Transforming Securities Firms

Home > Business > Finance

print dictionary print

Transforming Securities Firms

The government will ease regulations on local securities companies' corporate financing businesses, including mergers and acquisitions, as part of its plan to develop top brokerage firms into investment banks, an official from the Financial Supervisory Commission said Friday.

"There need to be leading companies that guide the local securities securities industry according to changes in the market," the chairman of the Financial Supervisory Commission, Lee Keun-young, said in a key note speech delivered to a workshop co-hosted by the Korea Securities Dealers Association and two other trade groups.

Stressing that size matters for a brokerage firm to become a "leader," Lee urged local securities companies to draw up strategic plans to turn themselves into large investment banks through mergers or rights issues.

An investment bank helps corporations raise capital by underwriting their new issues and maintain markets for previously issued securities. It also acts as an advisory to companies.

"To become a leading company, local securities firms have to reinforce their competitiveness in the investment banking business, which is their weakest area compared with advanced overseas securities companies," Mr. Lee noted. "The regulatory commission is considering drastically easing regulations on corporate financing businesses, which hamper the shift to investment banking."

Still, he said the government will not get directly involved in deciding the companies that will be the premier institutions in this area. "The market force will make the decision," he said, stressing that the supervisory authorities will help accelerate the process by reforming the system.

He also suggested that the government is drawing up measures to integrate the Korea Stock Exchange, the Kosdaq market and the Korea Futures Exchange to improve market efficiency and prevent overlapping investments in their computer systems.

Meanwhile, Choi Woon-youl, head of Korea Securities Research Institute, proposed during his presentation that the government change the securities transactions law into a "negative" system under which brokerage firms can deal with all kinds of products except for what are banned. Currently, the Korean law adopts a "positive" system, listing what a securities company can deal with.



by Chung Jae-hong

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)