Korea’s FSC alters rules to promote business expansion overseas of FIs

Korea’s Financial Services Commission (FSC) has approved a set of regulatory revisions to help facilitate financial institutions’ overseas operation and investment activities.

According to the FSC, the measures are aimed at promoting financial institutions’ overseas business expansion by easing some of the reporting and filing duties when investing overseas through a foreign direct investment or a branch office.

In the new revisions, FDIs made through offshore funds in the amount of up to $20m annually will be exempted from the advance reporting requirement. Prior to this, FDIs through foreign funds were subject to the advance reporting requirement regardless of the investment amount. This rule will be changed to enable ex-post factor reporting within a month for FDIs of $20m or less.

Financial firms investing in equity shares of foreign funds will also no longer be required to file a report whenever their shareholding status changes due to changes in investments made by other shareholders.

In addition, financial firms will be exempted from reporting any change in their ownership status after making initial investment when there is no change to be reported in the actual amount of their investment.

Meanwhile, some of the ordinary business operations by offshore branch offices – such as stock trading, loan transactions and real estate – will no longer be subject to the advance reporting requirements.

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