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Editorial

Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Korean TR, Finally and Officially Coming Soon

February 2019 - Finance. Legal Developments by Lee & Ko .

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Korean TR, Finally and Officially Coming Soon

Korea is finally adopting a trade repository (“TR”), which is an infrastructure that collects and stores data related to over-the-counter (“OTC”) derivatives transactions. The Financial Services Commission (“FSC”) has decided to implement the TR system by making amendments to the Regulations on Financial Investment Business (which is aligned with Article 166-2(2) of the FSCMA), instead of making amendments to the Financial Investment Services and Capital Markets Act (“FSCMA”) or its Enforcement Decree, and has approved the amendment as of January 31, 2019. As a result, the TR is expected to be activated in July, 2020 as scheduled. Korea is introducing the TR system in order to improve transparency and systematic risk management in its OTC derivatives market as part of its effort to adhere to the G20 accord.

Korean Financial Regulators Advance Legislation to Introduce Regulatory Sandbox to Spark FinTech

January 2019 - Finance. Legal Developments by Lee & Ko .

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Korean Financial Regulators Advance Legislation to Introduce Regulatory Sandbox to Spark FinTech

The 2018 year in review in Korea was notable for the sluggish overall economy, uncertainty surrounding the geo-politics and impact on Korea due to the global trade wars, on-going concerns related to the lack of jobs and unemployment, increased taxes and burdens for businesses and families, and no meaningful improvement or clarity in the current situation for 2019. In response, the Korean National Assembly passed a legislation called the Financial Innovation Support Act (the “FinISA”) on December 7, 2018 to spark the financial services industry in conjunction with FinTech products and services. The FinISA, which will soon take effect in March 2019, is intended to lay the legal foundation to introduce a regulatory sandbox for innovative financial services, where FinTech firms test their new products and services without certain regulatory oversight pursuant to exemptions for a limited period of time (“Sandbox”). As the FinISA exempts or defers application of existing finance-related regulations for new financial technology, products or services with the purpose of fostering the creation of innovative and new financial products and services, it will also support the stabilization of such services in the financial services market at the end of the testing period and is expected that the FinISA will support a revitalization of the FinTech industry which experienced sluggish growth in recent times. In particular, as companies and investors become more interested in security tokens and Security Token Offerings (“STO”) which are regulated by the Financial Investment Services and Capital Markets Act (the “FSCMA”), there have been on-going discussions and debates as to whether the FinISA could lead to a breakthrough in the crypto-asset industry based on blockchain technology. Crypto assets encompasses those assets which utilize blockchain technology where the asset is digitalized by utilization of cryptography, peer-to-peer networks and a public ledger of verified transactions resulting in a ‘units’ of such a crypto asset without any involvement by middle-persons or brokers (e.g., cryptocurrency.

Virtual Currency – Financial Regulations to Curb Speculation and Money Laundering

February 2018 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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On January 23, 2018, the Financial Supervisory Service and the Financial Service Commission published additional guidelines to regulate banking and financial transactions involving cryptocurrency exchanges (each, an "Exchange"). The key points of these guidelines are summarized below.

Virtual Currency – Enhancement of Control over Korean Cryptocurrency Exchanges

January 2018 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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On December 28, 2017, the Korean joint task force on cryptocurrency, consisting of various governmental agencies including the Office for Government Policy Coordination, Financial Supervisory Commission, the Ministry of Justice and the Ministry of Strategy and Finance, among others, announced that it will continue its implementation of its previously announced emergency measures on December 13, 2017 (for more information, please see BKL’s 12/14 newsletter), and in addition take the following actions.

Virtual Currency – Ban on Trading by Foreigners and Financial Institutions

December 2017 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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In response to the recent speculation frenzy over virtual currency trading and increase in virtual currency-related crimes, the Korean government announced emergency measures yesterday, December 13, 2017, the main points of which are summarized below:

Virtual Currency – Korean Regulatory and Legislative Developments

October 2017 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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Korean Virtual Currency Market Overview

The proliferation of virtual currencies in South Korea has resulted in a highly volatile environment for speculative and unregulated trading on the Korean virtual currency exchanges. The Korean virtual currency market remains desirable to issuers of initial coin offerings (“ICOs”), due in large part to Korea’s advanced e-commerce, online banking and P2P infrastructure being readily suited to the adaptation of blockchain technologies.

