Mirae Asset Daewoo Unshackled, Will Its Issuance Business Gain Momentum?

2 Years and 6 Months Delayed Due to Fair Trade Commission Review
Comprehensive Investment Account Business Also Expected to Proceed

[Asia Economy Reporter Song Hwajeong] With the Fair Trade Commission's sanctions against Mirae Asset Group finalized as corrective orders and fines, it is expected that the previously halted new business initiatives, including Mirae Asset Daewoo's issuance of commercial paper, will gain momentum.

On the 27th, the Fair Trade Commission decided to impose a corrective order along with a fine of 4.39 billion KRW related to Mirae Asset Group's internal transactions. The feared prosecution by the prosecution did not occur.

Mirae Asset stated, "We will make further efforts to establish a stricter compliance management culture," adding, "We have already strengthened and implemented compliance processes related to transactions among affiliates, and once we receive the Fair Trade Commission's resolution, we will actively review whether there are additional measures to be implemented."

With the conclusion of the Fair Trade Commission's sanctions, the approval process for Mirae Asset Daewoo's issuance of commercial paper, which had been delayed for two and a half years, is expected to accelerate. Previously, Mirae Asset Daewoo was designated as a super-large comprehensive financial investment business operator in November 2017 and applied for approval to issue commercial paper, but the review was put on hold due to the Fair Trade Commission's investigation. The Financial Services Commission announced in June last year the 'Reform Plan for the Financial Investment Business Licensing System to Support Innovative Growth,' stating that if the prosecution does not indict within six months for matters under investigation that are not serious crimes such as violations of the Act on the Aggravated Punishment of Specific Economic Crimes, the review will resume. Since Mirae Asset Daewoo avoided prosecution, the approval review for its commercial paper issuance is expected to resume soon.

A Mirae Asset Daewoo official said, "Since the Fair Trade Commission has reached a conclusion, Mirae Asset Daewoo will actively cooperate with the necessary tasks related to the resumption of the commercial paper issuance approval review, and once approved, will take the lead in revitalizing venture capital, a key element for capital market growth and economic re-acceleration."

It is evaluated that Mirae Asset Daewoo's entry into the commercial paper issuance business will serve as a catalyst for market activation. A securities industry official said, "Since the commercial paper issuance business is directly linked to fostering venture capital, Mirae Asset Daewoo's business entry, which can utilize the track record and experience of related entities such as Mirae Asset Venture Investment and Mirae Asset Capital, will be an opportunity to upgrade the commercial paper issuance business to the next level."

Commercial paper is a promissory note with a maturity of less than one year, issued by securities companies designated as super-large investment banks (IBs) with a capital of over 4 trillion KRW, based on their own credit. So far, three companies have been approved: Korea Investment & Securities, NH Investment & Securities, and KB Securities. The outstanding balance of commercial paper surpassed 16 trillion KRW as of the end of last month.

The launch of the Integrated Managed Account (IMA) business is also anticipated. IMA is a product created by securities companies to manage assets deposited by individual customers and pay them accordingly. Unlike commercial paper, which can only be issued up to twice the amount of capital, IMA has no issuance limit. The IMA business is only allowed for securities companies with capital exceeding 8 trillion KRW, and Mirae Asset Daewoo is the only company in Korea that meets this condition. However, it is expected that more time will be needed before the IMA business is launched. An industry insider explained, "Although it has been almost three years since the commercial paper business started, and it is time to promote the IMA business, specific details regarding the actual operation of IMA have not yet been established, so it will take time to proceed with the business."

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