Expansion of Crowdfunding Professional Investor Scope to Include Startup Entrepreneurs and Others

[Asia Economy Reporter Park Jihwan] A proposal to include startup planners (accelerators) within the scope of specialized investors in crowdfunding is being promoted. Additionally, the obligation for trust companies to keep accounting audit reports for two years will be replaced by disclosure on their websites.

On the 7th, the Financial Services Commission announced changes to the Financial Investment Business Regulations and the Regulations on the Issuance and Disclosure of Securities reflecting these points. This follows the review of a total of 96 administrative rules in the asset management sector last September, of which 24 were decided to be improved.

According to the revised regulations, startup planners (accelerators) will be included in the scope of specialized investors in crowdfunding. Those who perform investment and nurturing tasks for early-stage startups within three years of establishment are targeted. This measure considers their expertise in investing in startup companies. Previously, the scope was limited to specialized investors and those with expertise and risk-taking ability.

Regulations on self-dealing transactions between trust assets will also be relaxed. Self-dealing refers to transactions where trust assets managed by the same trust company simultaneously sell and buy assets between each other. Currently, such transactions are exceptionally allowed only under strict conditions to prevent conflicts of interest between investors and trust companies, such as difficulties in disposal through the securities market. The proposed change allows self-dealing if both trust asset beneficiaries explicitly agree and the investor judges the transaction to be favorable to themselves.

Currently, securities firms acting as agents for foreign fund sales must report domestic sales status monthly to both the Financial Supervisory Service (FSS) and the Korea Financial Investment Association (KOFIA). To reduce the burden of dual reporting, the reporting target will be unified to the FSS.

Also, the existing obligation for trust companies to keep accounting audit reports on trust assets available for beneficiaries to inspect at headquarters and branches for two years will be revised to allow disclosure on the trust company's website.

Along with this, an exception clause for the education method of quasi-investment advisory firms will be established. Currently, those who wish to become quasi-investment advisory firms must attend group education related to quasi-investment advisory business conducted by the Korea Financial Investment Association. The proposed change allows online education to replace group education in cases where attending group education is difficult due to unavoidable reasons such as natural disasters.

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