In recent months, the Korean government has shown growing interest in, and concern about, the widespread availability, sale and use of virtual currencies in Korea, particularly with regards to the potential for fraudulent or illegal activities, and the increasingly speculative nature of the Korean virtual currency market. In response, several Korean regulatory bodies including the Financial Services Commission (the “FSC”), the Financial Supervisory Service (the “FSS”) have issued proposals, guidance and directives in an attempt to formulate a regulatory response to the growing Korean virtual currency market.

Brief Introduction to Issuing QIB Securities in Korea

August 2016 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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To date, most issuance of bonds in the Korean capital markets has been focused on the public market, but in regard to issuance of bonds in the public market, there is an obligation to file a securities registration statement for investor protection purposes and there are broad disclosure obligations even during the period of secondary distribution and trading of such securities.

Korean Regulator, Encouraging Financial Institutions by Relaxing the Chinese Wall Regulations

August 2016 - Finance. Legal Developments by Lee & Ko .

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On 28 June 2016, the Korean government enacted an amendment (the "2016 Amendment") to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (the "FSCMA") which, among others, expands the exception (the “Wall-Cross exception”) to the Chinese wall regulations, i.e., restriction on the communication and exchange of information between business sectors within financial institutions (The term “financial institutions” as used in this article refers to dealers, brokers, fund managers, investment advisors, discretionary investment companies and trust companies (all of which are regulated under the FSCMA) to the exclusion of all other types of financial business entities such as merchant banks.) The 2016 Amendment seeks to enhance the competitiveness of financial institutions by allowing them to integrate activities which do not - or are unlikely to - conflict with one another, and further simplifies the regulatory scheme by removing the exceptions to the Chinese wall regulations from the Regulation on Financial Investment Business and incorporating the same in the Enforcement Decree.

[South Korea] FSC Introduces Internet-Primary Bank in Korea

August 2015 - Finance. Legal Developments by Kim & Chang .

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Introduction

From January to April 2015, the Financial Services Commission (“FSC”) operated the Internet-Primary Bank Task Force (“TF”), which was a joint private and public sector effort.  The TF reviewed related legislative bills and system reform plans regarding the introduction of the Internet-primary bank in Korea.

Comprehensive Measures to Protect Personal Data in the Financial Sector

October 2014 - Finance. Legal Developments by Shin & Kim.

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The following is a summary of the press releases made by the Financial Services Commission on 10 March 2014. These are action items and policies that the FSC and relevant ministries are seeking to implement. The following measures have developed from a series of measures previously announced since the data leakage from the three credit card companies were revealed last January.

Korean regulator bans short selling to stabilize financial markets

March 2014 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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Korean regulator bans short selling to stabilize financial markets
 

In a move to stabilize Korean financial markets that have been battered by last week's U.S. credit downgrade, the Financial Services Commission (FSC) announced on August 9, 2011 that it would impose a temporary ban on all short selling of listed securities traded on the Korea Exchange (KRX), including the main board KOSPI markets and secondary tech-heavy KOSDAQ markets.

On August 10, 2011, the KRX adopted the prohibition on short selling for three months (August 10 to November 9, 2011). At the height of the global financial crisis in 2008, a temporary ban on all short selling had also been imposed in an effort to prevent short selling from destabilizing the local bourse. In June 2009, the FSC lifted the ban at least on covered short selling of non-financial stocks.

Naked short selling is prohibited under the existing rules, so this temporary ban will have the effect of prohibiting all types of covered short selling of securities listed on the KRX such as stocks, convertible bonds, bonds with warrants, equity-linked warrants (ELWs), equity-linked funds (ETFs), warrants and beneficiary certificates (but not straight bonds).

Korean Regulator to Lift Short Selling Ban on Non-Financial Stocks

March 2014 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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Korean Regulator to Lift Short Selling Ban on Non-Financial Stocks
 

The Financial Services Commission (FSC) announced that the three-month ban on all short selling of listed securities traded on the Korea Exchange (KRX) will be lifted on non-financial stocks starting from November 10, 2011, while the ban will be maintained on financial stocks for the time being due to their greater vulnerability to external factors such as euro zone risks.

However, this remaining ban on financial stocks will not extend to short selling by liquidity providers to provide quotations, which will continue to be permitted.

On August 10, 2011, the KRX adopted a temporary ban on all short selling for three months following the U.S. credit downgrade.

 

See BKL Law Update August 11, 2011.

