On Jan. 25, SK FSC, SK FSS said revisions re capital markets passed.
SK FSC, SK FSS said revisions to the Capital markets actfor strengthening regulations on quasi-investment advisory business have been passed at the National Assembly.
Follows SK FSS Oct. 2022 warned consumers on stock leading rooms, see #102483.
Revisions
Only registered investment advisors are permitted to run a stock leading room on a paid membership basis, through online interactive channels such as social networks.
Quasi-investment advisory businesses are permitted to conduct business only via one-way channels, such as chat rooms where recipients cannot chat, in accordance with their original purpose of providing investment advice to unspecified number of people.
Quasi-investment advisory businesses are required to report change in executives to SK FSC, prohibited from guaranteeing profits or compensation for losses to consumers.
When conducting advertising, quasi-investment advisory firms are required to inform customers that they cannot provide individual advice, and of possible loss of principal.
Market entry will not be permitted if a business has violated consumer protection laws, including Act on door-to-door sales, in addition to financial laws and regulations.
Expanded the reasons for ex officio business cancellation of ineligible companies.
Effectiveness
The revised act will be implemented six months after promulgation.
In Apr. 2024, SK FSC proposed revisions for sound sales practices, see #207283.
Apr. 2024 Guidance
On Apr. 8, 2024, SK FSS published guidance on the application for conversion to investment advisory businesses, for quasi-investment advisory businesses.
In accordance with the revised act, which prohibits quasi-investment advisory businesses from sales practices via interactive channels from Aug. 14, 2024.
SK FSS will conduct a collective registration review for quasi-investment advisory businesses which intend to convert themselves to investment advisory businesses.
Applicant businesses must submit an application via SK FSS website by May 13, 2024, after fulfilling legal requirements, such as equity capital and professional manpower.
Regulators
SK FSC; SK FSS
Entity Types
IA
Reference
Gd, PR, 4/8/2024; Dec, Mt, PR, 1/25/2024; Law 19531, 7/11/2023; Law 19566, 7/18/2023; Law 20305, 2/13/2024; FSCMA;
