Naver Financial and Kakao Pay to Also Pay Financial Supervisory Service Supervision Fees

Revision of Director Contribution Fee Imposition Criteria

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] From 2023, electronic financial operators such as Naver Financial and Kakao Pay, online investment-linked finance (P2P finance), and insurance agency (GA) companies will also have to pay supervisory contribution fees to the Financial Supervisory Service (FSS).

The Financial Services Commission and the Financial Supervisory Service announced on the 19th that they have restructured the criteria for imposing supervisory contribution fees paid by financial companies.

Currently, financial companies pay supervisory contribution fees as institutions subject to FSS inspections under the Act on the Establishment of the Financial Services Commission. The fees are basically based on the proportion of FSS personnel input for supervisory services, but the burden capacity of each financial company (proportion of operating revenue) is also considered for allocation.

The financial authorities decided, in principle, to impose supervisory contribution fees on all sectors except those with virtually no supervisory demand (offshore investment advisory companies and corporate-type funds under the Capital Market Act).

Electronic financial operators, crowdfunding, P2P, and insurance agencies (GA), which were previously exempt from fees, must now pay regular supervisory contribution fees.

For sectors where it is difficult to apply regular fees due to small business scale or minimal supervisory demand (mutual financial cooperatives, overseas remittance, fund evaluation, actuarial services, etc.), case-by-case fees (1 million KRW per inspection case, imposed retrospectively) will be applied.

The financial authorities also decided to increase the weight of personnel input in fee calculation from the current 60% to 80%, and reduce the weight of operating revenue from 40% to 20%.

The allocation criteria for fees within each financial sector have also been revised. The fees allocated by financial sector are distributed proportionally according to each company's total liabilities or operating revenue scale.

Banks and non-bank sectors apply a 100% weight to total liabilities, but for non-financial concurrent sectors (electronic financial operators, VAN, etc.), operating revenue weight is applied instead of total liabilities.

Among financial investment businesses (60% total liabilities weight + 40% operating revenue weight), asset management companies are subject only to '100% operating revenue weight.'

From 2024, life insurance companies and non-life insurance companies will be subject to a '50% total liabilities + 50% insurance premium income' standard. Compared to the previous standard, the total liabilities weight decreased by 20 percentage points, and the insurance premium income weight increased by 20 percentage points.

The criteria for imposing additional supervisory contribution fees will also change. The FSS currently collects additional supervisory contribution fees (30% of the supervisory contribution fee paid for the current year) from financial companies that undergo sector inspections due to deteriorating financial soundness or financial accidents, where the number of inspection personnel input ranks in the top 0.1% within the financial sector.

Going forward, the lower amount between '30% of the supervisory contribution fee paid' and 'the amount calculated considering the scale of inspection personnel input' will be imposed.

An FSS official said, "Previously, if the number of inspection personnel input exceeded the standard, 30% of the supervisory contribution fee for the current year was imposed regardless of the actual personnel input, causing a mismatch between actual inspection input and fee collection. This issue has now been resolved."

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