Proposed Rule Changes to Spur Korean Hedge Funds

March 2014 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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Planned changes to financial sector regulations expected to take effect September 2011
The Financial Services Commission (FSC) of Korea is poised to implement a slate of regulatory changes that will ease a number of the current constraints, and clarify standards, for the formation and operation of domestic hedge funds. First announced in draft form in late June 2011, the changes to the presidential decree promulgated under the Financial Investment Services and Capital Markets Act (FSCMA) are for the most part expected to be finalized in August 2011, and to take effect in September 2011. The stated aim is to spur growth in Korean hedge funds, known technically as "collective investment vehicles aimed at qualified investors." The new rules will broaden the scope of eligible investors; ease current hedge fund operating limits such as the leverage cap; finalize eligibility criteria for hedge fund managers; and permit a wider range of prime broker activity, including securities lending for short sales.

The rules remain subject to revision as they undergo final government review. The anticipated key rules, however, are as follows.
 
 
 
 

The New Covered Bonds Act of Korea

January 2014 - Finance. Legal Developments by Shin & Kim.

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A new legislative bill proposing the Covered Bonds Act (the "Act") was passed by Korea's National Assembly on December 19, 2013. This Act will come into full force and effect 3 months after its promulgation by the President, which is expected shortly. Read more...

 

Proposed Regulations on Delegation of Information Processing and IT Facilities of Financial Companie

May 2013 - Finance. Legal Developments by Shin & Kim.

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On April 16, 2013, the Financial Services Commission ("FSC") proposed draft Regulations on the Delegation of Information Processing and IT Facilities of Financial Companies (the "Regulations"). Currently, the delegation of information processing and use of offshore IT facilities are permitted on a very limited basis pursuant to the Regulations on Delegation of Businesses of Financial Institutions.

National Assembly Passes FISCMA Revision Bill

April 2013 - Finance. Legal Developments by Shin & Kim.

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On March 5, 2013, the Legislation and Judiciary Committee of the National Assembly passed a bill (the “Bill”) proposing changes to the Financial Investment Services and Capital Markets Act (“FISCMA”). The Bill introduces a clearing system for financial investment agreements and amends relevant provisions of the FISCMA to set out certain exceptions with respect to listed companies in accordance with the amendments to the Commercial Code which took effect in April, 2012. The proposed changes aim to establish sound market order while keeping pace with the needs of the rapidly changing financial industry.

Extensive Amendments to the Financial Investment Services and Capital Markets Act

January 2012 - Finance. Legal Developments by Lee & Ko .

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Paving Way for Introduction of Full-Service Investment Bank, Are under Delay

The amendments to the Financial Investment Services and Capital Markets Act (FSCMA), the first draft of which was announced in July 2011, are likely to be submitted to the National Assembly at the earliest sometime this month, which makes it unlikely for the amendments to be enacted until sometime this year.  

Appeals Court Finds KIKO Agreements Valid

October 2011 - Finance. Legal Developments by Yulchon.

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In its initial decision on the merits, the Seoul High Court has found that Knock-In, Knock-Out (KIKO) agreements are valid, despite plaintiffs' contention that such agreements should be declared null and void (Seoul High Court Decision No. 2010Na34519 dated May 31, 2011).

Changes to Options Trading Regime

February 2011 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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Regulators announce changes to options trading rules, in follow-up to plans announced in December 2010.

Appeals court affirms acquittal of company directors in prosecution for post-LBO capital reduction

February 2011 - Finance. Legal Developments by Bae, Kim & Lee LLC.

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M&A: Korean appeals court affirms acquittal of company directors in prosecution for post-LBO capital reduction and dividends

KFTC CONDUCTS EXTENSIVE INVESTIGATION ON ABUSE OF IT PATENTS

November 2010 - Finance. Legal Developments by Kim & Chang .

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On August 9, 2010, the Korean Fair Trade Commission (“KFTC”) launched an industry-wide investigation into possible abuses of patent rights in the IT industry. This is the first time that the KFTC has launched an extensive investigation into whether domestic or foreign/multinational corporations in the IT industry have abused their patent rights. According to the KFTC’s press release, 59 companies (40 domestic and 19 multinational corporations) that have direct or indirect relationships with the domestic IT industry are subject to the initial investigation.

Korea: Regulatory Hurdles to Islamic Finance

November 2010 - Finance. Legal Developments by Lee & Ko .

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Over the last couple of years, market participants in Korea have been following developments in the Islamic finance market with keen interest. They realise that becoming a direct or indirect participant in the Islamic finance market, with its huge potential for market growth, will provide them with advantages.

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Dinner with GC -
Korea 2018

  • China and Hong Kong GC Powerlist

    In May, The Legal 500 and GC Magazine added another country to the list of destinations for their exclusive Dinner with GC series, as South Korea’s elite in-house counsel came together at Mugunghwa in Seoul, for a closed-door discussion on the realities of the role.

    Dinner with GC - Korea 2018