ID :
197187
Tue, 07/26/2011 - 07:23
Auther :
Shortlink :
https://oananews.org//node/197187
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S. Korea set to introduce big investment banks
By Lee Minji
SEOUL, July 26 (Yonhap) -- South Korea will seek to permit the establishment of large homegrown investment banks within this year, which will engage in financing mergers and acquisitions and trading in unlisted stocks, the financial regulator said Tuesday.
Under a revision bill to the capital market law, brokerages with an equity capital over 3 trillion won (US$2.8 billion) will be allowed to become investment banks, the Financial Services Commission (FSC) said. The average equity capital of the country's top five brokerages stood at 2.7 trillion won as of end-March.
The FSC said it expected the law revision to bolster direct financing of small and mid-size companies and support local firms' efforts to secure funds for major overseas project deals.
The regulator plans to start receiving public comment on the law amendment before submitting the bill to the National Assembly for approval in October.
"The revision bill is aimed at countering the changes in the global financial environment following the 2008 global financial crisis and bolstering the local capital market," Hong Young-man, a standing commissioner at the FSC, said in a press conference.
Last week, FSC Chairman Kim Seok-dong told reporters that a new policy direction on the capital market law is essential in creating the future of the local financial industry, adding that the regulator will strive to ensure that the capital market law will create explosive energy as originally planned.
South Korea enforced the capital market law in 2009 to help create globally competitive financial giants by abolishing regulatory barriers banning brokerages from pursuing future trading and other asset management operations. Market watchers, however, had highlighted the need to update the act to reflect changes in the global financial environment.
The revision bill also calls for allowing the establishment of an alternative trading system (ATS) in a bid to beef up global competitiveness of the Korea Exchange (KRX), the nation's sole bourse operator.
The introduction of ATS is projected to cut trading costs and increase investment options for investors, which is likely to spur market competition and reinforce the KRX's competitiveness, the watchdog said.
The FSC also said the introduction of ATS is an inevitable global trend. Around 120 alternative trading systems are in operation across the world, with stock trading via ATS accounting for 42 percent of all stock trading in the United States. However, stock trading via ATS reached only 1 percent in Asia last year.
Meanwhile, the financial regulator also pledged to step up investor protection by tightening regulations and expanding penalty policies on unfair market practices. The country's regulation on unfair practices, such as stock price manipulation, is weak compared to other countries, it said.
mil@yna.co.kr
(END)
SEOUL, July 26 (Yonhap) -- South Korea will seek to permit the establishment of large homegrown investment banks within this year, which will engage in financing mergers and acquisitions and trading in unlisted stocks, the financial regulator said Tuesday.
Under a revision bill to the capital market law, brokerages with an equity capital over 3 trillion won (US$2.8 billion) will be allowed to become investment banks, the Financial Services Commission (FSC) said. The average equity capital of the country's top five brokerages stood at 2.7 trillion won as of end-March.
The FSC said it expected the law revision to bolster direct financing of small and mid-size companies and support local firms' efforts to secure funds for major overseas project deals.
The regulator plans to start receiving public comment on the law amendment before submitting the bill to the National Assembly for approval in October.
"The revision bill is aimed at countering the changes in the global financial environment following the 2008 global financial crisis and bolstering the local capital market," Hong Young-man, a standing commissioner at the FSC, said in a press conference.
Last week, FSC Chairman Kim Seok-dong told reporters that a new policy direction on the capital market law is essential in creating the future of the local financial industry, adding that the regulator will strive to ensure that the capital market law will create explosive energy as originally planned.
South Korea enforced the capital market law in 2009 to help create globally competitive financial giants by abolishing regulatory barriers banning brokerages from pursuing future trading and other asset management operations. Market watchers, however, had highlighted the need to update the act to reflect changes in the global financial environment.
The revision bill also calls for allowing the establishment of an alternative trading system (ATS) in a bid to beef up global competitiveness of the Korea Exchange (KRX), the nation's sole bourse operator.
The introduction of ATS is projected to cut trading costs and increase investment options for investors, which is likely to spur market competition and reinforce the KRX's competitiveness, the watchdog said.
The FSC also said the introduction of ATS is an inevitable global trend. Around 120 alternative trading systems are in operation across the world, with stock trading via ATS accounting for 42 percent of all stock trading in the United States. However, stock trading via ATS reached only 1 percent in Asia last year.
Meanwhile, the financial regulator also pledged to step up investor protection by tightening regulations and expanding penalty policies on unfair market practices. The country's regulation on unfair practices, such as stock price manipulation, is weak compared to other countries, it said.
mil@yna.co.kr
(END)
