S. Korea to ease rules for brokerages

SEOUL, June 25 (Yonhap) -- South Korea's financial regulator said Tuesday it will ease rules for brokerage houses, in a move that could help the sector channel more funds into industrial sectors. Under the deregulatory move, a family-run business conglomerate, or chaebol, can have two brokerages under its wing, according to the Financial Services Commission (FSC). Currently, a chaebol is allowed to have only one brokerage unit under its wing. The FSC said it will also eliminate barriers for new players to set up brokerages. When brokerages want to expand their businesses, they are required to get approval from the FSC, but the deregulatory move will allow brokerages to expand businesses by notifying the FSC of them. At the end of last month, the number of brokerages in South Korea stood at 56. Only six new brokerages have been set up since 2010. Hwang Sae-woon, a researcher at the Korea Capital Market Institute, said the move is expected to bring a significant change in the brokerage industry. "If entry barriers to brokerages are lowered, more new players will make inroads into the sector, and it will give the industry a competitive edge," Hwang said. Financial authorities have encouraged brokerages to expand their businesses. In 2017, the FSC granted licenses to five brokerages so they can engage in investment banking businesses. The five securities firms were Mirae Asset Daewoo Securities, NH Investment & Securities, Korea Investment & Securities, KB Securities and Samsung Securities. The FSC has announced a plan that investment banks with 4 trillion won (US$3.5 billion) or more in equity capital will be eligible for short-term corporate lending. Brokerages with equity capital of 8 trillion won or more will also be able to launch investment management accounts. kdh@yna.co.kr (END)