and ease regulations about limiting local financial companies’ overseas investment for M&A and funding to establish overseas offices and boost sales. In addition, the regulator will reduce the required ratio (more than 50%) of local financial holding firms’ shares of overseas subsidiaries.
On top of that, strict regulations related to an initial public offering (IPO), such as the requirements for distribution of shares, will be eased. The required number of general stockholders for an IPO will be decreased from 1000 to 700 people, and the number of items for the qualitative examinations will be reduced by 50%.
The FSC will attempt a financial paradigm shift from loans reliant on collateral or guarantees to investments based on technology and intellectual property through an establishment of the Tech Credit Bureau. It plans to set up a separate independent rating agency equipped with personnel and resources to meet the demands of technical assessments by 2015. Detailed plans concerning the establishment of the Bureau and the development of its standards will be made within the year.
FSC Chairman Shin Jae-yoon said, “This measure will provide a lot of opportunities to financial firms that search for new markets and their roles in line with a paradigm shift. It will also motivate less active companies through competition.”