61 bills passed to boost economy

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61 bills passed to boost economy

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A total 61 bills supporting President Park Geun-hye’s pledge to revitalize the sagging economy were passed unilaterally by the ruling Saenuri Party, including a new law allowing individuals to invest in start-ups.

The revised Financial Investment Services and Capital Markets Act - or the so-called crowd-funding act - is one of the most notable bills passed Monday, aimed at supporting start-ups in order to boost the economy and create new jobs for young people.

The act allows start-ups to raise initial capital through an online brokerage site, giving individual investors opportunities to support small companies.

Considering the riskiness of investing in start-ups, the Financial Services Commission (FSC) will restrict each individual to putting no more than 5 million won ($4,412) into the same company per year.

To prevent major shareholders from luring small investors and then dumping their own stock, the company’s owner and major shareholders will be prohibited from selling shares within a year of issuance.

The act also includes eased regulations on establishing and operating private equity funds (PEF).

Until now, the establishment of a PEF required prior approval from the government. Under the new law, PEFs only need to be reported to the government within two weeks of their launch.

Protection for small- and medium-sized enterprises (SME) will be strengthened as well.

The revised version of the Fair Transactions in Subcontracting Act, proposed by the Fair Trade Commission, will protect 3,846 medium-sized companies that were not receiving assistance from the government while doing business with conglomerates.

Under the new law, conglomerates that have subcontracts with the companies are legally obligated to pay for services within 60 days of their rendering.

If the conglomerates delay, they will be required to make additional payments to the companies.

About 57.4 percent of medium-sized businesses in the country subcontract for conglomerates, according to a survey by Korea Institute for the Advancement of Technology in November 2013.

A bill to reduce television ads for private loan companies was also passed, to prevent “the public’s impulsive acquisition of excessive loans,” according to the FSC.

Under the revised Act on Registration of Credit Business and Protection of Finance Users, ads for loan companies will be prohibited between 7 and 9 a.m., 1 and 10 p.m. during weekdays, and 7 a.m. to 10 p.m. on the weekend.

It is not the first time that the Korean government has restricted television ads for certain products.

Ads for alcohol are banned from 7 a.m. to 10 p.m. every day. Commercials for “hazardous media content for teenagers,” such as adult-only movies, music and concerts are also prohibited between 7 and 9 a.m., 1 and 10 p.m. during weekdays, and 7 a.m. to 10 p.m. on weekend and holidays.


BY KIM HEE-JIN [kim.heejin@joongang.co.kr]

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