Ontuhyeop Promotion Team Nears Completion of Self-Regulation Proposal... "To Receive Financial Authorities' Approval Next Month"

Research Service for Enhancing Consumer Trust and Mid-to-Long-Term Development Plans Underway

[Asia Economy Reporter Kim Min-young] The task force for establishing the Online Investment-Linked Finance Association is accelerating the establishment of the association by proceeding as planned with the preparation of regulations and model codes for the association's self-regulation.

The task force has been working on preparing industry regulations and model codes since March and announced on the 27th that it plans to complete the draft within this week, share it with the industry next month, and obtain approval from financial authorities.

Until now, peer-to-peer (P2P) finance companies have executed loans according to the Financial Supervisory Service’s ‘P2P Loan Guidelines,’ but starting August 27, only ‘Online Investment-Linked Finance Operators’ registered with the Financial Services Commission will be allowed to conduct P2P loans under the enforcement of the ‘Online Investment-Linked Finance Business and User Protection Act’ (OnTu Act). If not registered as an OnTu operator, P2P lending will be prohibited after a one-year grace period.

After the law takes effect, OnTu operators must comply with stringent regulations required by the OnTu Act, its enforcement decree, and related rules to maintain the high level of trust demanded in financial business. In particular, they plan to implement a high level of self-regulation to protect investors and establish sound business practices.

The OnTu industry is preparing a self-regulation plan consisting of unified disclosure standards, regulations on handling complaints and dispute resolution, operation and sanctions of the self-regulatory review committee, and advertising regulations.

The drafting of model codes such as the OnTu standard operating procedures, standard internal control standards, conflict of interest prevention system model guide, personal information protection and online information management inspection guidelines, credit business guidelines, and risk management model codes is either completed or in the final stages.

A draft of the standard terms and conditions, which define the rights, obligations, and compliance requirements among linked investors (investors), OnTu operators, and linked borrowers (borrowers), has also been prepared.

The task force plans to complete all drafts of the industry’s self-regulations and model codes by the end of this month, share them with the entire industry in June, and obtain final approval from financial authorities to enhance market trust in OnTu operators and quickly establish a virtuous cycle market structure where investors and borrowers both win.

Additionally, the task force announced that it has commissioned a research project to early establish strategies and policy tasks for enhancing financial consumer trust in OnTu and for the medium- to long-term development of the OnTu industry. Based on the results of the project, which will be completed by the end of August, plans will be announced to improve industry trust and promote medium- to long-term development in line with the enforcement of the OnTu Act.

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