Fund Redemption Suspension, Quick Notification via Text Message Starting Next Year

[Asia Economy Reporter Koh Hyung-kwang] Investors in public offering funds will be able to receive notifications of ad hoc disclosures such as redemption delays via text message or mail starting next year. Until now, notifications were only sent by email, but financial authorities have supplemented this.

The Financial Services Commission announced that the amendment to the Capital Markets Act, which includes improvements to the ad hoc disclosure regulations for public offering funds, passed the Cabinet meeting on the 29th.

Until now, fund distributors have been criticized for inefficiency by notifying investors via email or posting on the websites of asset management companies, distributors, and the Korea Financial Investment Association, as well as at the headquarters, branches, and sales offices of asset management companies and distributors. However, starting next year, according to the amendment, the methods of notifying investors will diversify to include text messages and mail. The amendment also includes provisions that exclude certain matters, such as changes in fund managers and resolutions of collective investment meetings, from notification obligations if the investor does not wish to receive them.

Sanctions have been established for cases where the general partner of management participation private equity funds (PEFs) violates accounting standards. The share acquisition limit applied when a public offering fund invests in another fund will increase from 20% to 50%. It is also clearly stipulated that securities issued through crowdfunding (online small investment brokerage) can be electronically registered.

The reporting deadline to the Financial Services Commission for fund termination has been relaxed from "without delay" to "within the 10th of the following month." The amendment also includes reductions in public offering fund settlement documents, application of diversification investment regulations based on the issuer of underlying assets when investing in securitized securities of public offering funds, and rationalization measures for financing regulations of real estate development trusts. A Financial Services Commission official stated, "The amendment approved at today's Cabinet meeting is scheduled to be submitted to the National Assembly in January next year," adding, "The government will make active legislative efforts to ensure the amendment is promptly processed by the National Assembly."

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