On May 30, SK FSC, SK FSS issued no-action statements for PF loan.
SK FSC, SK FSS issued no-action statements for the first round of temporary financial de-regulation concerning the real estate project finance (PF) soft landing policy.
Follows SK FSC, FSS May 2024 issued real estate project finance policy, see #211738.
No-Action Statements
Granted special immunity under the Regulations on examination and sanctions against financial institutions, to financial firms undertaking liquidation/restructuring of PF project sites lacking viability, supplying funds to project sites which can be normalized.
Temporarily relaxed the net capital ratio (NCR) to 60%, for domestic residential real estate loans newly handled by comprehensive financial investment business operators.
Where a securities house converts a real estate debt guarantee as of the end of Mar. 2024 into a loan, the NCR risk value has been relaxed to 32% until Dec. 31, 2024.
If savings banks exceed the investment limit for collective investment securities as a result of normalizing non-performing loans for real estate project finance, they will be exempt from disciplinary actions under article 24 of the Mutual savings banks act.
They are also exempt from disciplinary actions if they violate the mandatory credit ratio within business area by less than 5%, during the resolution of bad loans.
Where an auction is held for a real estate project site that has previously participated in a joint loan, some provisions of the model standard for joint loans may be excluded.
Plan
SK FSC, SK FSS will complete the remaining measures required for temporary financial de-regulation by end-Jun. 2024, including classification of asset soundness as normal when supplying new funds, and rationalization of K-ICS for PF normalization support.
Recognition of repurchase agreement sales for the purpose of liquidity management before, after PF loans, and the relaxation of business evaluation standards.
SK FSC and FSS will identify additional incentives, implement de-regulation measures, by making revisions to the relevant regulations and issuance of no-action statements.
Effectiveness
The no-action statements are valid until Dec. 31, 2024.
In Jun. 2024, SK FSC, FSS held 2nd meeting on real estate PF soft landing, #214750.
In Jul. 2024, SK FSC, SK FSS issued remaining no-action statements, see #217705.
Regulators
SK FSC; SK FSS
Entity Types
B/D; Bank; CU; Ins; Inv Co
Reference
PR 5/30/2024; Reg, Nt 2023-22, 5/2/2023; Law 19564, 7/18/2023
