Financial Services Commission Chairman Ko Seung-beom Holds First Meeting with Investment Industry... Industry Calls for Expansion of Short Selling Resumption

Go Seung-beom "Various Investment Products Must Emerge to Diversify Household Assets Concentrated in Real Estate"

[Asia Economy Reporter Ji Yeon-jin] On the afternoon of the 30th, Go Seung-beom, Chairman of the Financial Services Commission, held the first meeting with the capital market industry and related organizations, including securities firms and asset management companies, in Yeouido, Seoul.

The meeting was attended by Sohn Byung-doo, Chairman of the Korea Exchange; Lee Myung-ho, President of the Korea Securities Depository; Yoon Chang-ho, President of Korea Securities Finance; and Shin Jin-young, President of the Korea Capital Market Institute. Also participating were Na Jae-cheol, Chairman of the Korea Financial Investment Association; Choi Hyun-man, Senior Vice Chairman of Mirae Asset Securities; Hwang Sung-yeop, CEO of Shin Young Securities; Kim Won-kyu, CEO of eBest Securities; Kim Sung-hoon, CEO of Kiwoom Asset Management; and Hwang Sung-hwan, CEO of Timefolio Asset Management.

The Korea Exchange announced plans to enhance the competitiveness of the KOSDAQ and KONEX markets this year to foster growth-oriented companies. In particular, it revealed plans to introduce a "KOSDAQ Global (tentative name) Segment," composed of excellent innovative companies, similar to the U.S. NASDAQ's "Global Select" for top-tier companies.

The Korea Financial Investment Association stated that, in response to recent increased interest in individual public offering subscriptions, which has caused a concentration of subscription deposits (large IPOs amounting to 50-80 trillion won) and increased volatility in household debt, thereby disrupting the capital market, it will seek to reform the deposit system and other related measures.

The financial investment industry proposed expanding the resumption of short selling, considering the increased accessibility of short selling for individual investors and market conditions after the resumption. They also requested the prompt introduction of the Business Development Company (BDC) system to enable individual investors to more easily invest in unlisted innovative companies. Additionally, opinions were raised on the need to quickly introduce default options to enable active management of retirement pensions.

Chairman Go said, "The fundamental role of the capital market is to provide stable and long-term returns that contribute to the formation of national wealth," adding, "It is necessary to induce diversification of household assets, which are concentrated in real estate, and to develop various investment products and services that can absorb shocks caused by socio-economic structural changes such as aging."

He explained, "The capital market structurally cannot generate profits without corporate growth," and "This is why the functions of discovering and supporting promising companies must work well for attractive investment products to emerge." He also mentioned that efforts are underway to introduce Business Development Companies (BDCs) to support promising companies, improve the crowdfunding system, and reform securities public offering regulations.

Furthermore, he emphasized, "Historically, 'concentration phenomena' and 'excessive leverage' have always caused problems for financial stability, acting as factors that disrupt the balance between finance and the real economy and inflate asset markets," adding, "All crises tend to come without warning, but I believe it is our duty to be alert to even small warning signs and respond in advance."

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