Toss Securities Establishment 'Countdown'... FSC Preliminary Approval Resolution

[Image source=Yonhap News]

[Asia Economy Reporter Park Jihwan] Viva Republica, the operator of the simple remittance service 'Toss,' is entering the final stage of establishing a securities company.

The Securities and Futures Commission under the Financial Services Commission announced on the 11th that it approved Viva Republica's preliminary license application for establishing a securities company at its regular meeting.

This comes nine months after Viva Republica applied for a preliminary license for financial investment business to establish a securities company in June last year.

The business Viva Republica applied for is investment brokerage, which involves buying and selling stocks, bonds, and other securities with investors' consent.

During the Financial Supervisory Service's review process of Viva Republica's preliminary license application, the review was temporarily halted due to concerns about unstable capital structure. The financial authorities pointed out that 75% of Viva Republica's capital of 13.4 billion KRW consisted of Redeemable Convertible Preferred Stocks (RCPS).

RCPS are stocks that allow investors to exercise redemption rights under certain conditions and are a common capital-raising method for startup companies. However, the financial authorities judged that RCPS, which have debt-like characteristics, cannot be considered true capital and that such a capital structure is inappropriate for securities businesses. In response, Viva Republica held an extraordinary shareholders' meeting in November last year and converted all previously issued RCPS into convertible preferred stocks.

Viva Republica's establishment of a securities company is expected to be finally approved at the Financial Services Commission's regular meeting on the 18th. Afterward, within six months, they must equip physical and human resources and apply for the final license. Once approved, they can begin securities operations.

If Viva Republica establishes a securities company, it will become the second fintech securities company following Kakao Pay Securities, which entered the securities business earlier this year by acquiring Baro Investment & Securities.

This content was produced with the assistance of AI translation services.