Chairman Choi Jong-gu of Financial Services Commission delivers his speech at a ceremony to celebrate the 21st anniversary of the Capital Market Research Institute on Sept. 4 at Conrad Hotel in Seoul. (Photo: FSC)

Chairman Choi Jong-gu of the Financial Services Commission (FSC) said he will aim for drastic financial deregulation to open financial access to reform business firms, startups and SMEs.

The FSC chairman made the statement during a keynote speech at a ceremony to celebrate the opening of the Capital Market Research Institute on Sept. 4 at Conrad Hotel in Yeouido, Seoul.

He said the FSC will reform the financial regulations for small firms and startups to secure loans easily so they have wide-open access to capital market funding. He said he will touch up regulations on the securities firms to expand their roles to introduce the financial transactions to their clients.

Choi said the FSC will revise financial regulations to ensure more autonomy and responsibility of the initial public offering (IPO) market so securities firms might be able to help SMEs and startups secure more funds.

He said the lead managers will have more autonomy in setting the initial prices of the shares of firms for IPOs, while the regulations dealing with the dividend declaration will be softened.

He said listed firms secured 42 trillion won last year from the capital market, while non-listed firms got only 672.3 billion won, and he will revise financial regulations to open up capital markets to the non-listed firms.

Choi also said he will ease regulations on private equity by boosting funds secured via cloud funding and the amounts of small funds that can be raised at the Konex market.

He also said the 49 Men Rule will be eased to the extent that only investors will be counted among those who joined the private equity fund, not those who said they will join later, so that the fund would not have problems when the would-be-investors change their minds and decide not to join later.

Financial authorities pledged to improve regulations to help strengthen cooperation between direct or internet-only banks and financial-technology or "fintech" corporations, during a meeting held among fintech leaders at the Kakao Bank headquarters in Seongnam-si, Gyeonggi-do Province, on July 23.

“It is necessary to redesign the support and restriction system for fintech corporations through continuous communication and cooperation between fintech companies and the government,” said Financial Services Commission Chairman Choi Jong-gu.

“Cooperation between internet-only banks and fintech companies is becoming tangible, as you can see from online transactions without certificate verification, 24-hour banking, and app-to-app payments,” said the chairman. “We will devise the ways to support the fintech industry by easing restrictions on improving system and financial support, and on helping with international expansion.”

“Internet-only banks, such as Kakao Bank and K Bank, have been providing convenient services through innovative financial technology over the past year,” said Choi. “Please keep up with your active role as pioneers and as pivots in the fintech industry.

The number of regulations governing South Korea’s financial sector has been creeping up, raising concern at the possible damage to the country’s goal of becoming a world economic power.

The number of regulations rose from 918 in 2009 to 1099 in September this year, an increase of almost 20 per cent in five years, according to a recent report by Kim Jong-hoon, a South Korean lawmaker and member of the country’s National Policy Committee. Kim’s report is based on data provided by South Korea’s Financial Services Commission.