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| Financial Services Commission (FSC) Vice Chairman Sohn Byung-doo speaks during a meeting with private sector experts at the Korea Federation of Banks' building in central Seoul, Monday. / Courtesy of FSC |
By Kim Bo-eun
The Financial Services Commission (FSC) said Monday it would overhaul the financial regulatory system by simplifying the processes for innovative businesses to enter the financial sector and develop their services for them to operate more efficiently.
To that end, the regulator said that it will seek to streamline approval processes for simple matters such as when a foreign investment firm wishes to switch its branch to a local subsidiary, by giving the chairman the authority to approve such matters. Abstract or vague terms will be revised to provide entities a better understanding of approval processes.
Also, financial authorities will not be allowed to refuse registration for approval without grounds. Businesses will be able to receive consulting from the Financial Supervisory Service (FSS) on the approval registration process upon request.
These were part of the "financial supervision reform plan" announced jointly by the FSC and FSS Monday morning. The measures were discussed with private sector experts in a meeting hosted by the FSC following the announcement.
"We will launch a survey into how financial entities perceive financial regulations and we will seek to resolve uncertainties surrounding investment and loans concerning new industries," FSC Vice Chairman Sohn Byung-doo said at the meeting.
"If, despite the changes in the rules of the game, the supervisory authority as the referee continues to apply the same strict standards and practices, efforts for innovation in the financial sector can only shrink," he said.
Under the new initiatives, for approval processes that are extended due to entities' involvement in investigations or trials, authorities will be able to terminate the process and let the entities request approval at a later time, to reduce uncertainties that arise from the approval processes being delayed.
This is likely to be applied to the case of telecommunications firm KT, for which K bank has requested a review for its eligibility as a major shareholder of the bank. The review process has been put on hold as KT is currently undergoing a trial for allegations of having violated the fair trade act.
Authorities will also exempt financial firms supporting innovative industries from being held responsible for the losses incurred in the process unless it is found to be intentional.
Furthermore, authorities will seek to alleviate the burden for financial firms that become subject to inspections.
They will focus on areas that are considered problematic, and minimize the data the companies need to submit before the inspection, to prevent the process from affecting their operations.
The firms subject to inspection will be notified a month earlier and will be aware of the process.
Such efforts come after a comprehensive inspection for financial companies was revived this year.
The initiatives are follow-up measures for "innovative finance" that were unveiled in March.
The government will seek to revise related regulations by the end of the year. The FSC and FSS are set to hold monthly meetings to follow up on how the measures are being implemented.
