The Financial Services Commission (FSC), the country’s top financial regulator, has pledged to create a favorable environment for foreign financial companies through regulatory improvements that are more in line with global standards.
The comment comes from Monday’s meeting (22/1/24) in Seoul between Kim So-young, vice chairman of the FSC, and 10 heads of foreign financial firms operating in Korea, including HSBC, JPMorgan Chase, Societe Generale, ING Bank, Merrill Lynch, Eastspring Asset Management, MetLife, Chubb, Mitshui Sumitomo and China Construction Bank.
The meeting was held to closely listen to the difficulties experienced by foreign financial companies operating in the domestic market and to discuss regulatory suggestions to improve the situation.
“When foreign financial companies increase their presence in Korea, exploring new markets and introducing new products, it greatly contributes to enhancing the competitiveness of domestic financial companies and further developing major cities in Korea into global financial hubs,” FSC Vice Chairman Kim said during the meeting, adding that securing future growth momentum through globalization is one of the most important tasks facing the financial industry.
Stressing that the globalization of the financial sector is a key factor to sustainable growth, Kim enumerated some of the major achievements by the government to make Korea’s financial regulations more investor-friendly, such as the abolition of the foreign investor registration system, reducing their investment reporting obligations, the gradual introduction of mandatory disclosures in English and the overhaul of the dividend payout system.
“The government will foster an investor-friendly stock market environment by proactively facilitating companies to improve their corporate valuations, such as providing support to companies to conduct self-assessments in the market. In addition, the government aims to address the difficulties that foreign financial companies have been experiencing by providing effective solutions to these challenges,” Kim said.
Specifically, the corporate program aided by the government to increase their value targets to address the common problem that Korean stocks often experience, where the stock prices of listed companies are undervalued compared to their corporate value. Through the program that will be launched later this year, companies are required to state their plans to enhance their corporate values in their corporate governance reports. Additional points will be given to such companies, when the authorities select a disclosure excellence corporation.
The government also plans to introduce a new stock market index as well as exchange-traded funds (ETFs) composed of companies with high shareholder value
Meanwhile, foreign financial companies that attended Monday’s meeting urged the government to actively make deregulatory moves into matters that they feel most uncomfortable with. Some of the suggestions include the obligation of verifying real names, difficulties related to capital management, and the need for regulatory improvements more in line with global practices.
The FSC said it will review the issues brought up, while holding additional meetings with each sector of the industry, including banking, investment and insurance, during the first half of this year. The authorities also plan to announce regulatory improvements related to the domestic operations of foreign financial companies later this year.
Source: TheKoreaTimes
