Three New On-Loan Businesses Including Lending Machine Registered... Total of 36 Companies Registered

[Asia Economy Reporter Park Sun-mi] The number of companies registered as online investment-linked finance operators (OnTu operators) under the Act on Online Investment-Linked Finance Business and User Protection (OnTu Act) has increased to a total of 36.

On the 14th, the Financial Services Commission and the Financial Supervisory Service announced that three companies?Lending Machine, FreeStock, and FM Funding?have met the registration requirements under the OnTu Act and have been registered as OnTu operators. With this, the total number of P2P (peer-to-peer) finance companies registered as OnTu operators reached 36.

Since the enforcement of the OnTu Act on August 27 last year, which established the legal basis for P2P finance business, companies wishing to operate P2P finance must meet the requirements and register with the financial authorities.

Companies that have not yet registered as OnTu operators must suspend new business operations until registration, maintaining only user protection tasks such as recovering and repaying existing investors' funds. Once the registration requirements are met and the company is registered as an OnTu operator, new business operations can resume. The Financial Services Commission is currently reviewing registration applications from existing companies other than the 36 registered so far, as well as new companies seeking to enter the OnTu business, and will promptly finalize the review results after verifying whether the registration requirements are met.

They are also preparing for the possibility of closure of P2P companies that have not applied for OnTu registration. In case a P2P company closes, prior contracts are made with law firms and debt collection agencies to handle residual tasks and perform debt collection. Additionally, to prevent misuse of user investment and repayment funds by P2P companies, cooperation with fund management companies is secured to monitor computerized management practices. For companies with large loan balances and investor bases, the Financial Supervisory Service dispatches permanent supervisors such as its staff to inspect the status of investment fund refunds.

A financial authority official stated, "Investors should keep in mind that due to the nature of P2P loans, principal is not guaranteed, and recovering investment funds may be difficult," adding, "Also, companies that offer investor loss compensation, excessive rewards, or high returns require caution as they may be involved in incomplete sales or handling of non-performing loans."

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