 Choi Soo-hyun serves as deputy governor of the Financial Supervisory Service, and head of Fn Hub Korea. |
By Choi Soo-hyun
First Senior Deputy Governor/ Head of Fn Hub Korea
“Four cities to look at when planning to open an overseas branch in a few years,” and “three financial centers with promising prospects.” Which cities do you think they are?
One of them is none other than Seoul. Published by the U.K.-based consulting firm, the Global Financial Centers Index (GFCI) is an index that tracks the changing perceptions of cities as financial centers.
Seoul’s GFCI ranking moved up 37 notches in two years from 53 in March 2009 to 16 in March 2011. The staff of Fn Hub Korea are prouder than ever to say Korea is progressing toward becoming a financial center in Northeast Asia.
Fn Hub Korea was established within the Financial Supervisory Service (FSS) in September 2008. Fn Hub Korea’s functions differ from those generally undertaken by the FSS, however. While the latter assumes a “watchdog” role in managing and inspecting the business lines of domestic and foreign financial companies, Fn Hub Korea takes on a “facilitator” role to support foreign companies’ operations in Korea and help Korean companies expand abroad.
This facilitator role makes our relationship with financial companies a horizontal partnership, and we strive to think from their perspective to help resolve regulatory issues or difficulties in operations.
We maintain a close relationship with our clients so that they can ask for our help whenever needed.
We help foreign financial companies set up a presence in Korea and help the businesses of those already operating here in various ways. One example is our one-stop service.
Under a one-stop system, we process as fast as we can all grievances, recommendations, questions and requests from receipt to delivery.
As their requests are channeled through Fn Hub Korea, financial companies do not need to visit individual departments or organizations in person.
We assign a staff member to each foreign financial company wishing to do business in Korea, helping them throughout the process of business set-up and providing information on licensing procedures and requirements.
The lack of reliable information in English that reflect the rapid changes in the market and the demands of supervisory authorities can greatly hamper foreign companies from entering Korea and make the business of those already present difficult.
It took a lot of time and investment for foreign businesses to understand Korean laws and policies as legislation or sets of policies/procedures related to market entry and business operations were unavailable in English.
To resolve this problem, Fn Hub Korea has translated all finance-related laws and regulations into English _ for the first time _ which was completed in 2009. Subsequent revisions are continuously updated on a regular basis. We have also published a licensing guide in English, which explains the licensing procedures for each type of financial business and key criteria.
This has helped foreign financial companies get a clearer picture of the requirements for setting up business in Korea. In a thank-you letter, the Foreign Bankers’ Group said it has become much easier for companies to do business in Korea.
We keep numerous channels of communication open for our foreign clients. We listen to their difficulties and recommendations through working group meetings, CEO workshops, and walk-in or scheduled visits in our office, or travel to our clients’ office in person to offer “visiting services.”
Meanwhile, Fn Hub Korea is also engaged in identifying and resolving regulations that differ from global standards and deemed unreasonable by foreign businesses. One such example is related to the rule requiring foreign financial companies to run a DB server for OTC derivative operations in their branch office. Though global financial companies use their headquarter facilities for OCT derivative transactions, they couldn’t do so in Korea due to local regulations.
We decided that something had to be done, so we set up a joint working group comprising of the relevant divisions of FSS and foreign banks.
Following four months of meetings, the working group agreed to a set of guidelines that would satisfy both sides. The market hailed this as a significant move away from old practices to a best practice of market-friendly procedures, which would further accelerate mutual understanding between the authorities and market players.
Serving as landmarks of Korea’s international financial hub status, Seoul International Financial Center (SIFC) in central Seoul is slated for completion in 2011 to 2012 and Busan International Financial Center (BIFC) in the Munhyeon district of the southern port city in 2013.
All the staff of Fn Hub Korea will strive to make the financial clusters around SIFC and BIFC the “Shangri-La of Finance” where local and foreign players can operate on a level playing field while enjoying a free and creative business environment.
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