P2P Finance Screening Delays... 'No.1 Registration' Likely to Be Postponed This Month Too

[Asia Economy Reporter Kwangho Lee] The financial authorities' review process for the official registration of online investment-linked finance (P2P finance) companies is taking longer than expected. This is due to the time required to verify facts and supplement documents, as well as legal issues.

According to the financial authorities on the 22nd, the Financial Supervisory Service (FSS) is currently reviewing registration applications from six P2P finance companies. In addition, preliminary meetings are being held with eight other companies, which plan to submit registration applications after these meetings.

P2P finance companies have so far been in a regulatory blind spot, but under the Online Investment-Linked Finance Act (Ontu Act) enacted last year, they must complete official registration through the financial authorities' review by August 26, when the one-year grace period ends, in order to operate legally.

The FSS, commissioned by the Financial Services Commission, is required to review application documents and major shareholder eligibility and announce registration decisions within two months of receiving applications. Considering that three companies submitted applications last December, results should have been announced last month, but it is expected to be difficult even this month.

A financial authority official explained, "Many applicants did not properly prepare their documents, so we requested supplements, and the fact-checking period with the National Tax Service, Credit Information Agency, and police regarding major shareholders and applicants is taking a long time."

The issue of exceeding the statutory maximum interest rate (24% per annum), which is currently under disciplinary procedures, is also expected to affect the registration review.

Previously, the FSS imposed severe sanctions of 3 to 6 months business suspension on six P2P finance companies for charging borrowers interest and brokerage fees exceeding 24% per annum, and the Financial Services Commission is preparing for a final decision.

Companies that had hoped to be incorporated into the formal financial system and foster a sound industry following the enactment of the Ontu Act now face concerns starting from the official registration process. If a business suspension is confirmed, they cannot register with the Financial Services Commission for three years, and unregistered P2P finance companies will be unable to operate after August 26.

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