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FSC chairman promises fintech funding support

Policy reform was also mentioned as a way to boost development

Sept 19,2019
Eun Sung-soo, Financial Services Commission chairman, right, talks to a fintech developer at D.Camp in Seolleung, Gangnam, southern Seoul on Wednesday. [NEWS1]
A 300 billion won ($252 million) fintech fund is being formed by the government to invest in start-ups and boost the emerging sector.

To be built up over a four-year period, it will be organized by the Financial Services Commission (FSC) and will receive investment from the private sector, including Korea’s commercial banks.

Korea’s top financial regulator said it will also look into making changes in regulations to help fintech companies list on the stock exchanges so they may more easily access the markets for growth capital.

These initiatives are just two elements of the so-called fintech “scale-up” strategy that the FSC is planning to reveal next month.

“In order to vitalize the fintech industry, we needed to establish a virtuous cycle of people starting companies, receiving investments and selling those investments to investors, which will lead to reinvestment,” said Financial Services Commission chairman Eun Sung-soo.

“We are preparing for the creation of a 300 billion won fund that is centered on the private sector.”

FSC chairman Eun, who assumed office earlier this month, visited the D.Camp, which is hosted by the Banks Foundation for Young Entrepreneurs, in Gangnam, southern Seoul, on Wednesday.

It was his second official field visit, and follows a visit to parts and material manufacturers on Tuesday.

The Moon Jae-in government since March has emphasized the “scaling-up” of start-up companies, which basically means boosting start-ups to become major global players with policy, more accessible financing and regulatory reforms.

The FSC chairman also noted changes to regulations for the listing of companies on the stock exchanges to reflect the characteristics of fintech start-ups.

“There have been comments supporting an exclusive listing process, the same as the ones applied to biopharmaceutical [start-ups] in order to vitalize the growth of fintech,” Eun said.

The FSC in 2016 eased the standards for evaluating biopharmaceutical companies seeking to be listed and traded publicly on the secondary Kosdaq market.

Liberalizations included allowing the largest-shareholder to own less than 20 percent of the company’s equity.

Additionally, the reforms also lowered the mandatory period in which the largest-shareholder should maintain their shareholding.

The FSC chairman said on top of investments the government will continue on its regulatory reforms.

“We will focus our policies on nonstop regulatory innovations, vitalization of fintech investments and overseas expansion,” Eun said.

He said the government through the financial regulation sandbox was able to create 42 innovative financial services.

“I, too, use mobile payments when going to a convenience store and install various [fintech] apps,” Eun said. “I can feel the potential of fintech in our daily lives.”

“But instead of feeling satisfied with the achievements we have achieved as of today, we still have a lot to do, and especially we have a long way in changing the fundamental landscape of the financial industry.”

He stressed that among Korean fintechs only one is considered a unicorn company.

“We are all waiting for the emergence of a fintech company that will lead and tow the fintech market and [financial] industry ecosystem,” Eun said.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]


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