Chairman Hwang Young-key of the Korea Financial Investment Association (KOFIA) said in his New Year’s message that KOFIA will strengthen asset management services this year by making a Korean-type ISA to help people expand their wealth. He said it would develop mid-level risk and profit making commodities and help people manage their retirement funds better.
The chairman urged everyone working for the KOFIA to do their best so the ISA takes a deep root in the financial market in Korea. It has many tax incentives, he said, and they should be able to help subscribers open ISA accounts and manage their assets, the entire processes, so they get all the benefits from the accounts.
The financial investment industry should strengthen its function to introduce risky funds to the capital market. “We ought to expand capital supply solutions through the private capital market centered around the private equity funds and the funds of non-listed companies to the extent that the financial investment industry would be able to help the economy overcome the low-growth problems and find new growth engines,” Chairman Hwang said.
The chairman also proposed that the financial industry sector continue to keep the public trust as a core part of its key management strategy. Investors need an environment conducive to investments, he said. “We should advance not only the laws and regulations, but the self-regulations outside the laws and regulations so that they can be advanced as those in advanced nations,” Hwang added.
Hwang also around 50 percent of global growth should be contributed by Asia and emerging market economies, and capital investments are a major force for growth. “We ought to keep making advances into those Asian countries including Indonesia and Vietnam,” he said.
The chairman also said they should develop financial products in Chinese yuan, as the currency has become one of the most important in the world, being used for SDR of the IMF and the launch of AIIB. Ultimately, he said, firms should take the initiative in offshore financing.
“We also should work to change the regulations governing the capital market to the negative system as the current regulations set up around seven years ago have yet to achieve what they set out to achieve to improve the capital market’s development,” he said. “Now is the golden time to make efforts to change them with the government in strong favor of financial regulatory reform. The government and the financial community should get together to improve the financial regulations,” the chairman added.
Despite Korea’s main stock index struggling around 2,000 points for years, 2016 is shaping up to be an encouraging year as financial authorities make financial regulatory reform in close consultation with the securities industry, rather than going on its own.
Thanks to financial regulatory reforms that were made last year, the securities industry has been able to introduce the ISA system from abroad, exclusive funds for investments overseas, and improve the management of retirement fund regulations, helping to expand earnings in the current low interest period.
Other benefits from regulatory reforms that were made last year included the expansion of integrated financial investors to provide loans to business firms, the allowance of the securities firms to conduct investment banking in addition to the securities transactions, and turning to the negative system the foreign exchange regulations, among others, Hwang said.
