Amendment to Capital Markets Act to be Submitted to National Assembly
The Financial Services Commission announced on May 7 that the Cabinet Council has passed an amendment to the Financial Investment Services and Capital Markets Act and will submit it to the National Assembly this month.
According to the amendment, every small and medium-sized enterprise (SME) can conduct securities-based crowdfunding for financing purposes whereas eight-year-old or older SMEs are currently not allowed to do so. Still, corporations with sufficient public announcement capabilities, subject to business report submission and capable of carrying out financing by small-scale public offering are not included in the expanded scope.
The bill allows brokers to provide follow-up business consulting for companies successful in securities-based crowdfunding. It also allows brokers to own non-financial subsidiaries. In addition, venture capitals are allowed to set up private equity funds for startups and venture firms.
Discretionary investment businesses can run investment consulting businesses without registration. At present, every discretionary investment business has to register itself after meeting equity capital and staff requirements in order to provide investment consulting. Compulsory fund registration cancelation is applied in the event of unlawful fund registration or modified registration and foreign fund discontinuation.