Financial Services Commission Announces Legislative Notice for 'Geumsan Act Amendment' Introducing Self-Normalization and Insolvency Resolution Plans

[Asia Economy Reporter Kwangho Lee] From now on, large banks and financial holding companies will be required to submit self-rescue plans to financial authorities in preparation for management crisis situations.

The Financial Services Commission announced on the 18th that it will give prior notice of a partial amendment to the Enforcement Decree of the "Act on the Structural Improvement of the Financial Industry," which includes the obligation to submit such self-rescue plans.

The law, promulgated on December 29 last year, stipulates that from June 30 this year, financial institutions designated as "financial institutions important to the financial system" must prepare self-rescue plans to restore soundness in preparation for management crisis situations. The plan must be submitted to the Financial Supervisory Service within three months after the designation of the important institution.

This amendment to the enforcement decree was prepared to specify matters delegated by the amended law and necessary for law enforcement.

If the selection of financial institutions takes place in July this year after the enforcement of the amended law, normalization plans must be submitted to the Financial Supervisory Service by October. The Financial Supervisory Service must submit the financial institution’s normalization plan and evaluation report to the Financial Services Commission within three months.

The five major banks and holding companies, including KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup, are expected to be subject to this regulation.

The Financial Services Commission expects that through this legal amendment, financial institutions important to the financial system will maintain vigilance against crises, improve soundness, and strengthen crisis response capabilities.

From the financial market perspective, it is also expected that rapid and systematic responses will minimize confusion in the financial system. Furthermore, early response to insolvency occurrences is anticipated.

The prior notice period will last for 41 days from the 19th to April 1. During this period, if there are any opinions in favor or against the notice, written opinions can be submitted.

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