Financial Companies Exempt from Prior Notification for Overseas Fund Investments Under $20 Million

[Asia Economy Reporter Song Hwajeong] Financial companies will be exempt from the prior reporting obligation when making direct overseas fund investments of less than 20 million dollars. The obligation to report changes in shareholding ratios for overseas fund investments will also be eliminated.

On the 2nd, the Financial Services Commission announced that the revised "Regulations on Overseas Expansion of Financial Institutions" with these contents will take effect from the 3rd.

According to the amendment, prior reporting is exempted for offshore financial company (overseas fund) investments totaling less than 20 million dollars annually. Previously, prior reporting was required regardless of the amount when investing in overseas funds. From now on, if the cumulative annual investment amount is less than 20 million dollars, post-reporting within one month is allowed. A Financial Services Commission official explained, "Currently, for overseas corporate investments, post-reporting is already permitted if the annual cumulative amount is less than 30 million dollars," adding, "The 20 million dollar threshold was set considering the average investment amount and frequency of offshore financial companies, and after one year of operation, the standard amount will be readjusted considering the effects and side effects."

The obligation to report daily changes in shareholding ratios of offshore financial companies without changes in investment amounts will also be exempted. The Financial Services Commission considered the characteristic of offshore financial companies where shareholding ratios of financial companies frequently change due to changes in other investors' investment amounts, even if the financial company's investment amount does not change. Therefore, after the initial report when investing in offshore financial companies, the obligation to report changes is exempted for simple shareholding ratio changes without changes in investment amounts.

Furthermore, business activities of overseas branches are excluded from prior reporting requirements. Until now, prior reporting obligations were imposed on business activities such as real estate and securities transactions and loan transactions exceeding one year by financial companies' overseas branches, but such routine transactions will now be subject to post-reporting within one month after the transaction.

A Financial Services Commission official said, "To promote the overseas expansion of financial companies, we have amended the 'Regulations on Overseas Expansion of Financial Institutions' to reduce the burden of prior reporting when financial companies expand overseas," adding, "This regulatory amendment aims to alleviate the inconveniences experienced by the financial industry during overseas investments and to promote the free overseas expansion of financial companies."

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