Chairman Choi Jong-gu of the Financial Services Commission(FSC).

The Financial Services Commission with the support of the Ministry of Justice and the Ministry of Economy and Finance came up with the Financial Reform Plan centered in the Future Growth Potential and Venture Capital, and the FSC announced the Financial Reform Promotion Direction on March 21 at a ceremony to officially announce the Financial Reform Declaration presided over by President Moon Jae-in.

The financial reform plan when completed as put together in the next three years will be able to supply 100 trillion won in loans and credit to reform SMEs.

Chairman Choi Jong-gu of the commission, said the financial industry should change in a reformative way in order to be able to support the reform growth of the industries in such a way as to lead the technology reform, building a financial system that can take or jointly divide up the risks, and encourage the entrepreneurial challenges and excuse the business failures as part of a new culture which we try to help to take a root in the financial industry.

One of the key areas in the reform plan is that the financial institutions can take the production facilities, inventories and the patent rights as mortgages for their loans as the future prospects and technological capacities will be as important as the financial conditions in allowing loans.

The financial reform will also ease the conditions for listing in the stock market to the level of those for the U.S. Nasdaq stock market so that around 80 firms in the areas of the bio and those in the 4th industrial Revolution will be able to be listed.

The growth support funds and others to help scale up of business firms will be expanded a great deal from 8 trillion won to as much as 15 trillion won. The conditions for listing will also be eased and the bridge between the Konex and Kosdaq markets will be widened to help more reform firms listed on the Konex market to move to the Kosdaq market,Under the financial reform plan, around 70,000 firms, either in manufacturing or service, taking up preemptive industrial reform to change their main business lines, will get help so that they can create some 170,000 new jobs.

Some 12 trillion won in extra long-term support funds will go to the SMEs in the main stream of industry. Some 60 trillion won will also be provided to the firms with great potentials in such areas as healthcare, tourism, and contents so that they can draw up programs to upgrade their industrial structures in such areas as facility expansion, M&A, and R&D, among others.

What the government has in mind in the Financial Reform Promotion Plan is to change the mortgage lending system from the Household Real Estate Mortgage System to the Future Growth Potentials and the Capital Market System to build an ecological structure to lead the reform growth sharing the risks. In order to achieve the plan, the government suggested a number of political tasks to be tailor-made for lending, capital market and policy funds.

The Financial Services Commission (FSC) is an integrated regulatory body, established on April 1st, 2011 by virtue of the Financial Services Commission Act (2010)

FSC’s main functions include those previously discharged by the former Securities Commission, Supervisor of Insurance and Pensions, and the Co-operatives Department, in so far as it relates to credit unions. The organization is therefore responsible for:

• Administering specified enactments, including the licensing or registering of financial institutions

• Supervising and regulating the operation of financial institutions

• Establishing standards for institutional strengthening, for the control and management of risk in the financial services sector and for the protection of consumers and creditors of financial institutions

• Promoting stability, public awareness and public confidence in the operations of financial institutions

A view of the building in Sejong-daero, Jongno-gu, Seoul, where FSC is located. (Photos: FSC)