KOFIA Promotes Measures to Stabilize Private Equity Fund Market... "Restoring Trust in Capital Markets is Top Priority"

Supplementary Support Plan for Advancing Financial Tax System Modernization Direction

Na Jae-cheol, Chairman of the Korea Financial Investment Association, is explaining the key tasks to be promoted in the second half of the year at the 'Korea Financial Investment Association Press Corps Summer Meeting' held on the 16th at the Federation of Korean Industries Building in Yeouido, Yeongdeungpo-gu, Seoul.

[Asia Economy Reporter Kum Bo-ryeong] The Korea Financial Investment Association (KOFIA) is promoting measures to revitalize the private fund market to restore trust in the capital market. Along with this, it will also support the enhancement of the direction for advancing the financial tax system.

At the "KOFIA Press Corps Summer Meeting" held on the 16th at the Federation of Korean Industries building in Yeouido, Yeongdeungpo-gu, Seoul, Na Jae-cheol, chairman of KOFIA, stated, "Restoring trust in the capital market will be our top priority."

First, to promote the soundness of the private fund market, manuals and checklists for internal control of professional private fund managers will be created and distributed. This means that fund managers themselves should compare their existing systems to a universal standard. Through a full survey of compliance, consulting support will be provided to those with identified vulnerabilities. KOFIA is continuously consulting with financial authorities on strengthening roles such as mutual monitoring and checks between Prime Brokerage Services (PBS), which handle dedicated brokerage tasks for professional private fund managers, distributors, and fund managers.

Chairman Na emphasized, "Private funds are products that pursue profits with originality and autonomy as their key features, so we will strive to introduce internal control enhancement measures at a reasonable level," adding, "The financial investment industry also believes it is time to evaluate itself more objectively and prepare response measures for greater advancement."

KOFIA will also strengthen its self-regulation on private funds. While self-regulation has so far been centered on non-face-to-face (untact) methods, on-site inspections will be increased going forward. KOFIA holds the authority to investigate its member companies.

To shift individual investment demand toward the fund market, efforts will be made to revitalize public offering funds. Public offering funds have been criticized for relatively lacking policy support compared to private funds. KOFIA plans to actively support government policies by researching and reviewing alternatives to meet direct overseas stock purchase demand and ways to enhance the functions of advisory and sales channels in cooperation with financial authorities.

Regarding the financial tax system advancement direction announced by the Ministry of Economy and Finance, KOFIA will support necessary improvements. Chairman Na said, "We highly evaluate the innovativeness and direction of the financial tax system advancement plan," but also explained, "There are still areas that need improvement." The incomplete abolition of securities transaction tax was identified as the most needed improvement. The lack of a basic deduction applied to collective investment schemes also remains an issue from the investor's perspective.

Additionally, KOFIA will continue consultations with the National Assembly and financial authorities to re-promote the introduction of default options and fund-type systems related to retirement pension system innovation. Plans include expanding financial consumer education across all age groups and strengthening financial consumer protection. Furthermore, measures to revitalize the over-the-counter market for supplying venture capital will also be examined.

Chairman Na stated, "We believe the capital market is now entering a full-fledged growth era," and added, "KOFIA will improve the overall structure and strengthen the fundamentals of the capital market so that all participants can grow together."

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