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| Financial Services Commission Chairman Choi Jong-ku, second from right, speaks during a meeting on boosting the capital market at Korea Financial Investment Association's headquarters in Seoul, June 25. Yonhap |
By Park Hyong-ki
The country's regulator has extended the scope of its financial deregulation for securities and asset management companies to boost the capital market.
In a June 25 meeting with executives from such sectors in Seoul, Financial Services Commission (FSC) Chairman Choi Jong-ku said the agency will lower entry barriers for launching securities companies that can offer a wide range of investment services.
It will abolish a rule that had prohibited a financial group from owning and running more than one securities firm.
A group can spin off a unit within its existing securities company to set up another one focusing on providing a different service. A group can acquire another securities firm, or set up a new one.
"We will change and simplify our licensing system to spur competition in the capital market," Choi said.
Newcomers can also easily join the sector and offer a wide range of investment services, Choi said.
Previously, the regulator only allowed entry of a new company that could offer a differentiated and specialized service such as real estate investment.
This comes as the regulator seeks to divert investors and funds from the real estate market to the capital market so small innovative companies can finance their research and commercialization.
Choi said the capital market has not functioned properly in the economy, nor has it helped create jobs as in the United States.
Also, small companies here have mostly relied on bank loans as the capital market has been too centered on big listed companies, with few investors eyeing smaller companies with high potential.
"We must prepare to make changes ahead of an aging society and the Fourth Industrial Revolution," the chairman said.
The regulator will apply the same scope of deregulation on asset management ― no more rule that says one asset management company for one financial group.
Rules will be further relaxed, enabling young and old asset management companies to change their private equity funds into public funds and allowing them to raise more capital from retail investors.
